Traffic group Evolution transferred more than 1000 employees from failing subsidiary

Traffic control company Evolution Group made a major move involving over 1000 employees just before it was put into administration, it can be revealed.

Evolution is one of the biggest traffic control companies in Australia.

TRAFFIC control company Evolution Group transferred more than a 1000 employees from a failing subsidiary to another firm just before the subsidiary was put into administration.

Brisbane-based Evolution, which is one of the largest traffic control companies in Australia and New Zealand, earlier this month called in administrators to a subsidiary firm called Evolution Traffic Control after it accrued debts to creditors of an estimated $14 million.

Administrators John Park from FTI Consulting in a report to creditors said when Evolution Traffic Control ceased trading on May 5 it had about 1200 employee who transferred along with other assets within the Evolution Group to a new entity. A number of creditor claims also were transferred at the same time.

Mr Park told creditors that employee entitlements including wages and holiday leave were transferred to the new entity leaving a superannuation liability of over $2 million. That liability should be discharged in full with a proposed deed of company arrangement.

Mr Park said the transfer of the employees and assets to the new entity had involved a share sale agreement that would be investigated further as would the alleged payment of unauthorised bonuses and non-payment of tax liabilities that led to the failure of the subsidiary.

Scott Marshall, the former chief executive of Evolution Group, is suing the group after claiming he was unjustly sacked for receiving bonus payments rightly given to him.

Mr Scott, who served as chief executive of Brisbane-based Evolution from February 2018 until June last year, has lodged an unfair dismissal claim in the Federal Circuit Court seeking compensation and reinstatement. Evolution Group said Mr Marshall’s claim is without foundation and will be vigorously defended.

Evolution Group has accrued losses of more than $11 million in the past two years with its auditors earlier warning the group’s large debt level could threaten its future as a going concern.

Evolution Group chief operating office John Macnamara said the group was not under threat of collapse and continued to operate.