All staff sacked as Aussie tech company collapses owing $13m

The marketing and software company collapsed into liquidation last month with debts of at least $13 million.

The collapse of an Australian tech company has just taken another twist after staff received a letter from a government agency.

Marketing and software company E-Mersion Media (Aust) Pty Ltd, headquartered in Melbourne, collapsed into liquidation last month with debts of at least $13 million.

All the company’s staff had been stood down by the time the business went into liquidation, where they were finally terminated.

However, several staff who had quit before E-Mersion Media went under had been trying for nearly a year to get their final wages and entitlements paid.

They had escalated the matter to the Fair Work Ombudsman (FWO), an independent government body specialising in workplace relations.

E-Mersion Media claimed to news.com.au in August last year that they had withheld some staff members’ pay over serious misconduct allegations, including a claim that $15,000 was spent on a company UberEats account.

The business also said police have been involved and that they would soon launch a court case against several former staff members.

But staff said they had been given no information on the alleged misconduct and the company was unable to provide a police reference number to news.com.au at the time. Now it appears it was unable to supply any evidence of this to the FWO either.

E-Mersion Media is in liquidation.

Last week, the FWO concluded its investigation and determined that staff had done nothing wrong.

As a result, the government body said E-Mersion Media owed staff money for their wages and entitlements and that workplace laws had been broken.

Jeremy* was one of the staff at E-Mersion Media who had been levelled with the “baseless accusations”.

“We note the Employer has indicated that court proceedings are being considered but have not provided evidence as such,” the FWO wrote to him in a letter seen by news.com.au.

“In investigating your allegations, we gathered information from a range of sources and found the Employer

contravened workplace laws in relation to your employment,” the letter noted.

Those contraventions included failing to pay a week of wages, personal and carer’s leave, 433 hours of annual leave and failing to pay for work performed during a notice period.

Jeremy claims in total, he is owed $86,000.

As E-Mersion Media is now in liquidation, Jeremy must now pursue a government rescue scheme called the Fair Entitlements Guarantee to receive the money he is owed.

“The Fair Work process took a while, it took way too long,” Jeremy said. “It seems like they (a company) can make any accusation they want and it has to be included (in a FWO investigation).”

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Staff have recently been vindicated in a letter from the Fair Work Ombudsman.

Another E-Mersion Media employee, Tyson, was also vindicated last week in a similar letter from the FWO.

He is owed $103,000.

Tyson believes when he resigned in June last year it was seen as “a Judas disloyalty thing” and added that “I didn’t get a single payment after I resigned”.

Two weeks into his notice period, Tyson alleges that the company accused him of “serious misconduct” and suspended him without pay. He still hasn’t seen a cent since then.

He claims he was not provided with any detail or information relating to any allegation.

“The next week they came back threatening legal action,” he said, and ended up hiring his own solicitor.

“I had 600 hours leave,” he added. “I knew a year out I had that to lean on. I thought I would have a nice little bit of cash out. I was saving the leave for a reason.”

Another employee, Rafael*, also alleged to news.com.au he was also suspended without pay over misconduct allegations, of which he was not given any further details.

“I was a little bit taken aback,” Rafael said. “I was actually quite fearful.”

An internal report news.com.au obtained, prepared independently after the author was given access to E-Mersion Media’s Xero accounting records to prepare for the company’s board, corroborates these claims as well.

The report states that: “For some staff, accusations of misconduct were made during their notice period and salary payments withheld.

“Other staff had salaries withheld during their notice period without explanation.”

Some E-Mersion Media staff previously travelled to Dubai to land deals.

One of the hotel rooms in Dubai.

The State Revenue Office initiated winding up proceedings against E-Mersion Media over unpaid debts, and these three employees also tried to join the case as supporting creditors due to their outstanding entitlements.

Last month, registrar Kim Woronzcak ordered that the business be placed into liquidation in the Victorian Supreme Court.

The Melbourne company was built around the premise of digitising traditional print magazines and had entered into contracts with FIFA and F1. Its parent company had attracted $12 million in investment.

The appointed liquidator of E-Mersion Media, Mathew Gollant of restructuring firm CJG Advisory, sent a report to creditors last week.

He noted that the company was going to be saved through a deed of company arrangement or a DOCA, but once the FWO confirmed that several employees were owed entitlements, the cost of the debt became too great for this financial arrangement to happen.

“The director … (had) the intention to propose a deed of company arrangement (DOCA) to creditors. During the course of the appointment, it became clear to the director that the extent of the outstanding employee entitlements prohibited him from making a DOCA proposal that would result in a return to unsecured creditors,” Mr Gollant’s report stated.

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Originally published as All staff sacked as Aussie tech company collapses owing $13m