Vac Group under administration, staff out of jobs weeks before Christmas

Staff from a civil works company based in Yatala and with sites in Rockhampton, Gladstone, Sydney, Melbourne and Adelaide, were called into a meeting and given redundancy notices. It is unclear if they will receive payouts.

The gates were closed on Tuesday morning (Dec 6) at Vac Group's Gracemere site.

An Australian civil works company has gone into voluntary administration just weeks before Christmas and it is unclear if employees will receive redundancy payouts.

Vac Group Holdings went into external administration on December 4.

The business was established in 2000 and has a head office in Yatala, Brisbane with other sites in Rockhampton (Gracemere), Gladstone, Sydney, Melbourne and Adelaide and employs 155 staff across multiple companies.

According to its website, the VAC Group operates the largest fleet of vacuum excavation suckers trucks in Australia and other underground asset location and mapping services for small business projects, civil and building works for government and major infrastructure projects.

Stephen Earel, Neil Cussen and Michael Hird of national business advisory firm Cor Cordis were appointed voluntary administrators of Vac Group Holdings, Vac Group Operations and Beacos Pty Ltd, together Vac Group.

Staff at Vac Group Gracemere were given redundancy notices on December 5 as the company has entered voluntary administration.

The team of about 15 staff at the Gracemere site began work as normal at 7am on Monday (December 5) and were called into a meeting after lunch and given the news.

The Gracemere site was quiet on Tuesday morning with all of the gates locked and no vehicles visible.

A letter was given to the employees, effective immediately, advising them their “employment with Vac Group will come to an end on the grounds of redundancy”.

It is understood staff at other sites also had a similar meeting.

All staff were ordered to return any company property including laptops, phones, company credit cards, vehicles and keys.

It is not known when the employees will receive their redundancy payouts and monies owed, if before Christmas.

“A redundancy letter confirming your employment entitlements as at the date of the receivers and managers appointment will be provided to you separately,” the employee letter read.

The letter further states “claims against Vac Group for certain categories of employee entitlements, for the period prior to our appointment, may receive priority payment”.

“There must also be sufficient recovery of monies from a specific class of secured assets of Vac Group, to fund payment of the priority claims”, the letter states.

Administrators are unable to confirm at this stage if there will be sufficient assets to meet employees wages and entitlements, the letter states.

If the company enters liquidation, employees may be able to claim some of their employee entitlements from Australian Government FEG Scheme.

It’s not the first time this company has gone into administration.

Administrators from McGrathNicol were appointed in November 2019 and continued to trade the business while they looked at refinancing and recapitalisation.

A notice to cease this external administration was filed on May 12, 2020.

Administration looks to rescue a company by restructuring or other ways to return it to profitability while liquidation is the wind up of the company and selling of assets to pay creditors and shareholders.

Cor Cordis has been contacted for comment.