Encompass Community Services stops back paying thousands to employees, enters administration
As Encompass Community Services is gripped by unmanageable debt, another major provider says it is willing to keep it running.
Geelong
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Encompass Community Services is due to enter voluntary administration on Thursday as fears grow the organisation may be unable to repay all of its debt, which likely includes thousands of dollars owed to current employees.
The move has prompted major Geelong disability service provider, genU, to attempt to keep some of Encompass’ services afloat.
Staff from Encompass and genU were due to hold an emergency meeting on Wednesday to work out how some Encompass services could be salvaged.
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It is understood genU will assist Encompass to prop up some of its operations, which assist jobseekers, students, employers and people with disabilities.
A genU spokeswoman said the organisation would support Encompass.
“genU is providing advice and corporate support to help maintain programs and services at Encompass until further guidance can be provided from their administrators,” the spokeswoman said.
Encompass has about 260 permanent and casual staff working across more than 10 sites.
The organisation operates homes for people with disabilities at Charlemont, Torquay and Grovedale.
The decision by Encompass management to put the organisation into voluntary administration follows staff being underpaid thousands of dollars between 2015 and 2021, and an investigation of the organisation’s pay practices by the Fair Work Ombudsman.
Multiple staff wrote to Encompass management last week, raising concerns about corporate waste, and a lack of leadership, direction and transparency about a wage audit.
The staff are yet to receive a response to the letter.
In a email to staff late Tuesday evening, chair of the Encompass board, Alyson Miller, wrote management had decided to put the organisation into voluntary administration.
“Worrells have been appointed as administrators, commencing by close of business Friday, January 13, 2023,” Dr Miller wrote.
“To ensure a continuity of support to participants at Encompass, and to maintain staff employment, we are working with the support of genU at this time.
“We have met with genU who are providing advice and corporate support to help us maintain all programs and services at Encompass until further guidance can be provided from administrators.”
The Geelong Advertiser has spoken to three Encompass staff who are owed $14,000, $20,000 and more than $30,000, respectively, in backpay. Another staffer is reportedly owed $78,000.
The Addy understands an audit of payments to former Encompass employees between 2015 and 2021 was halted last month.
Across the 2020 and 2021 financial years, Encompass was propped up by more than $2.39m in Jobkeeper funding from the federal government.
Without Jobkeeper funding, Encompass recorded a $720,018 deficit in the year to June 2021, according to its financial performance statement.
For that year Encompass’ revenue was $11.35m, including $9.2m from the National Disability Insurance Agency.
Expenses for that year included $1.13m for accommodation it provided, $400,000 for administration and $200,000 in program costs.
On Wednesday, genU announced it was working with Anglicare Tasmania to take on some of Encompass’ 420 NDIS-funded disability service clients.
GenU chief executive, Clare Amies, said: “Last financial year alone we provided 1.2 million hours of disability service and we’re pleased to be able to extend our services to support more people.”
Multiple sources have told the Geelong Advertiser Encompass chief executive, Elaine Robb, has been off work since late December.
Dr Miller was contacted for comment but did not respond before deadline.
EARLIER
The payment of thousands of dollars of back-pay owed to Encompass Community Services staff in Geelong has stopped as the organisation faces “significant” financial woes.
The halt to payments came as one long-time staff member said she had serious concerns about the viability of the disability services provider.
After a six-year pay bungle, Encompass had started to pay back thousands to some of more than 260 current workers employed between October 2015 and October 2021.
An audit of pay to ex-employees is also under way.
Encompass stopped back-pay last week and told one employee it would resume next month.
In an email to staff on Tuesday, chair of the Encompass board, Alyson Miller, said the organisation was “undergoing significant financial difficulties”.
“The finance director (Mandy Wilkens) and myself have been working towards the best solutions possible moving forwards,” Dr Miller wrote.
“The process is a complex one, and because we are waiting on external sources for assistance, there have been some unavoidable delays.
“We are very mindful of the challenges this poses, and deeply appreciative of all that you have been doing to keep things running during this enormously demanding time.
“We understand that this is frustrating and unsettling; please know we are working as quickly as possible to implement a solution.”
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Financial issues at the organisation are being compounded by the resignation of senior staff, including a general manager in the past week.
Another Encompass manager has advertised they are seeking external work opportunities.
The Fair Work Ombudsman is also probing pay issues at Encompass and would not elaborate on its investigation.
Lisa Holdsworth, who has worked at Encompass for 13 years, was told by management she was owed about $19,000 in back-pay but she said the total was closer to $30,000.
Since August she has received more than $10,000 from Encompass. She is owed about $7000.
Staff like Ms Holdsworth are owed money because they were classified incorrectly by Encompass, which did not take relevant qualifications into account when determining pay rates.
Ms Holdsworth said the bay-pack halt had placed her under significant financial strain.
Commenting on the resignation of senior staff, Ms Holdsworth said: “The resignations are coming in waves, the ship is sinking. What has been sown is now being reaped.”
Ms Holdsworth said she was concerned about the future financial viability of Encompass which run services at East Geelong and Whittington and has a CBD office.
Fed up with what she said was poor management, Ms Holdsworth confronted senior staff at the organisation’s Gheringhap St headquarters on Friday. The Geelong Advertiser understands she was escorted off the site by police.
Encompass chief executive Elaine Robb and Dr Miller were contacted but did not respond before deadline.
Originally published as Encompass Community Services stops back paying thousands to employees, enters administration
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