COVID-19: Gold Coast dental roll-up says it cannot pay staff for work last month

Staff at Gold Coast dental roll-up Smiles Inclusive have been left fuming after the company said it would not be paying wages for the past month.

STAFF at Gold Coast dental roll-up Smiles Inclusive have been left reeling after the company said it would not be paying wages for the past fortnight.

This week the embattled company, which runs practices under the Totally Smiles brand, in a letter to all staff said it could not pay dentists their commission for March nor staff wages due on April 8 for the previous two weeks.

“It is with regret that we advise at this point in time due to the COVID-19 situation and subsequent closure of practices Totally Smiles is not expected to be in a position to pay March Dentist Commission as well as the 8 April payroll on time,” the letter reads.

“We are currently in discussion with several parties with the objective of securing further funding and assuming the success of these discussions you will be paid as soon as possible.”

Smiles staff have been told they will not receive wages for the past two weeks. Photo: iStock

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Smiles said it expects “eligible employees” to receive the Federal Government’s JobKeeper subsidy of $1500 per fortnight from early May.

The letter is signed by CEO Tony McCormack and chairman David Usasz.

In a separate announcement to the market this week that all employees have been “temporarily” stood down except for skeleton staff running operations and others needed for emergency dental work. The stand down includes the board and senior management.

All of the company’s practices are currently closed except for some operating “on call” for emergency services, which is impacting cashflow at the company.

Smiles Inclusive Chair David Asasz (AAP Image/Richard Waugh)

The company said it is “urgently” seeking financial support so it can meet its payroll and other obligations.

Smiles had severe cashflow issues even prior to the COVID-19 pandemic and faced repeated questioning from the sharemarket operator.

Its last cashflow report, prior to its shares being suspended from trading for failing to file its half-year results, had a negative balance of $3.2 million.

Mr Usasz told the ASX at the time there was a high likelihood it would continue to bleed cash “for the time being”.

Dr John Camacho, a paediatric dentist from WA, questioned whether the company can afford to keep operating even on a limited basis.

“Smiles is insolvent,” Dr Camacho said.

“It cannot pay for work done by dentists since 1st March. This has nothing to do with coronavirus.”

Another dentist said staff have effective been told they need to work for free.

“How can they still say they are solvent?” she said.

“No money to pay rent or wages.”

Smiles said in its staff letter this week that it was taking a number of measures to cut costs, which included negotiating deferral of creditor payments as well as rental payments, removing business expenses and applying for government subsidies.

Last month the Burleigh-based company was forced into an embarrassing backflip after telling staff they had been stood down in a late night email.

Mr McCormack was forced to retract the email the following day saying it was a “misunderstanding” and the company was planning for a transition to a shutdown due to reduced bookings.