‘Terrible’: More sites go bust for embattled Aussie chain

The crisis engulfing an Australian chain is continuing with the debt bill now potentially climbing into the multi-millions.

An embattled childcare chain has had another 12 centres placed into administration, with the provider’s debt bill now expected to stretch into the millions, as the company has been accused of “chaos and calamity” that has caused “incredible distress”.

Genius Childcare’s troubles have recently been playing out publicly with mass staff walkouts and centres abruptly closing.

One of the provider’s companies, Vertical 4 Pty Ltd, was forced into administration on Monday, impacting 13 centres.

The latest company to fall over, Abacus 49 Pty Ltd, takes the number of childcare centres under administration to 25.

Administrators would not reveal the total outstanding debt that is plaguing Genius Childcare.

However, the Australian Taxation Office is owed $10.34 million by Vertical 4 Pty Ltd.

Then there’s the United Workers Union which is suing Genius over an alleged unpaid superannuation bill which adds up to $7 million, launching action in court in December.

News.com.au is aware of a recruitment company that provided casual workers to Genius’ centres in Canberra which is owed $42,000, while multiple staff members have revealed between two and four weeks worth of wages are outstanding.

One landlord also told news.com.au that it had $800,000 worth of rent that was owed for a centre that has now been closed.

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Text messages from staff pleading for help. Picture: Supplied

Messages parents got about centres being unable to open. Picture: Supplied

Nicholas Charlwood, Alan Walker, and Glenn Livingstone from WLP Restructuring were appointed on Wednesday as administrators of Abacus 49 Pty Ltd, the owner and operator of 12 Genius Childcare early learning centres.

Its centres are located across Queensland, New South Wales, ACT, Victoria, and Western Australia.

“The administrators will continue to trade the centres on a business-as-usual basis while urgently assessing the financial affairs of Abacus 49,” they said.
“The administrators’ intention is to commence the process to sell or recapitalise the entity.

“All 12 centres will remain open, with the administrators taking over the centre operations.”

But one of these sites, the Taylors Lake centre in Melbourne, has been closed since 27 February after educators walked out over unpaid wages.

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Pyrmont workers were asked to reply within 30 minutes to Genius if they were willing to work. Picture: Supplied

The Castle Hill centre closure announcement. Picture: Supplied

Almost 20 educators have not been paid since early February and many are struggling to afford to cover their rent and bills.

Jessica* is a 10-year veteran of the childcare industry who worked at Genius’ Melbourne centre in Taylor Lake and is owed weeks of wages worth $4000.

She said she had “no idea” what was happening with the centre and had only received updates on the company’s situation via the media.

“Hopefully educators get paid if they want the centre to open,” she told news.com.au

But she is furious about what’s happened and wants to see some accountability for what’s been “done to hard working, wonderful educators”.

“I’m really struggling, I’ve just been pretty much paying rent and food and having to sell things to come up with the rent money,” she said.

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Educators have been forced to walk off the job over unpaid wages. Picture: iStock

Maisie* is another worker from Taylors Lake who’s owed more than $6000 in unpaid wages and some superannuation. She also said she had no idea what was happening now the centre was under administration.

The Melbourne woman described the experience as “one of the most distressing things” that has happened to her.

“We are owed over four weeks worth of wages and it’s just not financially stable,” she told news.com.au.

“Half the girls can’t even afford petrol or food … I’ve had to borrow money off my parents to pay my mortgage.

“I have literally been an absolutely a mess for the last three weeks.”

Genius Childcare now has 25 centres under administration and a debt bill that could stretch into the millions. Picture: Supplied

On Friday educators in Melbourne Genius centre Taylors Lakes will not have been paid for six weeks, said United Workers Union national president Jo Schofield, which was “an outrageous burden to place on low-paid educators”.

“Fast-and-loose corporate cowboy tactics in early education should not be tolerated because of the safety risks it poses to families, children and educators,” she added.

Administrators were also appointed to a related entity, Vertical 4 Pty Ltd on Monday, that held 13 Genius Childcare centres.

Impacted sites include Hamilton Hill, Lakelands and Mandurah in Western Australia, Newcomb in Victoria and Castle Hill and Pyrmont in NSW.

News.com.au broke the news that the Genius Early Learning Childcare’s centre based in Pyrmont in inner Sydney was hit with mass resignations and a staff walkout forcing the closure of the centre in March.

It also revealed that the Hamilton Hill centre had been abruptly shut down on March 9.

Childcare workers have been left unable to pay for rent, petrol and food. Picture: iStock

Ms Schofield said the union’s hope is Genius centres now under administration can continue operating, so they can return to the safe, stable education and care environments that families, children and parents deserve.

“Despite Genius’s corporate misbehaviour causing educators incredible distress, our educators say they have loved working with families and children in their centres,” she told news.com.au.

“They hope to continue that good work without the chaos and calamity caused by Genius’s slow-motion collapse.”

United Nations Workers national president Jo Schofield. Picture: Supplied

Genius childcare’s two unopened centres in Eumemmerring and Cranbourne West in Victoria are also under administration via Vertical 4.

The administrators, who were appointed by the company’s secured creditor, are also operating an additional five centres with sales agreements already executed with a third party, and completion pending, they said.

They are located in Mount Albert, Beaumaris and Reservoir in Victoria, Kenmore in Queensland and Gowrie in the ACT.

An email from the recruitment company. Picture: Supplied

A Fair Work Ombudsman spokesperson said its investigation into Genius Childcare group, including into its subsidiary Abacus 49 Pty Ltd, is ongoing and it was not appropriate give any further comment.

A spokesperson for Education Minister Jason Clare said employers should pay their staff – full stop.

“The Fair Work Ombudsman is currently investigating the claims against Genius Childcare following a referral by the government in December last year,” they said.

“Staff should contact the Fair Work Ombudsman about wages or the Australian Tax Office about superannuation.

“The Department of Education is closely monitoring these issues and will work with state and territory authorities who have responsibility for regulating quality and safety, to make sure any appropriate action is taken.”

*Names have been changed

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Originally published as ‘Terrible’: More sites go bust for embattled Aussie chain