‘Disgusting’: Chain collapses as staff walk out
An industry is in crisis and Australians don’t know where to turn with the situation described as a “mess” and people left “distressed”.
Australia’s childcare industry is facing a massive crisis as major players collapse, impacting hundreds of workers and parents, with the situation described as a “mess” and “disgusting”.
Genius Childcare’s troubles became increasingly public with mass staff walkouts and centres abruptly closing and then a number of them collapsed on Monday.
It follows in the wake of another childcare provider, that employed 320 staff members, which was placed into administration in February.
Yet, some of Genius’ childcare centres that operate under a different company have not been put into administration, with staff left in limbo with nowhere to turn for help. Parents describe a similar situation too.
Maisie* is one of the almost 20 educators who refused to show up to work at the provider’s Taylors Lake centre in Melbourne, which is not in administration, as staff were owed four weeks’ wages. It’s been closed since 27 February.
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She’s owed more than $6000 in unpaid wages and some superannuation.
Maisie describes the experience as “one of the most distressing things” that has happened to her but said she doesn’t know where to go to for help anymore.
“We have gone to Fair Work, we have tried to go to the education minister for Victoria and the federal education minister. We have spoken to the Department of Education, and we value them and think they are amazing, but there is no one we can go through to help. We are finding it hard to find anyone to keep (the company) accountable,” she said.
“I believe there needs to be some accountability and regulation that needs to be looked into before you can purchase a thing like a childcare centre and transfer ownership. It’s not like if Coles shut downs, it doesn’t just affect the team’s livelihoods. It’s families that have to find care and children who are settled and happy.
“Early childhood should not be taken so lightly – at the end of the day it’s strangers taking care of children.”
Genius had acquired 31 underperforming centres from a childcare provider giant G8. In an unusual deal, G8 paid Genius over $25 million last year for the acquisition.
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Maisie said it was “so wrong” that educators had not been paid and couldn’t get any answers — claiming 20 messages she had sent chasing her pay went unanswered.
“It got to the point where I had to go to TikTok influencers and one of them set up a GoFundMe page for Genius educators so they can get something,” she noted. “Half the girls can’t even afford petrol or food. We can’t even go to Centrelink as we are technically still employed.
“I have literally been absolutely a mess for the last three weeks. I even had one of the team I work with say they feel like I’m back in a third world country. I don’t expect this in Australia.”
Meanwhile, Genius’ Castle Hill centre located in Sydney’s north west has been caught up in the administration. It was slated to close on March 12 but was shuttered nine days earlier, parents told news.com.au.
Simon* was one parent who had been sending his two children to the Castle Hill centre and said a number of issues had arisen.
There was a high staff turnover, and he also found out the dishwasher had been broken for a month and the chef was forced to wash everything by hand.
The dad-of-two was devastated to learn educators weren’t being paid their wages.
“One educator didn’t have enough money to buy enough nappies for their own children, so I had my wife reach out to see if they wanted us to buy some supplies for her – that’s how dire it was, and disgusting,” he said.
He claims he also had to “harass” the company for a refund as he had overpaid them, but had to resort to extreme measures in the end.
“I contacted them 50 times in a row and filled up their voicemail and after an hour got a payment in our account,” he said.
Simon said he went far and wide to seek out help.
“I tried to talk to the Department of Education and they said they had a tip off line originally and it had been discontinued. I was transferred to Services Australia and was put on hold and it said I can speak to someone in one hour and 40 minutes. I don’t have time to hold on the phone for that long, I’m just trying to do the right thing,” he said.
“The Department of Education of NSW said it’s not a state issue. I asked the state member to contact their federal counterpart.
“Nobody seems to want to be proactive in sorting this out and what’s most important to me is these staff, who work incredibly hard have been treated like rubbish, and some have been owed super for a long time.
“They need to get paid and you would think in election year, the relevant people want to make an effort. It’s really horrible.”
Victorian University’s associate professor Peter Hurley said the dominance of private providers in the childcare sector was concerning.
“It becomes about profit and it gets treated like any other asset, which I think people can find surprising as it’s about children,” he noted.
But he likens the majority of the childcare sector to becoming just like the aviation or retail sector where it's a pursuit of money.
“Somewhere like aviation is prone to busts and that’s seen as a natural part of the system – things falling over as it’s no longer viable,” he said.
“But it’s a bit shocking that’s how this can operate as I think childcare is very different from an airline seat or retail shop.
“I think part of the big problem is people that can operate and respond to changes in demand are these private for profit providers as they have access to equity and capital to open these things. If you are thinking about a not for profit or community provider, its hard for them to get together to build investments to open. So we are kind of at the mercy of these groups in many instances.”
Administrators have been appointed to Genius childcare centres, trading under the name Vertical 4 Pty Ltd, in Victoria, New South Wales, Queensland and Western Australia.
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 had been abruptly shut down on March 9.
The United Workers Union is suing Genius over an alleged unpaid superannuation bill which adds up to $7 million, launching action in court in December.
Queensland University of Technology employment expert and professor Andrew Stewart said being able to pursue unpaid wages and super was a huge issue in Australia.
“There has also been any number of reports that have pointed out the shortcomings of leaving it to the ATO to deal with this matter, because although they do have the necessary powers they just don’t have the resources to go after it, as that it is literally thousands of different employers,” he said.
Changes coming into effect in July 2026 where employers must pay super every payday, rather than quarterly, will help address the issue but he said there is “still a lot more that can be done”.
Genius childcare’s two unopened centres in Eumemmerring and Cranbourne West in Victoria are also under administration.
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.
Nicholas Charlwood, Glenn Livingstone, and Alan Walker of WLP Restructuring were appointed as voluntary administrators.
Mr Charlwood said that the administrators have immediately moved to extend the company’s debt facility.
This is intended to allow the centres to resume trading, reinstate staff and pay outstanding wages while the administrators urgently seek either a purchaser for the centres or a party to recapitalise the company, he noted.
“As we advance these negotiations and evaluate the company’s affairs, there will be no change to the operations of individual centres unaffected by recent closures,” he said. “We are committed to exploring all avenues to facilitate continuity of care for families, preserve employment opportunities and ensure the company’s ongoing viability.”
A Fair Work Ombudsman spokeperson 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.”
A spokesperson for the Department of Education said it continues to receive and act on tip-offs and complaints from parents, guardians, providers and members of the community.
They added they have recently improved the process for reporting suspected CCS fraud to the department through the introduction of an online contact form, replacing the previous email address.
“The allegations made regarding Genius childcare employees not receiving their entitlements are concerning, particularly noting Australian employers’ obligations to employees for wages, tax, superannuation, and workplace health and safety,” they added.
*Names have been changed
sarah.sharples@news.com.au
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