Shocking detail in the collapse of George Calombaris’ restaurant empire

George Calombaris broke the news of the collapse of his restaurant empire in a heartbroken social media post – and there’s a big problem with it.

When speculation erupted on Sunday that a dozen restaurants owned by George Calombaris were in hot water, hundreds of staff heard radio silence from their boss.

On Monday afternoon, it was confirmed that the celebrity chef’s restaurant empire Made Establishment had entered voluntary administration.

Twelve venues across Melbourne were immediately shuttered, ending a messy period of damning headlines and a customer exodus after the $7.8 million wage underpayment saga.

More than 400 staff were effectively out of work immediately, with Calombaris describing his devastation and regret in a message on his Instagram account.

“To all my team, I truly regret it has come to this,” he wrote. “I thank you from the bottom of my heart for your loyalty and friendship.”

And that’s how the workforce, who have remained loyal to Made Establishment over several uncertain months, were told they’d lost their jobs, it has emerged.

“We had to learn that the company was going into administration via George’s post on Instagram,” an anonymous staff member said in a statement via United Workers Union.

“I feel very angry about what’s happened. We haven’t been told anything.”

George Calombaris has lost his restaurant empire on the back of the damaging $7.8 million wage underpayment saga.

It’s understood that Made Establishment has paid outstanding wages and superannuation entitlements up to Sunday.

But the worker said annual leave is yet to be paid.

The worker described the situation as “really scary”, made worse by the fact that they’re working in Australia on a temporary visa.

“I may have to go home if I can’t keep this job,” they said.

RELATED: Inside the shocking downfall of George Calombaris

This post on Instagram was how Made Establishment workers were informed of the company's collapse.

Victorian Trades Hall Council legal centre boss Oanh Tran said she’s worried for Made Establishment staff on temporary visas.

“Now, not only have they lost their jobs, they have potentially lost the ability to remain in Australia,” Ms Tran told AAP.

“There are going to be at least some – and probably many – who are in that really vulnerable position.”

The first meeting of creditors will be held tomorrow and one of the administrators overseeing the process, Craig Shepard, told reporters that it’s hoped new owners can be quickly found for some of the restaurants.

“We could have them ready to go by Monday,” Mr Shepard said.

For several months, Made Establishment management orchestrated an exhaustive effort to turn things around.

“A major rebranding of a number of high-profile venues including Hellenic Hotel Williamstown (relaunched as Hotel Argentina), Hellenic Republic Brunswick (recently reopened as Crofter Dining Room) and The Press Club (relaunched as Elektra) was unable to turn the business around, despite strong reviews,” Mr Shepard said.

“Other factors were generally difficult trading conditions in the hospitality industry in recent years due to the expansion of the on-demand economy via services such as UberEats and Deliveroo, increasing costs, fierce industry competition and changes in consumer tastes to favour cheaper mid-tier dining options.”

George Calombaris's restaurant empire is in voluntary administration. Picture: AAP

In 2017, rich-lister and entrepreneur Radek Sali bought into the Calombaris empire and brought with him a wealth of experience in business.

A routine audit and the implementation of more sophisticated accounting processes were what first uncovered something was very wrong with the payroll system.

In April of that year, Made Establishment calculated that its current workforce had been underpaid $2.6 million and publicly disclosed the issue. It immediately repaid 162 people and committed to working with Fair Work Australia to ensure the matter was properly finalised.

An audit by KPMG revealed that the full extent of underpayments was a staggering $7.8 million, affecting 515 employees over a six-year period.

In July last year, Fair Work Australia issued an enforceable undertaking that required the repayment of that amount – the company already had in the months prior – and a contrition penalty of $200,000 for Calombaris.