‘Crumbling’ childcare chain leaves parents in the lurch, staff unpaid

The operator of a national childcare chain is being investigated for trading while insolvent and is under pressure from creditors as some of its centres permanently close and staff go unpaid.

One Melbourne branch of Genius Childcare recently shut its doors permanently, while another has been closed for a week after staff there refused to turn up for work amid claims they had not been paid.

Samantha said she had pulled her children out of Genius childcare after repeated closures.Credit: Jason South.

The Age spoke to three insiders familiar with the situation at Genius, which had operated seven centres in Melbourne and spruiked another nine it planned to open. They agreed to speak anonymously for fear of jeopardising their employment or concerns over future payouts.

One said the chain was now “crumbling” under pressure from angry parents, employees and creditors.

Parents using the Genius Childcare centre at Taylors Lakes in Melbourne’s north-west said they were unable to go to work after it abruptly closed on Thursday – leaving them with no one to look after their children – when staff refused to work.

Another Genius centre, at Ashwood in the city’s south-east, abruptly closed its doors recently, and staff there transferred to the nearby Mont Albert facility.

The unattended front desk of the Genius childcare centre in Taylors Lakes.Credit: Paul Rovere

Some Genius employees say they have been forced to turn to food banks for meals after months of irregular or late payment of their wages.

Meanwhile, Genius centres in South Australia, Queensland and the ACT have shut their doors recently, subject to allegations of regulation breaches due to cleanliness, smell, issues with fencing or disputes with landlords claiming rent had not been paid.

The shutdowns come as companies controlled by Genius owner Darren Michael Misquitta are pursued through the courts or the corporate insolvency process by creditors – including the Tax Office and Victoria’s State Revenue Office – with claims worth at least $12.8 million.

In a separate matter, the United Workers Union representing childcare workers at the chain is suing Misquitta and three of his companies in the Federal Circuit Court, alleging employees are owed more than $7 million in unpaid superannuation.

Genius Childcare director Darren Misquitt.

Another Misquitta-controlled company, Genius (Collins), was wound up in a court-ordered liquidation in 2023 after it failed to pay nearly $5 million in rent and other charges for an upmarket daycare centre it operated on Collins Street in the city.

Last month, liquidator Paul Vartelas advised creditors of a company called Horizontal 1 that he believed Misquitta, as company director, had breached his statutory obligations by allowing it to accrue debts while already insolvent.

“It is my view that the director breached his obligations … by allowing the company to trade while insolvent,” Vartelas wrote in a report to creditors that has also been lodged with corporate regulator the Australian Securities and Investments Commission (ASIC).

“My investigations … are currently ongoing.”

Another liquidator, Altan Djenab, who acted in the Collins Street liquidation, notified ASIC in late 2023 that Misquitta had allegedly breached the Corporations Act by failing to hand over company books and records.

The regulator was contacted for comment but did not respond before deadline on Tuesday.

The Genius head office has not responded to detailed questions from The Age, nor has Misquitta – who is believed to be overseas – responded to attempts to seek comment.

One Genius employee said years of hard work by staff were “just crumbling in front of our eyes”.

Genius childcare.Credit: Joe Armao

“We’re trying to support the centres in every area that we can, but we’re just not given the tools to succeed,” they said.

“We’re getting abused by families, educators, unpaid invoices, like it’s our fault.”

On Wednesday afternoon last week, about 34 families with children enrolled at the Taylors Lakes centre were told via an email – seen by The Age – that they did not have childcare the next day due to “unexpected staffing challenges”.

“Please know that this decision was not made lightly, as we prioritise the safety and wellbeing of all children and staff,” it read.

Genius did not charge families for Thursday. Another email sent to parents on Thursday, also seen by The Age, said “staffing challenges have not yet been resolved”.

The Age has been told the centre will remain closed on March 5.

Another Genius worker said through tears that the centre, which was running at 40 per cent occupancy, was temporarily closing because staff were about 11 days past their scheduled pay date.

Taylors Lakes parent Samantha – who declined to give her last name for privacy reasons – said she had removed two children, aged three and 15 months, from the service after repeated closures.

“Genius still owes me funds,” she said.

Samantha said she believed the operators had no respect for parents or staff.

“It’s down to those staff members that were still coming into work and not getting paid,” she said. “It’s disgusting that the company is allowed to get away with it.

“This is an emergency. People aren’t getting paid. They are not paying rent or being able to put food on their table or get fuel. The government definitely needs to step in and show us that they are invested, like they say they are, in childcare.”

Genius Childcare.Credit: Joe Armao

Jessica, another parent with a child at the centre, said she did not know day to day whether she would be able to go to work without childcare.

The union’s national president, Jo Schofield, accused Genius of flagrantly breaching its duties as an employer, with late pay, unpaid super and chaos affecting centres.

“The latest example of educator walk-outs at Taylors Lakes in Victoria follows earlier examples at Dural in NSW and also in the ACT, where educators have refused to put up with Genius’ nonsense,” she said.

Victorian Minister for Children Lizzie Blandthorn said long daycare was a matter for the federal government and the independent regulator.

Federal Minister for Early Childhood Education Anne Aly said state and territory regulators were responsible for investigating serious incidents and took immediate action if they had any concerns about child safety.

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