Shock waves are still reverberating in the Byron Bay Cookie Company after eight Byron Bay and four Sydney staff lost their jobs last Thursday.
Administrators moved in last week on the company, owned by Gordon Slater’s Slater International, following an investigation by the Australian Tax Office (ATO). According to court documents, the company owes around $1.2 million in unpaid Business Activity Statement, Pay As You Go taxes (PAYG), GST and fringe benefits tax.
More astonishingly, it’s emerged from the ATO’s investigation that the company has failed to pay its workers’ superannuation for many years. That is just one of a long list of allegations of mismanagement, including that the company failed to pay suppliers on time, or in some cases failed to pay them at all.
The Echo understands that no other company owned by Slater International is being investigated by the ATO. That includes the retail division of Byron Bay Cookie Company and Byron Bay Gourmet Foods.
Former employees from the company, who wished to remain anonymous, confirmed with The Echo that their superannuation was not paid for at least two years. ‘Despite our payslips indicating that we were being paid super,’ said one, ‘the administrators on Thursday said we were unlikely to receive anything.’
They also said that they were keen to regain employment at the company and want to go back to work. ‘I loved my job and the people I worked with,’ one said. ‘It was a good team, brand and product. If asked to come back I would. We all desperately want the company saved.’
Another said, ‘We want Byron Bay Cookies to continue as it’s a great company. We all love working there and consider ourselves a family. We really need the support of our community to bring us through.’
But as for management, all were critical. Another ex-employee said, ‘[CEO] Gordon Slater had a chance to save the company but he didn’t. The last time he was here was six months ago and he didn’t meet with any factory staff.’ They also said that both Mr Slater and company director Jacqueline Schurig offered no apologies for the company’s collapse, nor any thanks for their work.
As for the way in which the dismissals were handled by administrators, an ex-employee said that, ‘All staff were assembled in the office where we were told what was going on and in the end, eight names were called out. We were then brought into the boardroom where we were told we were officially retrenched while being told that, “It isn’t personal.” “This is personal to us”, one said.’
‘This has not only affected us but our families. Some of us have mortgages – one woman had worked there for 15 years.’ All shared concerns for the wellbeing and future work prospects of the remaining employees.
‘There is a complete sense of shock and everyone is worried.’
Former employee speaks
Another ex-employee, Jackie Castellano, also told The Echo she is owed superannuation for her time at the company.
Ms Castellano says she was originally employed to ‘clean up’ the accounts and the ‘franchise bookwork for the David Jones stores.’ Instead, she claims she was misdirected ‘into a customer services role’, and worked between November 2011 and February 2012.
She told The Echo, ‘I need to highlight foremost that the staff members are wonderful people – they are passionate about the product and love their jobs. I love and respect them all.’ She says that while the workers are ‘loyal to the bone and hardworking honest local people,’ the company lacked adequate management.
‘At times the courier companies would not arrive due to non payment. So even if the goods were baked and boxed they could not be shipped until the money was received. The local telephone repair man would come to fix the phone system begrudgingly and grumble that he shouldn’t even answer our calls due to non payment. The lady suppyling the sanitary bins in the ladies’ toilet did not get paid on time.
‘It got to the point where I was checking my bank account each Thursday morning to see if my pay had been deposited. It was always down to the wire – a Qantas order would need to be baked, boxed and shipped “like now” and there would be no funds, no ingredients... then “wham”, all of a sudden money would arrive into the bank and it would be all systems go to fill the order.’
Ms Castellano says she compiled the November and December 2011 monthly commercial reports, ‘highlighting that the company was not paying its debts as they fell due; that the superannuation liability was continuing to increase and that no payments had yet been made. This report was forwarded to management, who quickly told me not to mention these issues. But I was not prepared to remove them as it was prudent that the directors were advised.’
She believes that her comments were deleted by management before the final draft was issued. She added, ‘I truly hope and pray that this beloved company can be saved and the workers can remain employed.’ Comments were sought from CEO Gordon Slater and director Jacqueline Schurig regarding Ms Castellano’s claims, however they instead responded with a general statement about the voluntary administation.
Talks of expansion
Despite the court action, Mr Slater and director, Jacqueline Schurig are still attempting to talk up overseas expansion plans. Ms Schurig distanced the expansion plans from the court action, telling media last week, ‘The court notice has been issued to only the manufacturing arm of the company, so it has nothing to do with the franchising aspect.’ She also claimed that the appointment of administrators was, ‘an opportunity to restructure the manufacturing division.’
But Australian Packaging managing director Ray Cranfield isn’t so happy. He is quoted on www.foodmag.com.au as saying his company, ‘always had trouble with payments,’ and that the company ‘owes Australian Packaging $33,000 alone.’
‘If a liquidator had been appointed there may be an opportunity for us to recover some trade... and be able to continue with them, but I suppose I’m more upset that he’s been ra-raing his company in the media and saying how terrific the company is and how excited he is about his business, but he’s taken a lot of Australian and overseas companies for their money. You get very angry about those sort of things,’ he said.
‘Small companies like mine get hurt very, very badly when you take $33,000 off the bottom line. I’ve got to pay my employees tomorrow and I will because I’ll most probably have to go into my private savings to do it. I bet this bloke’s not doing that.’
The administrators, Chartered Accountants Lawler Partners, said in a statement that creditors will meet on March 19 and the company will continue to trade for the time being.
Taxpayers may foot the bill for unpaid wages after beleaguered newspaper publishing company Evans Publishing became insolvent on November 8.
But staff are still employed – Evans Publishing now trades as Independent Publishing Australia (IPA) and retains a largely familiar board, according to Echo sources. IPA publishes seven newspapers in regional and coastal areas of Qld and NSW, including the Tweed Coast Weekly.
A spokesperson from the Department of Education, Employment and Workplace Relations (DEEWR) told The Echo, ‘the department has received a number of claim forms from employees of Evans Publishing and we’re also aware of the circumstances in regard to Independent Publishing Australia.’ They added that ‘no assistance has been paid as the claims are still being assessed.’
Creditors, including the Australian Tax Office (ATO), were apparently left footing the bill for $2.8 million after liquidation on November 8.
It’s understood that liquidators RMG Partners sold the company’s titles to a consortium of previous owners plus businessman Scott Williams of Armidale.
According to The Echo’s sources, Independent Publishing Australia is 51 per cent controlled by Mr Williams while wife of former Evans Publishing director, Alison Evans, holds 49 per cent (under Evans Family Investments).
The restructure – which appears completely legal – also comes after Evans Publishing entered voluntary administration in September last year, owing substantial debts to creditors and the Australian Tax Office.
Then-director Brad Evans emerged from the administration after winning creditors’ support for a Deed of Company Arrangement (DOCA) that would have seen Evans pay unsecured creditors including the ATO less than 13 cents on each dollar owed. That forecast appears to have vanished altogether following the company’s liquidation.
ASIC records show the company had just $649 in the bank on October 17, 2012 after the administrator’s fees and expenses of more than $200,000 were paid.
Entered voluntary admin
According to the Voluntary Administrators’ report from September 6 last year, when creditors convened to consider the company’s future, a key feature of the DOCA that was to govern the company’s affairs included Williams taking over as controlling shareholder and chief financial officer.
This was later amended to Williams becoming chief executive officer of Evans Publishing. However, according to Echo sources, Williams held the CEO role for just five months before relinquishing the company’s management back to Brad Evans, who simultaneously resumed his role as the company’s director.
It’s not known what role IPA plays in the management of the newspapers bought by IPA.
None of the officials involved in the Evans insolvencies – IPA, the ATO, ASIC or the liquidator – would speak to The Echo about their involvement in the company’s collapse or its subsequent sale back to Williams and Evans.
It’s understood IPA has offered more than $290,000 for the titles to be largely paid in deferred instalments.
The Echo’s source added that the ATO has now lodged another proof of debt with RMG liquidators.