Hugo was “shocked” when he found out his employer, grocery delivery business Send, was placed into voluntary administration in early May.
- Grocery delivery business Send was placed into liquidation on June 7
- Former employees say many migrant workers will not be able to claim for unpaid wages
- Federal government recommits to reforming “unfair” scheme
That shock soon turned to anger when he discovered, after seeking legal advice, he wouldn’t be able to recoup more than $10,000 in wages and entitlements he is owed.
“I’m never going to see my money again,” said Hugo, who declined to use his surname out of fear it could impact future visa or residency applications.
As one of Send’s store managers, Hugo was on a full-time contract and paid tax, but as a temporary visa holder, he is not eligible to make a claim through a federal government scheme.
That scheme — the Fair Entitlements Guarantee (FEG) — can cover certain unpaid employment entitlements for eligible employees who lose their jobs due to employers liquidating or going bankrupt.
Protection call for migrant workers
A national coalition of legal centres and non-government organisations is calling for better protections to protect migrant workers, in a move backed by the small business council.
“What this means is that international students, people on working holiday visas and other temporary visa holders miss out,” said Catherine Hemingway, legal director at the Migrant Justice Institute.
“It’s … discrimination.”
The Attorney-General’s Department confirmed to the ABC that the federal government plans to extend eligibility for the scheme “to migrant workers with work rights”.
“The government is carefully considering the design of this policy and intends to introduce legislation to implement this commitment,” a spokesperson said.
“The timing of this is a matter for government.”
It is unclear if that change in policy will be able to be applied retrospectively.
It’s also not clear how many of Send’s 300, mostly casual, employees in Melbourne and Sydney are unable to recoup wages now using the scheme because they are on a temporary visa.
But Hugo estimated the majority of the company’s employees would be impacted.
He said he managed a team including 10-15 delivery drivers and estimated 70 per cent were on a type of temporary visa.
Hugo said a lot of the delivery riders were international students.
“All of those people are not going to see the money [they’re owed] and I don’t know what to tell them,” he said.
“Everyone is upset but … what can we do about it? The rules are the rules, and they are not made for us.”
Indian student Dhvani Sutariya was employed as a casual delivery rider at Send and in a standard week worked about 20 hours over four or five days.
When the company was placed into administration, she was owed about $2,100 in unpaid wages and entitlements.
She said she struggled to pay rent and had to quickly find another job to survive.
“I am still hoping to get my money back,” she said.
Send was placed into liquidation on June 7 after a second meeting of creditors that same day decided to wind up the company, according to Worrells, which is now overseeing the liquidation.
A Worrells spokesman said employees who are not able to access the government scheme may yet receive a payment for outstanding employee entitlements if “sufficient recoveries are made in the liquidation”.
Send founder and former chief executive officer Rob Adams said he was “deeply sympathetic” towards employees who could not access the government scheme.
“Care for our employees’ safety and livelihoods was something that was central to our business model at Send,” Mr Adams said.
“Hence why we opted to employ people directly and offered steady hourly wages, as opposed to working with third-party contractors who get paid on a per order basis, as is the case with delivery services such as UberEats.”
Government scheme ‘simply not fair’
Ms Hemingway said three years ago a Migrant Workers’ Taskforce made many recommendations to help such workers, including extending the FEG to all temporary visa holders.
Catherine Hemingway says the government needs to get on with making changes.
Advocates said there was bipartisan support for implementing the recommendations at the time.
The Attorney-General’s Department confirmed to the ABC “the government has committed to implementing the recommendations of the Migrant Workers’ Taskforce”.
Ms Hemingway welcomed that commitment but said it was time for action.
She said the exclusion of temporary visa holders from the scheme was “simply not fair”.
“Why should two workers who are doing the same job for the same boss be treated completely differently?” Ms Hemingway questioned.
“One with access to some of their unpaid wages, and one left with nothing when they’ve both missed out on their legal entitlements through no fault of their own?”
Send started operating during the COVID-19 pandemic and said it was “Australia’s first digital grocery store”.
The Send app had over 46,000 registered users and promised to deliver groceries “in under 10 minutes to your door”.
The company’s network had roughly 13 sites including several “dark grocery stores” in and around central Sydney and Melbourne.
Send spent a total of $11 million over the eight months it operated, a report sent to creditors on May 30 and filed to the Australian Securities and Investments Commission by Worrells showed.
The report noted the company’s main operating expenses were salary and wages, costing more than $5.5 million.
“The significant salary and wages expense incurred is associated with the company’s business model of groceries delivered in 10 minutes as the company was required to employ a large number of staff in order to meet its business model,” the report stated.
“Accordingly, despite attempts by management to reduce the losses incurred, it is clear that without external funding the company’s business model was not sustainable.”
Mr Adams said 2022 had “presented the most pessimistic global economic climate since the 1970s”.
“Despite our best efforts and demonstrating exceptional growth, we were unable to secure the necessary capital to remain operational, a heartbreaking result for everyone involved,” he said.
“I am fearful that this may not be the last we see of companies experiencing similar outcomes during this time.”
The report also noted that Send owed more than $1.2 million to employees for wages, superannuation, leave and “retrenchment”.
In a press statement from early May, Worrells then-administrator Matthew Kucianski said Send faced some “unique financing challenges given the composition of its international investors”.
“Like many tech start-ups, Send had a sizable cash burn that was being deployed to grow its market share,” he said.
“Send has been successful in building a leading position in the grocery delivery space, however, as a start-up it requires ongoing financial support.”