Energy Watch enters administration and lays off 50 staff but company looks to regroup

Energy Watch was placed into administration last week with about 50 staff made redundant and $580,000 in superannuation owing, but the company is set to resurface in another form with concerns expressed that staff will be left “high and dry”.

The utility broker’s difficulties became public when founder and former chief executive Ben Polis stepped down from his role after making racist and offensive remarks on his personal Facebook page. 

Energy Watch’s troubles deepened when the Fair Work Ombudsman issued it with a compliance notice on Tuesday demanding payment of $580,000 in staff’s superannuation by the end of May.

However, the next day the company announced it was to be “reinvigorated” after a sale to a consortium headed by entrepreneur Danny Wallis, who founded the $100 million information technology service provider DWS Limited.

The Wallis consortium of private investors agreed to buy 100% of the business through a new company named Energy Watch International.

Energy Watch International and Energy Watch Trading were both registered with the Australian Securities and Investment Commission the week before Energy Watch’s administration was announced.

The acting chief executive of Energy Watch, Luke Zombor, said Wallis was “the perfect white knight” for the company and said the “proposed sale would safeguard the jobs of more than 80 people”.

Zombor will be retained as a consultant and there will be a new board and senior management team appointed.

However, Australian Services Union Victorian secretary Ingrid Stitt told SmartCompany she had a “very bad feeling” about the deal.

The union has been investigating claims of unpaid superannuation at Energy Watch for over 12 months and it estimates 300 past and more recent staff are owed money.

“Our concern is that the original employing entity may not have any assets left and so there is an issue as to whether or not the employee entitlements will be secure or not,” says Stitt.

“The employees are really the victims, it looks like the people who ran Energy Watch are going to try and reinvent themselves through this new business, but there is going to be a lot of people left high and dry as a result of this fiasco.

“If Energy Watch does liquidate, the Fair Work Ombudsman’s compliance notice will have no effect.

“We will be meeting with the administrators very soon and trying to work out whether these unpaid entitlements will be met.

“We will be pressing the new owners to make sure those made redundant last week get all their entitlements met: morally, they should make sure people don’t walk out the door without their full entitlements paid.”

Mike Smith, spokesperson for Energy Watch, told SmartCompany there were provisions to look after the employee’s superannuation.

“Going into administration gives the employees a better result than if it went into liquidation because the statutory role of an administrator is that it won’t approve a future for the company unless it is a better result than liquidation,” says Smith.

Glenn Franklin, of administrators Lawler Draper Dillon, told SmartCompany the old Energy Watch entity had ceased operations and all employee services were terminated.

“This administration gives me the platform to deal with all of their entitlements, I will be working with the purchasers of the new business through the administration process to make sure the employees claims are processed,” says Franklin.

“If there is a deed of company arrangement put forward that will cover employee entitlements; that will be a better return than liquidation. “

Franklin says alongside the unpaid superannuation there is also a “small amount” of wages still owing, unpaid annual leave, redundancy payments and also payments for notice.