Flag raised over S Central staff entitlements

Flag raised over S Central staff entitlements

Question remains as to what will happen to the S Central company shell

S Central's current and former staff have expressed concern over the company’s sale to managed services provider, Brennan IT, and its impact on their entitlements.

Several employees, who asked to remain anonymous, told ARN they had not been paid for at least two weeks. One former employee claimed to have lodged a complaint with the Fair Work Ombudsman.

As part of the business asset purchase, Brennan has offered jobs to up to 90 per cent of S Central’s employee base. However, it is understood Brennan will not assume any liabilities for staff entitlements such as annual leave, former pay cheques and expenses. Instead, these will remain with the S Central company shell.

The question now hanging in the air is whether the S Central shell will be placed in receivership or liquidated.

Brennan IT’s Dave Stevens confirmed that there were unpaid staff entitlements at S Central. Staff would need to gain entitlements through the Federal Government’s GEERS program. However, GEERS is only available to employees from a company that has been liquidated or gone into receivership, raising speculation that the S Central shell is about to be liquidated.

“That’s a complex question. All staff with unpaid entitlements have the GEERS program available to them,” Stevens said. “However, the GEERS program does not cover discretionary items such as commission and bonuses. We have undertaken to pay those for staff who join us.” GEERS is also not available to a number of S Central and Infotronics' consultants.

S Central staff will be able to start work for Brennan from Wednesday. The first pay day will be Friday, Stevens said. The service provider also has set-up a program to provide temporary staff who make the move over to Brennan and are in need of funding.

Earlier in the day, S Central managing director, Peter Mavridis, admitted the company experienced difficulties paying employees for a short period, but denied industry reports that it still owed money today to its staff.

There are also concerns whether S Central and its niche distribution subsidiary, Infotronics, will pay out their suppliers. Stevens confirmed Infotronics has been sold as part of the S Central asset bundle to Brennan IT. He estimated there were 10 staff, but sources close to the company claimed there were only 3-4 left full-time.

Infotronics’ supplier debts are estimated at just over $1 million. Its vendor line-up includes Celestix, Veeam, VirtualIQ, SonicWall, Kerio, Appsense and Thinprint. S Central's vendor portfolio meanwhile, includes HP, Citrix and Dell.

Veeam's David Allison declined to comment on the status of its relationship with Infotronics or if it was owed money. Vizioncore, a former Infotronics vendor, was also unable to comment on how much it was owed from the business since cutting ties 18 months ago when it signed with itX.

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