A major security business appointed by the AFL to patrol Marvel Stadium has collapsed owing almost $2 million to the tax office, while a liquidator investigates claims that hundreds of staff did not receive award rates, superannuation and other entitlements owed to them.
GSS Group was voluntarily placed into liquidation in September, just three months after this masthead revealed the security company had exploited vulnerable workers and caused significant concerns for the AFL and its integrity unit.
Marvel Stadium confirmed in June that in response to the allegations against GSS Group it would overhaul its security arrangements, with a plan to move management of the stadium’s security in-house, while using contractors to provide extra guards for matches and major events.
The liquidation of GSS Group follows the dramatic collapse of MA Services , which provided security and cleaning services to several AFL clubs and was due to be a key sponsor of the Melbourne Demons until The Age revealed it was engaged in alleged widespread tax fraud and underpayment of migrant workers.
While the claims involving GSS are not on the same scale as MA , the collapse of both firms underscores systemic integrity issues within the private security sector and the risk to organisations reliant on private guards becoming embroiled in wage theft scandals.
Liquidator Peter Gountzos from SV Partners Insolvency confirmed he was aware that GSS Group “may have historically underpaid some employees”.
“We are in the process of reviewing the company’s employment records in order to calculate and verify any outstanding priority entitlements (including superannuation) as at the date of our appointment,” Gountzos said in a report on September 23.
He also confirmed almost $3 million in loans made by GSS Group before its collapse, some to related entities, would be examined by the liquidator.
A deal made by GSS in August to transfer assets and staff to a new company called Millenium Services Group would also be investigated by the liquidator, according to the report by Gountzos.
“The company (GSS Group) agreed to, among other things, provide interim services to Millennium including facilitating the transfer of its employees (as mutually agreed) to Millennium. The intention appears to have been for the company and Millennium to work towards a future agreement relating to the acquisition of the Company’s assets,” according to the liquidator report.
Financial documents reveal GSS Group owed more than $1.7 million to the Australian Taxation Office and $94,000 to the state revenue office at the time of its collapse, while any debts to staff were not disclosed due to privacy reasons.
The Age revealed in June that GSS Group had repeatedly failed to pay award rates for weekend shifts and engaged subcontractors who routinely paid workers in cash.
Management of the AFL-owned Marvel Stadium had been tipped off earlier this year about the possible underpayment of guards and, after making inquiries, were assured by GSS the problem was quarantined to subcontractors and had been rectified.
However, a series of WhatsApp messages revealed at least two subcontractors used by GSS Group continued to make cash payments to guards. The Victorian Labour Hire Authority is aware of both subcontracting firms and continues to investigate claims that some guards received as little as $30 cash an hour.
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