NDIS labour hire provider United Foundation enters administration citing registration changes and rising costs

A disability services labour hire company has entered voluntary administration and laid off 27 staff blaming regulatory changes, withheld NDIS payments and rising workforce costs.

United Foundation notified staff this week that administrators from Mackay Goodwin had been appointed in a move it described as a step to "keep trading while we sort the finances out". 

The move does not mean the company will necessarily wind up, but it does not guarantee survival either.

The company employs about 480 disability support workers for more than 1,000 NDIS participants in supported independent living settings in New South Wales and South Australia.

Many of the participants were caught up in the shock collapse of United Employment last year.

United Foundation, which is registered as a not-for-profit charity, took on the labour hire work after United Employment went under.

The director of United Foundation, Karim Amin, is separately contesting the validity of ASIC documents that show he was a director of United Employment for eight months. The case is being heard in the Federal Court.

In an internal email to employees Mr Amin said the decision was driven by "three things hitting at once": NDIS provider registration changes due to take effect from July 1, delayed payments from the scheme, and rostering costs exceeding the funding received for services.

"Voluntary administration is the opposite move [to liquidation]. It lets us keep trading while we sort the finances out so the business survives and your jobs continue," Mr Amin said.

The company told workers their pay would continue as normal and that superannuation, leave entitlements and visa sponsorship arrangements would not be affected.

Mackay Goodwin is expected to contact staff in the coming days with a formal notice of the administration to follow.

The administrators said they would continue operating the business and paying staff during the process.

However, 27 "non-essential" employees were made redundant the day after their appointment, a move the administrators said was necessary to cut costs and sustain services.

"We acknowledge the very real impact this has on those individuals and their families. Entitlement options, where appropriate … will be communicated directly to those affected," Mackay Goodwin said.

'They're going through it again'

ASU NSW secretary Angus McFarland said some workers had moved to United Foundation from United Employment when it went into administration and then into liquidation.

"We're really worried about the same group of workers being churned through the system," he said.

The union said some employees were still waiting on entitlements from a previous collapse and now faced more uncertainty.

"We still actually haven't secured the entitlements … from 12 months ago and now they're being told they're going through it again," Mr McFarland said.

A spokesperson from the Department of Employment and Workplace Relations said that 117 former employees of United Employment have lodged claims under the Fair Entitlement Guarantee, a scheme providing assistance for unpaid employee entitlements in insolvency. 

Of those claims, 110 have been processed, they said.

A Fair Work Ombudsman spokesperson said "the FWO is investigating both United Employment and United Foundation. As these investigations are ongoing, it is not appropriate to comment further".

Administrators will now determine whether the company can be restructured, sold, or ultimately wound up.

The National Disability Insurance Agency, which runs the NDIS, has been contacted for comment.

The union is also calling for tighter oversight of labour hire firms, arguing that New South Wales lacks a licensing scheme to prevent potentially unsuitable operators entering the market.