All 14 employees at a plumbing company have lost their jobs on the spot just weeks before the firm appointed liquidators.
News.com.au can reveal that JL Plumbing & Drainage (VIC) Pty Ltd went under last Friday.
Liam Bellamy of insolvency firm RRI Advisory was appointed as the liquidator.
The business, based in Victoria’s Mornington Peninsula, carried out commercial and residential plumbing and had been a registered company since 2018.
But like many businesses in the building sector, financial woes started to hit JL Plumbing & Drainage, with trading losses and poor economic conditions.
The company had also failed to respond to a creditor’s statutory demand, which the liquidator, Mr Bellamy, said was another contributing factor.
“It had 14 employees which were terminated, I believe they were terminated early June,” he told news.com.au.
According to documents submitted to Mr Bellamy, JL Plumbing & Drainage had not been trading since 1 June.
In total, according to preliminary investigations, the plumber owes $750,000 to 32 creditors.
Plumbers at the collapsed firm are owed about $82,000 in unpaid superannuation, annual leave and payment in lieu of notice.
The ATO is owed about $475,000.
There are also an additional 17 other creditors. They are cumulatively owed $200,000.
Mr Bellamy said JL Plumbing & Drainage “likely traded insolvent” near the end of its existence due to the outstanding bills.
News.com.au contacted the director of JL Plumbing & Drainage for additional comment.
JL Plumbing & Drainage’s collapse comes in the wake of three prominent plumbers also succumbing to the inevitable.
Earlier this month, news.com.au reported that C & S Plumbing had gone broke, resulting in all 70 employees at the Victorian plumbing firm becoming unemployed.
C & S Plumbing, which had offices in Benalla in northeastern Victoria and also in Melbourne, owes around $12 million to creditors.
Of that, $2 million is owed to staff from unpaid entitlements.
CDC Plumbing and Drainage collapsed in February owing $7 million to creditors while Richstone Group liquidated in June with total debts of $22 million.
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The building industry and related businesses like plumbers have been caught up in the perfect storm of factors such as labour shortages, rising costs of materials and supply issues, which has caused record numbers of them to collapse in the past 12 months.
Indeed, Mr Bellamy said that every third or fourth liquidation job he is appointed to is in the construction industry.
ASIC insolvency statistics show 2213 building companies collapsed during the 2022-23 financial year — a 72 per cent increase on the previous 12-month period.
The alarming trend has been blamed on a “perfect storm” of factors, including fixed price contracts, escalating costs, supply chain disruptions and tradie shortages.
The previous Morrison government’s HomeBuilder grant, which was introduced in June 2020 and handed out $2.52 billion to owner-occupiers who wanted to build or substantially renovate a home, turbocharged the sector.
More than 130,000 customers signed on for the program, with many tradies agreeing to the work under fixed-price contracts that soon became unsustainable as prices began to soar.
This year alone, news.com.au has reported on dozens of major builders that have collapsed.
Australia’s 13th biggest builder, Porter Davis, also collapsed earlier this year, placing 1700 projects and another 779 empty blocks of land in jeopardy across Victoria and Queensland, while more than 1000 unsecured creditors owed a whopping $71 million.
In one week in July, news.com.au reported on a new builder going into external administration every day.
alex.turner-cohen@news.com.au
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https://www.news.com.au/finance/business/other-industries/plumbing-company-collapses-into-liquidation-as-staff-sacked/news-story/81deaeb1447dcf42101a4c1ddd10ab5a
