‘An absolute mess’: staff worked unpaid for weeks before childcare centre folded

Teachers at a troubled early childhood education centre stayed on for weeks without pay to keep things normal for the children, they say.

To the shock of parents and staff, Little Red Fox (LRF) on Nayland Rd in Nelson closed its doors unexpectedly in late April after being placed in liquidation. An initial liquidator’s report shows director Bethany Fox is more than $800,000 in debt.

Her home, a new build property she never lived in, is listed on TradeMe for $1.2 million.

Fox did not respond to questions put to her at her rented Richmond home, or via text.

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There had been signs of trouble ahead of the closure: LRF’s sister centre had closed, and wages hadn’t been paid. But Fox had assured her staff there was nothing to worry about, and had even hired new staff days earlier.

Former LRF employee Sarah Richards described the ripple effect of the sudden closure.

“Everyone’s left without jobs, families can’t go to work; teachers have been having children in their homes. [Fox] has left an absolute mess.”

Richards began working for Fox four years ago, helping her grow the company, which initially offered home-based education for children under 6.

The business grew quickly, and in August 2021, Fox opened the Nayland Rd site, followed a few months later by a sister centre in Golden Bay.

LRF manager Elise Walton would drive over the Tākaka hill each week, forging close relationships with the staff there as she worked to get it up and running.

The centre, a “stunning; a really cool old building” with access to the bush and the beach, never really got off the ground, Walton said.

“[Fox] thought because there’s no other preschool [in Golden Bay] she’d save their community, she’d be full within a few months and that’s that,” Walton said. “It doesn’t work like that in Golden Bay; it’s a tight community, it takes a while for them to get to know you.”

And although they had “lots of amazing unqualified staff,” qualified teachers were difficult to find, Walton said.

LRF Golden Bay lasted five months, closing around the same time that Fox transferred her home-based operation to home-based education company Tiny Nation.

Stuff understands there were issues with the transfer. However, Tiny Nation director Erin Maloney did not want to comment, saying she was “working through a litigation process”.

Then, early this year, staff began receiving their wages late, or not at all. Fox made excuses, staff say.

“I got a text saying the payroll team had been hit by Covid,” Walton said.

Walton ran a tight ship, priding herself on good practice and fostering a tight-knit community of staff and parents. She told Fox to pay her teachers ahead of her.

“I asked her, are my teachers going to get paid? [Fox] said, ‘yes, yes it’s fine’.”

Walton began making plans to buy the centre from Fox. It had been her plan anyway, but now it was imperative to keep the licence current, staff employed and children in their routines.

Then, on the last Friday in April, a liquidator turned up: Fox had put the company into liquidation, and the doors had to shut.

Walton felt let down by Fox, who instead of being honest with her staff, chose to “hide”, or let her manager front difficult announcements, she said.

“It’s not a big corporation that’s been let down by the board of trustees, we’re a tight-knit family, we knew everyone.”

She, and her 3-year-old son, missed the camaraderie and the community of the centre she’d built, Walton said.

She credited her teaching staff for doing their best under trying circumstances. “They all just kept working [unpaid] for the children, it was like our second home. We wanted to be there.”

Stuff has heard from about a dozen parents and teachers impacted by the closure.

A teacher, who asked to remain anonymous, said she had reacted with shock when Fox told her staff she would not be able to pay them.

“I let rip,” she said. “You can’t come in and tell us you’re not giving us four weeks notice: we have mortgages, we have bills, we have lives.”

The teacher had been saving hard for IVF treatment. However, after LRF folded, she had to dig into her savings to pay bills.

“She robbed me of IVF funding, she stole my chance to have a baby.”

Having to tell parents the centre was closing was “horrible”, she said.

“Each parent that came in I would just burst into tears. You invest everything into the kids, they become a part of you, and now they’re gone.”

Kelly was hired weeks before the centre closed. “She knew that I had just built a new home, have a mortgage and left my job,” she said. “She [hired me] knowing this was going to happen.”

Parent Chelsea Marshall said with local early childhood centres oversubscribed, the closure had been a blow.

“As if we didn’t have enough guilt as working parents …Juggling work and children is already hard enough without this on top. What [Fox] has done has had such a huge horrible impact on so many lives.”

Ministry of Education spokesperson Kayne Good would not confirm how much government funding LRF had received “because that information is commercially sensitive”.

Early childhood services generally received three annual funding payments based on their funded child hours, and managed their own finances, he said.

“When a service closes, like Little Red Fox on Nayland Road, our funding team works with the service provider to square away any under or over payments. Where liquidators are involved, our claims will be part of that process.

He did not respond to a question about what measures were in place to safeguard teacher salaries.