Ad agency employees told to sign secrecy clause to get paid out

As employees at an award-winning branding agency arrived at their Sydney office early one December day in 2024, they found the doors locked and a notice sticky-taped the glass.

It said the agency, For The People, was more than $25,000 behind on rent.

It was an alarming development for staff, who were looking forward to celebrating the end of the work year with a team-building session at a luxury Blue Mountains retreat the following week.

Despite the planned trip, some employees had been growing worried about the company's finances — their salaries were sometimes paid late, and superannuation was missing.

The note on the door was another red flag that something was seriously wrong.

According to a liquidator's report to regulator ASIC, now obtained by the ABC, the company's director, Chris Billing, is suspected of having operated the agency in insolvency for years.

The liquidator's investigations are ongoing.

The Australian Taxation Office sought wind-up orders in the Federal Court last October, as the amount of tax owed by For The People Agency climbed to almost $5 million.

In February, the court ordered For The People Agency be wound up in insolvency, appointing liquidator Shelley Brooks to the case to investigate the company's affairs and distribute any money from assets to creditors.

Her preliminary investigations suggest For The People Agency may have been insolvent from at least May 2019, and likely earlier, and has confirmed to the ABC that she is investigating potential phoenix trading.

Staff at the agency were this year transferred to a new registered agency, For The People Agency Australia.

ASIC describes illegal phoenix trading as when a new company, for little or no value, continues the business of an existing company that has been liquidated or abandoned to avoid paying outstanding debts.

The ABC approached Mr Billing for comment, but he declined to provide an on-record response.

Employee started to notice red flags

At its height, For the People Agency boasted offices in Sydney and Fremantle, with staff also working out of Launceston and the United States.

Former staff describe it as a company with a great reputation and a talented, driven, and award-winning team, but behind the scenes, For The People was spiralling into debt.

For former employee Hannah, whose name has been changed, concerns that something wasn't right with the company grew slowly.

"The team seemed lovely, everyone was busy, we were gradually growing, hiring a few people … and then it was probably after a year, I noticed I had not received all my super to my account.

"I did get some payments, so I was like 'ok, this was just someone managing money in a certain way'," Hannah said.

"It wasn't red flags yet to me, and then soon after that, I started to notice that 'oh, my salary didn't arrive on the day that I expected it'."

After that, more often than not, her salary was late.

"It would be almost every month, sometimes it'd be three days late, then it'd be two weeks late, sometimes even longer, and then it became this topic that we really openly talked about, like 'hey, have you been paid yet?'.

"I was losing sleep, I was getting quite anxious."

Employees could only get payout if they signed up to secrecy

As the amount of unpaid staff entitlements grew, many of the agency's employees left, turning to the Fair Work Commission for help.

Through that process, the ABC has spoken to three former staff who were asked to sign an agreement in order to receive their outstanding money, but the agreements included confidentiality and non-disparagement clauses, preventing them from speaking out or warning others.

According to the commission, settlement terms are determined at the discretion of the parties, and "most options are on the table".

It said it did not have records of the agreements made between parties, and once finalised, those cases remain "private and confidential".

Corporate law professor Jason Harris from the University of Sydney said that secrecy could be problematic.

"Where we have a pattern of behaviour where employers over multiple companies are … underpaying employee entitlements, employees should be able to warn other potential employees about what has happened to them," he said.

"To the extent that the Fair Work Commission is involved, I guess the community would expect that the commission would not want to be facilitating or approving or sanctioning these types of arrangements, where (in a case of) wrongdoing against employees, there's an attempt to try and hide that from the public."

One former employee, who wants to remain anonymous because of the agreement they signed, describes feeling conflicted.

"Outside of obviously the fear of the future and our own financial futures, the hardest part was the guilt of knowing that signing a non-disclosure agreement meant we wouldn't be able to speak out, and wouldn't be able to warn other people of this pattern of behaviour, and worrying how many other victims would be hurt by this," they said.

That worry soon became a reality.

Secrecy clause stopped new employees from being warned

Kate, whose name has also been changed, joined the agency after others, including Hannah, had left.

She initially thought it would be her "dream job", but she soon realised not everything was as it seemed — many of the people she'd expected to be working alongside were gone.

"When I started, I assumed I was going into this studio with all these people that have done all this work, but I quickly sort of realised that it was not those people, it was a bunch of new people and we were sort of told various reasons as to why that was," she said.

She believes those former team members were legally forbidden from contacting her.

"Initially, they were looking at my LinkedIn profile a lot, and I just couldn't figure out why, and I realise now that was sort of a warning signal; they weren't able to communicate."

Then, Kate's pay didn't arrive.

"It was a really difficult time for me, I had to rely on family and friends.

"I can't adequately describe how hard it is to work really hard at something you're really passionate about and be lied to," she said, referring to subsequent revelations about the company's financial position.

"You know, I'm living within my means, I don't live a glamorous lifestyle, so to not even be respected enough to have the right to my own money that I earnt is defeating."

Her superannuation account remains virtually empty.

It wasn't just staff who weren't being paid.

The liquidator has estimated For The People Agency's unpaid tax debt is just over $5 million.

Liquidator Shelley Brooks' statutory report to ASIC identifies a total $8 million in debt owed by the agency, which had just $494 in its bank account.

She says the agency "may have been insolvent from at least 1 May 2019".

Mr Billing has been the sole director of For The People Agency since July 2019, taking on the position from the initial founders of the company.

For Hannah, the revelations have been "bewildering".

"I just couldn't believe my ears when … I heard the millions of dollars that [the company] owes,"

she said.

Mr Billing also operated Tasmanian-based private education provider Foundry and was behind plans to develop a Creative Precinct, and later a luxury design hotel, in Launceston's CBD.

The same liquidator has uncovered that Foundry may have become insolvent in 2016, accumulating debts of over $8 million.

'Phoenixing' questions after staff transferred to new company

Liquidator Shelley Brooks' statutory report into For The People Agency reveals that the remaining staff were advised early this year that their employment would be transferred to a new, similarly named entity — For the People Agency Australia — which appeared to operate after the Australian Taxation Office initiated court action to wind up the first company.

Staff appeared to be using the same email addresses and website, and clients didn't realise the company had changed.

According to the report, although For The People Agency Australia was registered in 2023, it was not registered with the Australian Taxation Office for GST until October 14 last year — a week after the ATO filed a winding-up application in the Federal Court.

The liquidator's investigations are ongoing.

Corporate law professor Jason Harris from the University of Sydney explains that when a business is transferred after its incurred significant liabilities, such as tax debts, or has been underpaying employees' superannuation, this can potentially amount to illegal "phoenixing".

"What you can't do under the law is just leave your business behind as an empty shell and then start up by transferring the business to a new entity and think you never have to be held accountable for the old debts," he said.

Professor Harris said that despite their illegality, phoenixing arrangements often go unpunished.

"ASIC certainly does bring cases in relation to illegal phoenix activity, but you could count the number of cases on one hand in each year," he said.

"It reflects a broader inconsistency in our legal system, where we basically throw the book at people who commit violent offences.

"If you hold up a service station with a gun you'll go to prison for several years, but if you steal $10 million from the tax office by not paying tax or rip off your workers, then probably nothing will happen.

"That's a system that really needs to change."

Despite its debts, For The People Agency loaned $2.25 million to a related entity, another company directed by Mr Billing called Ebenezer Co.

The liquidator's demands for that loan to be repaid have been met with silence.

Duncan Wright operated a Fremantle co-working space used by For The People Agency, and was later hired by the company as a freelance photographer, working on a healthcare campaign.

"We shot the campaign, it was all really good, the client loved it, and then [For The People] just weren't paying the bill, they weren't paying the invoice for the campaign, and they weren't paying the studio rental bills either, and that's when I sort of realised what was happening," he said.

At one stage, Mr Wright received a screenshot of a money transfer that the company claimed showed $2,709 had been sent to his account — but Mr Wright didn't receive the funds — something he said further heightened his suspicions.

After waiting months for his money and encountering difficulties even contacting For The People, Mr Wright discovered that the ATO had launched Federal Court action against them.

He joined the case and was able to secure a total payout of just over $18,000.

"I just think it's very important for freelancers to be aware of who they're dealing with, and if you're not getting paid and the company is not coming across as quite as legitimate, just make sure you really follow them up," he said.

"It probably happens far too often — freelancers just getting fobbed off and the bigger company kind of taking a win."

According to the liquidator's report, "significant amounts of money were transferred [from For The People Agency] to related parties that may be deemed unreasonable director-related transactions."

Those investigations are ongoing.

The liquidator has also flagged potential uncommercial transactions and unfair preference payments, and said alleged breaches by Mr Billing would be reported to ASIC.

When the ABC asked if it had taken any compliance action or issued any fines to For The People, the Fair Work Ombudsman said it had "no comment on the businesses named".

ASIC said it could not comment on whether or not it was investigating.