Smiles Inclusive CEO Tony McCormack steps aside

Smiles Inclusive (ASX: SIL) CEO Tony McCormack (pictured below) has resigned within a week of the embattled dental company announcing the majority of its workforce had been stood down.

With most dental practices closed on an "on call" basis, the company was already struggling with cash flow problems prior to the Covid-19 outbreak and has been in a trading suspension since early March.

In its announcement last week, the Gold Coast-based group even went as far as announcing its board, executive, senior management and the majority of support staff would be on "stand down".

At the time, McCormack flagged the possibility the JobKeeper payment would be their only remuneration for the foreseeable future.

This drastic action followed an incident on 25 March when Smiles employees received a letter explaining they would be stood down on unpaid leave, only to have McCormack tell Business News Australia the correspondence was incorrect and a "misunderstanding".

The letter from HR told staff they were being stood down due to an "insufficient ability to productively engage" them on the current roster. 

"At this stage it is not known how long the stand down period would last and we will communicate this when we know more," the letter said.

"It is important to note that you are still employed during a stand down and you will continue to accrue all leave entitlements."

It is not known how many staff received the letter, however in the group's annual report last year it listed more than 400 employees were in the group.

But on 26 March, McCormack claimed staff were in fact not being stood down.

"The wording of the letter was inappropriate and it was withdrawn shortly after," he said.

"It was just a misunderstanding of discussions that had been held and wasn't validated before it went out, that's all."

McCormack declined to comment when asked if he could provide a copy of the correspondence withdrawing the letter, and the then recently appointed deputy CEO Michelle Aquilina declined to weigh into the matter as well.

Aquilina has now been appointed to replace McCormack in the CEO role.

"With extensive strategic, operational and financial business experience spanning over 30 years, we are very fortunate to have an extremely able candidate to fill the role of Chief Executive Officer and Managing Director in Michelle Aquilina," says chairman David Usasz.

"Tony agreed to help the business at a difficult time inheriting an exceptionally difficult set of circumstances and a very hostile environment.

"His leadership, knowledge, skills, unwavering diligence and hard work has resolved many significant issues, contributed to improvements in the Company's systems and processes and enabled a better understanding of the elements needed for the sustainable success of the Smiles business model."

Usasz says Aquilina's appointment is the next phase in the recovery of the business.

"Notwithstanding the challenges that the current COVID-19 crisis represents for the business the Company is taking this opportunity to undertake a recovery plan for post the COVID-19 environment, resetting the organisation's strategic growth plan," he says.

Business News Australia