How a Toronto daycare was thrown into turmoil after it was bought by a corporate chain

The day care chain, which acquired a rapidly expanding Toronto independent facility, was able to evict most of its employees and many families within weeks, according to some parents and staff.

Lullaboo Nursery and Childcare Center Inc., which has promised to provide thousands of new childcare spaces over the next few years, is now facing a lawsuit from the former director of the daycare.

This case is an example of the potential pitfalls facing the daycare sector as the for-profit side rapidly expands and attracts more people to meet the government’s childcare space goals. Interest from investors.

Lullaboo was founded in 2008 by wife and husband team Irini and Halim Mikhael. According to the company’s website, it grew steadily during his first decade, with an average of one added per year. But the company’s expansion accelerated when the federal government pledged to work with states. Childcare subsidy And create new spaces for children.

Ontario’s Minister of Education Stephen Lecce and two Progressive Conservative MPs attended the ribbon-cutting for Laraboo’s new location, the 11th in Mississauga in early 2022. In a LinkedIn post to celebrate the event, Michael said the company plans to open three more locations. By 2025, he has a goal of 25 locations.

In a separate post about the construction of the new Brampton facility, Michael said Larraboo plans to deliver on 5% of the state’s pledge to add 86,000 childcare spots by the end of 2026.

Lalabu has “doubled its revenue every 24 months since its inception,” according to a brochure posted online by Behar Group Realty, a brokerage firm that serves Lalabu. According to the brochure, the day care chain will continue to maintain “exponential revenue growth” going forward.

Most of the new locations were built from scratch, but the company’s first acquisition of an existing daycare business was the North Toronto Early Years Learning Center, which had two locations. The main facility on Avenue Road and the smaller facility on Bedford Park Avenue only offered half. – Day care.

According to documents, wrongful termination lawsuits, and interviews with the parents and former staff of three people, the acquisition will prove to be immediately devastating for employees and families at the Avenue Road location.

The Globe and Mail did not identify parents concerned about their children’s well-being, nor educators fearful of their professional repercussions.

Within 24 hours of the purchase being confirmed on Oct. 27, Lullaboo sent existing staff new employment contracts and asked them to sign them within days.

However, the staff had concerns. New contracts paid less. For example, employees with years of experience were offered a base salary of $15.50 (the Ontario minimum wage), with additional payments coming from state subsidies. The contract also gave all staff her members a three-month probationary period of his, barred them from taking outside jobs, and said Lalaboo could move staff elsewhere at any time. I’m here.

Martha Friendly, executive director of the Toronto-based Childcare Resources and Research Unit, said labor costs could be the first cost to hit, as they make up the biggest cost for child care centers. She said 2017 data showed that 25% of licensed Ontario daycare workers earned the minimum wage, but most worked for for-profit companies. was

“This is like lowering the quality of for-profit childcare centers and lowering staff turnover,” Ms. Friendly said.

On October 28, the Michaels held a virtual meeting with parents to discuss the acquisition. According to a wrongful dismissal lawsuit from Jennifer Andrade, who was then director of the center, Michael used the meeting to come fix the daycare because it was poorly run and in a state of complete disarray. I informed my parents. .

The following week, a group of more than 50 parents emailed Michael expressing concern about the potential disruption to the center’s educational programs and staffing midway through the school year. “I cannot stress enough how important our current faculty and staff are to the running of our school and our community. We fully support and stand by our teachers,” the email said. I’m here.

According to the lawsuit, Michael invited his parents to open the city hall on November 8. One of his guardians even offered to buy the center to maintain the status quo, but Mikael declined.

Over the next few weeks, staff began quitting. Andrade said 16 of his 19 employees at the center eventually retired.

Andrade, who has run the center for 18 years, had his last job on November 18th. She was then effectively demoted to her receptionist duties and sued Lalaboo for her constructive dismissal, alleging that her owner intentionally inflicted emotional distress on her. .

Irini and Halim Mikael did not respond to requests for comment for this article.

According to a statement by her lawyers filed on January 18, Andrade “cried tears of joy and relief” when she learned that the center had a new owner. The statement added that the change was welcomed by other employees.

They also denied changing Andrade’s obligations and said Mikael’s comments to parents regarding the daycare’s financial position were “completely and unequivocally true.”

After two months of new ownership, parents continued to voice concerns. On December 2, a group of 20 parents wrote to Mr. and Mrs. Mikael, expressing their frustration that the teachers had retired and that the curriculum had changed, as well as the renovation work that was taking place during the day. , reiterated safety concerns about contractors entering and exiting the building without being seen. identification.

In a response sent on December 4, the Michaels told their parents that this was their first acquisition of a running school and they admitted they made mistakes in the transition.

“Maybe the initial mistake about the new contract with the educator was too big to overcome. All initiatives to bring about further improvement are taken with distrust and cynicism. It seems,” the email said, adding: “

At the same time, Lullaboo enrolled parents in a fundraising campaign for the SickKids Foundation, which aims to raise $100,000 by the end of the year. In an email to his parents on Dec. 13, the company said it would automatically add $3 to his bi-weekly bill for donation activities, but said, “I want to donate that small amount. If not, gave him a week and a half to opt out. amount. “

The Globe spoke to three parents whose children have been or are about to be expelled from school. They said they are in contact with other families who are moving their children to the new center.