Recently, the issue of accessorial liability has been at the forefront of the Fair Work Ombudsman’s (FWO) agenda and it’s not a subject being taken lightly.
The Federal Circuit Court recently handed down a decision in a case that dealt with third party advisers who were knowingly aware of their client’s breaches of the Fair Work Act.
Accountancy Firm, Ezy Accounting, was found liable as an accessory for its involvement in a Japanese restaurant operator’s underpayments to its staff. The contraventions included failure to pay the minimum hourly rate of pay, the evening loading, the Saturday and Sunday loading, the public holiday penalty rate, the special clothing allowance, and failure to provide rest breaks and meal breaks.
Ezy Accounting was alert to the fact that the restaurant was failing to meet award obligations and paying their staff incorrect rates, however the company chose to “deliberately shut its eyes” to the contraventions occurring. Whilst the Court is yet to make a determination on the penalties against the accountancy firm, it could face up to $54,000 per contravention.
This decision is a reminder to third party advisers, including accountancy firms, payroll companies and HR consultants, of their obligations in actively ensuring their clients are complying with workplace laws. This means identifying the correct award and knowing what the minimum workplace entitlements are so compliance can be confirmed. The FWO are cracking down against those involved in award contraventions and it is highly likely that advisors will be caught in the line of fire.
If you would like more information or assistance in assessing award compliance please contact us.
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