Accessorial Liability for Workplace Law Breaches
By Herbert Fischbacher, Principal, MST Lawyers
The following recent cases illustrate the Fair Work Ombudsman’s intent to extend liability for breaches of workplace laws, including the underpayment of wages and award benefits, beyond the employer. While traditionally, liability has not extended beyond managers within an employer our Courts are now looking to extend liability to external advisers who facilitate or assist an employer in breaching workplace laws.
Case study 1 – Accountancy firm liable
An accountancy firm that provided payroll and bookkeeping services to an employer was held liable for that employer’s underpayment of wages and award benefits and was ordered to pay more than $50,000 in financial penalties. The Federal Circuit Court held that the firm had ‘deliberately shut its eyes’ to workplace breaches when it provided payroll and bookkeeping services to the employer. The Federal Circuit Court made the point that external advisers need to understand that they must put compliance with the law above their own business interests, or face serious consequences.
Case study 2 – Employer senior staff liable
The employer, being a restaurant owner, its shareholder/director and two of its staff were held accountable with respect to more than $400,000 for what the Federal Court labelled as wages theft. In this case, records were falsified to cover up wage benefit underpayments. The behaviour displayed was regarded by the Federal Court as systematic and deliberate and on a significant scale. In holding the employer’s staff accountable, the Federal Court observed that individuals employed by an employer, breached workplace laws, and failed to put compliance with the law ahead of their own interests; a strikingly similar sentiment to that expressed in case study 1.
The above cases highlight that the Fair Work Ombudsman and our Courts are increasingly looking to hold individuals within an employer, and external advisers to an employer, liable for breaches of workplace laws, including the underpayment of wages and award benefits. This trend is particularly relevant given the recent and substantial amendments made to the Fair Work Act 2009 (being the ‘Vulnerable Workers’ amendments) that, in part, significantly increased financial penalties that can be imposed for such breaches.
For more information, please contact MST Lawyers’ Employment Team by email or call +61 3 8540 0200. We happily arrange Skype and telephone appointments for our interstate and overseas clients, accommodating time differentials where required.