Clifford Gouldson Lawyers

Accountants beware: Are you liable for your client's workplace breaches?

Print Version

9/03/2016

For the first time, the Fair Work Ombudsman (FWO) has commenced legal proceedings against an accounting firm for its alleged involvement in one of its client’s underpayment of two Taiwanese workers on 417 working holiday visas. 
 
The claim
 
The FWO has issued proceedings in the Federal Circuit Court in Melbourne against EZY Accounting 123 Pty Ltd (EZY Accounting) alleging that it was knowingly involved in contraventions of workplace laws.
 
Section 550 of the Fair Work Act 2009 (Cth)(the Act) provides that a person who is involved in a contravention (other than the employer) may be held accountable for the contravention.
 
This provision is potentially wide reaching and means that if third party business advisors are aware their clients are breaching workplace laws or knowingly facilitate any breaches, they could also be found to be liable for that breach.  Previously, human resource managers and directors have been found accountable under this part of the Act.
 
The facts of this case
 
EZY Accounting provided payroll services for Blue Impression Pty Ltd, the operator of the Hanaichi QV fast food restaurant in Melbourne (Blue Impression).  The FWO alleges that the workers were underpaid $9,549 between September 2014 to April 2015.
 
The FWO claims that EZY Accounting knew that:

  • the rates being paid to the workers were under the minimum hourly rates set out in the Fast Food Industry Award 2010 (the Award); 
  • the workers were not being paid sufficiently to cover public holiday penalty rates and loadings under the Award; and  
  • the workers were not provided with appropriate meal and rest breaks. 

 
In 2014, EZY Accounting assisted Blue Impression when it was audited by the FWO as part of its National Hospitality campaign.

During the audit, the FWO made EZY Accounting aware of the applicable minimum wage rates.  This was important because EZY Accounting had helped their client (Blue Impression) through the audit process and they had assisted their client with the calculation and rectification of the underpayments discovered as a result of the audit.  
 
Possible penalties for alleged contraventions
 
Both EZY Accounting and Blue Impression could face penalties of up to $51,000 per contravention.  The Operations Manager of Blue Impression is also facing penalties for her involvement in the alleged contraventions.  She could face fines of up to $10,200 per breach.
 
In the FWO’s statement issued on 19 February 2016, this type of proceeding does not seem to be an isolated event.  The FWO Natalie James stated that the FWO ‘has been looking closely at the involvement of third parties in contraventions of workplace law’ as it is ‘concerned about the role of key advisors such as accountants and HR professionals, in some serious and deliberate contraventions’. 

These court proceedings signal that the FWO is prepared to hold third parties accountable for their role in any contraventions of workplace laws.
 
What does this mean for businesses and accountants?
 
To minimise the risk to you and your clients, we recommend that accountants and bookkeepers ensure that they provide advice only in the areas of their professional expertise. 

In addition, if in doubt, partner with professionals who are able to provide their expertise on workplace laws to ensure your clients are aware of their obligations under these laws.
 
We will keep you apprised of the proceedings as they move forward.

For more information contact our Workplace Team.
Danny Clifford, Director Angela Pratt, Senior Lawyer
Nadia De Pascali, Lawyer Amie Mish-Wills, Lawyer
Nigel Saines, Lawyer Maddie Hargens, Paralegal
Contact Us
Phone 07 4688 2188
www.cglaw.com.au

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