01 Mar Fair Work Ombudsman Sends Clear Message to Accountants, Bookkeepers and Professional Advisers
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The Fair Work Ombudsman (‘FWO’) has commenced action for the first time against an accounting firm because allegedly their activities on behalf of a client assisted in causing a breach of the Fair Work Act 2009 (‘the Act’) because staff were underpaid.
In short, it is alleged that the accounting firm processed wages knowing that they were below the legal minimum and in doing so they were an assessory to the breach that occurred. In this case, two Taiwanese employees that were on a 417 visa were underpaid nearly $10,000.00. Accessorial liability provisions in the Act mean that a person who causes a breach to occur can also be liable to prosecution.
It is alleged that because the accounting firm had been aware of the correct rates of pay due to previous interactions with the FWO regarding their client.
Whilst this matter is yet to be finalised, the message is clear from the FWO. Professional advisors will be held to account where they assist employers to breach the Act, or knowingly undertake an act or make an omission that causes a breach of the Act.
Fair Work Ombudsman, Natalie James stated in relation to this matter; “We have been concerned about the role of professional advisers, such as accountants, and HR professional, in some serious and deliberate contraventions”.
Whilst accountants are the target in this instance, HR professionals, bookkeepers and business coaches clearly need to take on board the comments of the FWO.
The FWO is the government agency charged with ensuring compliance with federal workplace laws. The agency generally seeks to enforce compliance with these laws on a voluntary compliance basis and through extensive educational activities. However, this agency has real teeth and will use them if the methods above do not achieve their desired outcomes. The agency has the capacity to enforceable undertakings and also undertakes prosecution actions for serious or repeated breaches.
There are significant penalties for breaching workplace laws of up to $54,000.00 for companies and $10,800.00 for individuals per breach. Given that it is possible, in most cases probable, that a company doing the wrong thing may have a number of breaches, the quantum of the fines can be massive. Penalties in the hundreds of thousands of dollars have been ordered against companies and those companies also then have to make back payments of wages.
The FWO also routinely takes action against company Directors or senior managers where those persons have acted in a manner that causes the breach to occur. These actions are taken personally against the Directors and managers as individuals and as a result, they are personally responsible for any outcome that flows from the prosecution.
In addition to the penalties, the FWO, with a few exceptions, has shown itself to be adept at getting press coverage for their activities, especially compliance activities. If you are prosecuted or have to enter into an enforceable undertaking, you can expect to read about it in the media generally with the article including the company name. Not good for a public relations perspective.
It is critical that employers understand their obligations and meet their commitments.
Further information on a range of industrial relations issues is available at www.essa.net.au or please call (08) 9420 4230.