External business advisers, including accountants, book keepers, business consultants, payroll service providers and other advisors, must be aware of the risks of helping businesses to underpay workers, according to national industrial relations consultancy Australian Workplace Strategies.
Advisers need to understand and assist their clients to ensure compliance with workplace laws – or face serious consequences, including hefty fines.
Business Law Specialist, Jim Parke of Australian Workplace Strategies, says the need for vigilance in compliance at all times was recently demonstrated by the Fair Work Ombudsman taking successful legal action against a professional services firm for being an accessory to the contravention of workplace laws by a client.
In EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134, the full court of the Federal Court of Australia affirmed a decision of the Federal Circuit Court to fine a Melbourne accountancy practice for being an accessory to exploitation of a worker by one of the firm’s clients, a Japanese fast food chain. The amount of the fine was $51,330.
In handing down its decision, the Federal Court found the accountancy practice was knowingly concerned in contraventions of the Fair Work Act 2009 (Cth) over the employment of two young Taiwanese people on working holiday visas.
The fast food chain was penalised $115,706 after admitting it underpaid the two people a total $9,549 between 2014 and 2015.
The Federal Circuit Court had found the accountancy practice was involved in facilitating $750 of the underpayments to workers.
Mr Parke says this matter shows the Fair Work Ombudsman is prepared to use accessorial liability laws to hold any party involved in the exploitation of vulnerable workers to account.
“It is likely this case will pave the way for future proceedings to be taken against external advisors and internal personnel who the Fair Work Ombudsman finds to have had knowing involvement in employers’ failures to comply with workplace laws.”
He says advisers must know and explain compliance obligations to their clients and make it very clear if they are in danger of breaking the law. The advisers also must not become involved in breaches of the law themselves.
The Federal Court decision sends a clear message to advisers they need to be aware of their responsibilities to act within their competencies and the importance of scoping and documenting the terms of their engagement to provide services. It may also be necessary for them to seek a second opinion or further external advice if they are concerned about their clients’ or their own ability to ensure compliance. Aside from limiting risk by procuring appropriate professional advice, this can also be a way for advisors to market further services or add value to their services.
Australian Workplace Strategies can assist employers to ensure compliance with industrial relations obligations and help to resolve disputes regarding employee entitlements.