Following the “accessorial liability” provisions under section 550 of the Fair Work Act (2009), any person, company or third party (such as HR and payroll officers or advisors) believed to be involved with or have reasonably known about a breach of the Act can be held responsible for it.
For example, a HR manager in charge of payroll realises that employees are being paid below the award rate. After informing their boss about the legal requirements to pay the correct amounts, the issue is ignored. While the HR manager was concerned about the underpayments and notified their boss about the contravention, they can still be found liable for continuing to participate in the wrongdoing.
So what steps can you take to avoid liability?
- Regular workplace “health checks”: Know your legal obligations and regularly check the minimum legislative and award/agreement requirements for the workplace to ensure you’re meeting your obligations.
- Act fast, keep records and seek advice: If you do suspect there is a breach of the Fair Work Act, act fast and make sure to keep a record of any action you take. If the issue is complicated, you may need to seek advice.
- Escalate the matter: Don’t let a breach continue once it has been detected. Notifying a senior manager about a known or suspected breach may not be enough to avoid liability. If the issue persists after notifying them, you may need to consider escalating the matter internally, externally and potentially resigning.
- Report to the Fair Work Ombudsman: Anyone involved with or aware of a persistent and ongoing breach should report it to the Fair Work Ombudsman to fulfil their statutory duty to ensure the Fair Work Act, Awards and Industrial Agreements are not contravened and avoid accessorial liability.
In a recent case similar to the scenario above, the Federal Court found the HR manager liable for their course of action in raising contraventions, being rebuffed and then continuing to participate in the wrongdoing for a considerable amount of time. They wanted to send a message that “an employee should indeed resign if that is the only alternative to continuing to participate knowingly in illegal activity, ideally coupled with reporting the conduct … to the Fair Work Ombudsman.”
For advice regarding accessorial liability and breaches of the Fair Work Act, please contact us on (08) 9316 9896 or firstname.lastname@example.org.