The role of accountants and bookkeepers has been in particular focus following this month’s Court decision holding an accounting practice responsible for underpayments by a client for whom it was providing payroll services. The decision follows a series of prosecutions and decisions in which principal contractors, franchisers, and human resources professionals have been found to be legally “involved” in breaches by an employer of the Fair Work Act and therefore liable for penalties and compensation.
Natalie James, the Fair Work Ombudsman, has been unequivocal that the FWO has and will continue to adventurously test the limits of the accessorial liability provision in the Fair Work Act. The FWO’s drive to bring accessories within the scope of prosecutions is, in part, because many of the employers they prosecute are no longer solvent. Speaking in July last year, Ms James reported that in the 2015/16 financial year 92% of prosecutions brought by the FWO included accessorial liability.
The recent Court decision in Fair Work Ombudsman v Blue Impression Pty Ltd & Ors  FCCA 810, involved a firm of accountants who provided payroll services for a takeaway food outlet in Melbourne. The Court’s findings included that:
The approach of the FWO and the Court decision have been surprising and troubling for many advisors. Professional advisors are trained to focus primarily on the interests of their client. The law is now, however, that advisors (particularly where they are providing outsourced payroll services) also have significant obligations to their client’s employees.
- The firm’s principal knew that the Fair Work Ombudsman had previously audited the business and there had been previous underpayments.
- The firm was issuing pay slips for employees and so knew that a flat rate was being paid for all work regardless of when the hours were worked.
- Despite these “suspicious” circumstances, the principal did not make any further enquiries regarding whether the Award obligations had been met and allowed his staff to simply continue to process the pays.
- In finding that, at the very least, the principal was guilty of ‘wilful blindness’, the Court noted that he was a CPA and an experienced businessman and could easily have found information regarding the proper Award rates from a variety of sources if he had chosen to do so.