Human Resources Managers, Business Managers, Financial
Controllers and CFOs... be on alert.
On Friday, 27 May 2016, the Fair Work Ombudsman Natalie James
delivered a speech to the Australian Labour and Employment
Relations Association National Conference. During her speech, Ms
James spoke about the FWO's increasing focus on accessorial
"We are pushing the boundaries of the
accessorial liability provisions contained in the FW Act. This is
how Coles ended up in court. So far this financial year nearly
every matter we have filed in court— 94% in fact—has
also roped in an accessory.
We are increasingly pursuing a broader
range of accessories, including accountants and human resources
The previous day, the FWO issued a media release which
identified that the FWO and the Australian Securities and
Investment Commission would jointly audit 50 businesses in Brisbane
by a randomly selected spot check, with the FWO Inspectors
focusing, in particular, on correct payment of wages, penalty
rates, allowances, loadings, provision of appropriate meal breaks
and compliance with record-keeping and payslip obligations.
Failure to pay leave loading on termination payments
What are the consequences of an accessorial liability
There are a number of monetary and non-monetary consequences for
reputational damage – if a claim if brought against you,
you will be a named respondent to the litigation
monetary penalty – the Fair Work Act provides for
personal monetary penalties of up to $10,800 per breach for
individuals (and these are set to increase significantly
Ms James also noted in her speech that the FWO is pursuing a
broader range of orders from the courts, against persons involved
in a contravention of workplace laws, including:
"Orders that accessories personally repay
wages to workers
Freezing orders to prevent businesses and
accessories transferring assets, and
Injunctions to prevent a person from contravening
the FW Act in the future, exposing them to contempt of court if
they fail to comply."
Over the last few years, we have seen a wide range in the
monetary penalties imposed against non-director accessories:
a Business Manager was ordered to pay a penalty of $5,940 for
underpayment breaches relating to minimum wages, allowances etc
(where sham contracting arrangements had been used by the
an Employee Development Manager was ordered to pay a penalty of
$1,020 for underpayment of notice of termination (by 2 days!)
a payroll officer was ordered to pay a total penalty of $14,652
for underpayment of monetary entitlements under a modern award
(where the business had been paying employees a flat rate)
an OHS Manager was ordered to pay penalties totalling $3,750
for impermissible changes to employees contracts (from permanent
employment to commission-only contractors)
What can you do to protect yourself, and your
Pro-active monitoring to ensure your business is compliant with
its current obligations under the Fair Work Act is a must, and
an employment contract review – are there any pre-Fair
Work Act contracts or policies floating around your business?
a compliance audit – do you know which award applies to
your employees, and whether you are meeting all the obligations in
a random spot check – if you use a flat rate wage in your
business, have you undertaken annual spot checks to ensure the
employee is receiving at least their minimum monetary entitlements
under any relevant award or enterprise agreement?
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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