A Melbourne accounting firm is being prosecuted by the Fair Work Ombudsman (FWO) for its alleged involvement in the underpayment of two Taiwanese backpackers working for one of its clients, who operated a fast-food outlet.

The accounting firm provided payroll services for its client.

According to the FWO, the workers were paid a flat rate of $16.50 an hour, which was below the minimum hourly rate payable to the workers under the Fast Food Industry Award 2010 (Award). The workers were also not paid a casual loading or penalty rates when they worked on weekends, evenings and on public holidays. In just a little over 6 months, this resulted in an alleged underpayment of $9,549.

Relevantly, the company had previously been audited by the FWO as part of its 2014 National Hospitality Campaign and found to have underpaid its workers. At that time, the accounting firm had assisted the company to calculate and rectify the wage underpayments.

The FWO has brought proceedings against the accounting firm alleging that it provided its payroll services to the client knowing that the rates being paid were well below the minimum rates payable under the Award.

This is the first time the FWO has initiated proceedings against an accountant for being “involved” in a contravention of the Fair Work Act 2009. The “accessorial liability” provisions in the Act provide that a person is “involved” in a contravention if they have:

• aided, abetted, counselled or procured the contravention;
• induced the contravention, whether by threats, promises or otherwise;
• been in any way, by act or omission, directly or indirectly, “knowingly concerned in” or party to the contravention; or
• conspired with others to effect the contravention.

The accessorial liability provisions have been increasingly used to target directors and managers within a company but have only once previously been used to target a third party involved in a breach of workplace laws.

In a statement released by the Ombudsman, Natalie James, she indicated that the FWO had been concerned about the role of key advisors, like accountants and HR professionals, in “serious and deliberate contraventions” for some time. She further said that “in situations where we believe accountants and other professionals knowingly facilitate contraventions of workplace laws, we are prepared to hold them to account.”

The accounting firm faces a potential penalty of up to $54,000 for each contravention. The company and its operations manager are also being prosecuted in relation to the alleged breaches.

For Accountants and other HR advisory firms seeking assistance with award payments and any other workplace matters, please contact:

Louise Houlihan
Principal
03 9611 0144
lhoulihan@sladen.com.au

Rohan Kux
Special Counsel
03 9611 0107
rkux@sladen.com.au

Jane McKay
Senior Associate
03 9611 0155
jmckay@sladen.com.au

Joanna Bandara
Associate
03 9611 0196
jbandara@sladen.com.au