Accessorial liability and advisers: wanting to do the right thing is not enough
Speaking at a recent Lander & Rogers briefing, Fair Work Ombudsman Natalie James warned employers that wanting to do the right thing is not enough. "Employers need to take tangible action on an ongoing basis to ensure they are paying the right rates and keeping appropriate records to demonstrate this," she said.
Ms James was speaking to employers and HR professionals about the Fair Work Ombudsman's approach to accessorial liability.
Australia's Fair Work Act contains a set of provisions known as the "accessorial liability" provisions, which are very broad and which extend responsibility for breaches of the Act by a business to others who are 'involved'. For example, advisers to a business, such as Directors & Officers, HR professionals and accountants.
Daniel Proietto, Head of Workplace Relations & Safety at Lander & Rogers, said that "Of the matters filed by the Fair Work Ombudsman in the last financial year, 92% involved accessories. Not only do directors, executives and advisers (both internal and external) need to be conscious of their employment obligations, but businesses which have franchising or extensive contracting arrangements in place need to ensure that those actually doing the work are properly remunerated."
Ms James said that checking the rules was more important than ever. "We have been saying for some time that some businesses that choose to outsource certain work or seek to expand their brands’ reach— through contracting or franchising arrangements for example—need to consider their moral and ethical responsibilities with respect to their supply chains and networks.
"As you may have heard, the Fair Work Ombudsman has been making the most of the accessorial liability provisions in the Fair Work Act for some years now… We use accessorial liability to reinforce the critical roles and responsibilities of the key personnel involved in the breach—whether they are company directors or advisers, such as accountants or HR advisers, or other entities benefiting from the labour."
Partner Neil Napper said that, "Employers and their advisers need to be aware of their obligations, not just under the Fair Work Act, but also under awards or industrial agreements. Ignorance of the law or wilful blindness is not a defence."