Accessorial liability used to be a legal term largely confined to criminal law discussion, but it is now just as likely to crop up in workplace law as the Fair Work Ombudsman (FWO) steps up its compliance activities, targeting individual directors, managers, HR advisers, recruitment companies, labour hire operators and franchisees.
In a warning to those who would turn a blind eye to award breaches, underpayments and the like, the FWO has publicly advised that it is “adventurously testing the limits of accessorial liability provisions to ensure someone is held responsible for breaches of the Fair Work Act”.
And it has had important legal victories, including the successful prosecution of an employer for underpaying staff, where the court ordered the director to personally pay the employees the underpayments.
But the FWO has ventured much further than company directors. Over the last two years, accessories have included HR staff, administration staff, employees involved in recruitment and supervision of other staff and other companies or individuals involved through a supply chain or franchise network.
And in one case, the FWO has initiated proceedings against an accountancy firm which processed wage payments for restaurant staff, even though the firm knew the wages it was processing were sub par. The FWO has said it considers accountants’ professional responsibility “demands that they cannot close their eyes to breaches of the law by their clients”.
This development is a double-edged sword. Employers that observe the law benefit by an activist FWO because it targets unscrupulous competitors getting away with an illegal advantage. On the other hand, where an employer is lax in checking suppliers/contractors and perhaps labour hire companies they associate with, the FWO will now be more likely to say ‘you either did know, or you ought to have known’.
Employers who want to avoid accessorial liability need to know more about the employers they do business with, especially labour hire, but also, other employers in the supply chain. The availability of relevant workplace information and compliance resources is such that there aren’t too many excuses left to avoid the long arm of the law when breaches are discovered.
Some FWO cases: