By James Allen (Lawyer) and Michael Cochrane (Senior Associate)
In May this year, the Federal Circuit Court ruled that an accounting firm (Ezy Accounting) which provided payroll services was liable (as an accessory) for breaches of the Fair Work Act 2009 committed by its client, a Japanese restaurant chain (click here to read our earlier post on the case). The case centred around Ezy Accounting’s involvement in the underpayments, for which both the employer and a director of the employer admitted liability.
Ezy Accounting argued that it simply followed instructions and processed the restaurant’s payroll. However, the Fair Work Ombudsman (FWO) led evidence that Ezy Accounting was aware of the relevant Award following an audit by the FWO and that it was aware that the flat rate it was processing for the employees was below the Award. Ezy Accounting failed to amend its MYOB system or to do anything to ensure that the employees of its client were paid at a higher rate in accordance with the Award.
Last week, the Federal Circuit Court ordered that Ezy Accounting pay a penalty of $53,880 for its involvement in underpayments made by its client.
The decision highlights the increasing focus that the FWO has on external advisors and the hefty penalties the Courts will impose on them if they are found accessorily liable for certain contraventions of the Fair Work Act 2009.
External advisors and companies (including accountants, payroll providers, franchisors and franchisees) need to be vigilant when involved in workplace matters and should act quickly in seeking independent advice if they become aware of any non-compliance by their clients.
You can read the full text of the decision here.
If you require assistance in understanding your obligations or have any other queries involving workplace issues, please contact Michael Cochrane.