Not as Ezy as 1,2,3 – Accountant found to have breached the Fair Work Act
If you're an accountant or professional adviser, take note. The recent decision in Fair Work Ombudsman v Blue Impression Pty Ltd & Ors  FCCA 810 has put accountants and professional advisers on notice that they too can be found liable for their clients' breaches of the Fair Work Act 2009 (Cth) (FW Act).
In a case described by the Fair Work Ombudsman as "the first time the agency has initiated proceedings against an accountant for allegedly knowingly being involved in contraventions of workplace law," Judge John O'Sullivan found Melbourne accounting firm EZY Accounting 123 Pty Limited (EZY Accounting) liable as an accessory for the underpayment of award-related entitlements of certain employees at a business to which it provided payroll services - Blue Impression Pty Limited (Blue Impression). In other words, the Federal Circuit Court found that EZY Accounting, together with its client, had contravened the relevant modern award.
EZY Accounting argued that it was not liable for Blue Impression's breaches, including because:
- EZY Accounting had no knowledge of the underpayments;
- EZY Accounting had no knowledge of the terms of the relevant modern award;
- EZY Accounting's role as a service provider was limited to certain bookkeeping services and data entry; and
- Blue Impression's compliance with the law was otherwise outside EZY Accounting's professional expertise and the scope of EZY Accounting's engagement.
Despite the arguments put forward by EZY Accounting, the Court found that:
- EZY Accounting was well aware of the minimum payment obligations of Blue Impression and that EZY Accounting's MYOB payroll system was underpaying Blue Impression employees, including because of a separate Fair Work Ombudsman audit of Blue Impression in 2014; and
- by failing to make inquiries and by persisting with the MYOB payroll system that had provided for incorrect award rates of pay, EZY Accounting had engaged in "willful blindness" and had "deliberately shut its eyes" to the issue of underpaying employees.
The Court is yet to make a determination on the penalties to be handed down. EZY Accounting could face fines of up to $54,000 per contravention, while individuals within EZY Accounting could face fines of up to $10,800 per contravention.
- This case is one of a number of cases evidencing the Fair Work Ombudsman's recent crackdown on third party accessories, such as professional advisers, who may be involved in the underpayment of their clients' employees.
- Professional advisers must ensure they remain up-to-date with changes in workplace law, including to the FW Act and the modern award.
- Professional advisers can no longer put their head in the sand and argue that workplace law is outside their expertise and that they only perform data entry roles.
How we can help
If you're an accountant or professional adviser, we can provide you and your clients with advice in relation to compliance with the FW Act and any relevant modern award.
P: 9394 1090 | E: firstname.lastname@example.org
P: 9394 1048 | E: email@example.com
P: 9394 1033 | E: firstname.lastname@example.org
- Charity and Not-for-Profit Organisation
- Competition and Consumer Law
- Compliance and Corporate Governance
- Corporate and Commercial
- Dispute Resolution
- Elder Law
- Estate Planning
- Insolvency, Bankruptcy and Restructuring
- Intellectual Property
- Personal Property Securities Act
- Workplace Relations and Safety
Commitment-Phobe or Flexi-Free? Choosing the perfect match in a Fair Work World, plus #MeToo – the latest from the Courts in Sexual Harassment Claims
We will navigate the options in light of recent court and Fair Work Commission decisions on casual employment. In particular, we will take a look at how recent court decisions have characterised casual employment and we will also discuss the inception of automatic conversion clauses, which shift casual employees to permanent employment and with limited rights to refuse the change.
The festive season is fast approaching and at a time where the #MeToo movement has put sexual harassment laws and its prevention at the front and centre of public debate. We will also take a look at some recent court developments in sexual harassment claims and discuss what you can do to ensure your business takes steps to protect employees from sexual harassment at work.Read More
Modern families are becoming more complex in their structure and dynamic. As a result, there has been a steady increase in estate litigation, in particular, claims against estates by family members seeking further provision. It is therefore important to review your estate plan to ensure these complexities are addressed and to ensure, where possible, the risk of litigation is mitigated.Read More