Costly Warning to Accessories

In April 2017, the Federal Circuit Court found accountancy firm Ezy Accounting 123 Pty Ltd liable for its involvements in a number of contraventions of the Fair Work Act 2009 (Cth) (‘Act’) (refer our previous legal alert by clicking here).

The Court has now imposed a total penalty of $53,880.00 (15% of the maximum penalty) on Ezy Accounting for its involvement in the contraventions, which is payable to the Commonwealth within 45 days.[1]

When determining the appropriate penalty, the Court highlighted Ezy Accounting’s obligation to ensure compliance with the Act and that it must place legal obligations ahead of its business interests with the employer:

• ‘Ezy was involved in a relationship with the first respondent where it provided payroll services. As such it must put compliance with the law ahead of business interests. Ezy had a responsibility to ensure there was compliance with, inter alia, the FW Act. Where, as here Ezy had been found, through Mr Lau, to be knowingly involved in conduct that constitutes illegality this is a circumstance of aggravation[2]‘

The decision requires accountants, those providing payroll services and other relevant third parties to carefully consider whether they are complying with the Act, in particular, the payment of minimum wages, loadings and overtime.

Recent decisions, including this matter, indicate that those ‘involved in’ contraventions (as an individual or corporation) will face costly penalties if prosecuted by the Fair Work Ombudsman.

Employers should also be aware that contraventions are becoming more costly. The monetary penalty unit associated with contravening a civil remedy provision has increased to $210.00 per unit.[3] The maximum penalty per contravention of the Act is 60 penalty units ($12,600.00) for an individual and 300 penalty units ($63,000.00) for a body corporate.

Additionally, the recent Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 has introduced “serious contraventions” of the Act where a person has knowingly contravened a provision as part of a systematic pattern of conduct. The maximum penalty per serious contravention of the Act is 600 penalty units ($126,000.00) for an individual and 3,000 penalty units ($630,000.00) for a body corporate.