Liability of Accounting Form for Contraventions Confirmed

The Full Bench of the Federal Court has upheld a decision of a single judge of the Federal Circuit Court to financially penalise an accounting firm, EZY Accounting 123 Pty Ltd, which failed to ensure its client, Blue Impression Pty Ltd, paid its employees correctly under the applicable modern award.

Refresh – the Decision at first instance

Last November it was decided for the first time that an accountancy firm was penalised by a Court under the Fair Work Act’s accessorial liability provisions.

The Fair Work Ombudsman identified that Blue Impression, who ran a Japanese fast food chain, was not complying with the applicable modern award. Blue Impression engaged EZY Accounting to assist it to rectify these contraventions. Instead of rectifying them the contraventions continued, which was brought to the Fair Work Ombudsman’s attention by an employee of Blue Impression.

Blue Impression admitted the contraventions and was fined $115,706.25. EZY Accounting denied any liability. It argued that its role was simply to enter data provided by its client but this was still held to be “involvement in” a total of seven contraventions, as if EZY Accounting had breached the Act itself. The contraventions included Blue Impression’s failure to provide employees:

• the correct minimum rates of pay;
• the clothing allowance;
• the correct evening, weekend and public holiday loadings; and
• rest and meal breaks.

EZY Accounting was fined $53,880 for its role in these contraventions.

The appeal

EZY Accounting appealed this decision to the Full Bench of the Federal Court. While the Court reduced the penalty to $51,330 on the Fair Work Ombudsman’s recommendation, it otherwise upheld the first instance decision.

EZY Accounting was ‘knowingly concerned’ in the contraventions which was “unsurprising” given “the acceptance of the fact that the amounts paid to employees was less than the base rate of pay.”

For the full judgment see: Ezy Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134 (20 August 2018)