Accountants getting caught out under liability clauses

Accountants have been warned not to give employment advice beyond their means as accessorial liability provisions can see advisers prosecuted for their clients’ contraventions.

Brisbane law firm Cooper Grace Ward recently ran an Adviser Training Day to discuss the liability of advisers for clients’ employment issues.

Cooper Grace Ward workplace relations and safety partner Belinda Winter told Accountants Daily that advisers can be held liable for breaches of employment law by their employer clients.

“There hasn't been a change to the law. The manner in which it’s been applied appears to have broadened,” Ms Winter said.

“How it works is under the Fair Work Act – there are accessorial liability provisions that say if a person is involved in a contravention of certain civil penalty provisions, then that person is also taken to have contravened that civil penalty provision.”

While this can apply to all advisers, Ms Winter said accountants need to be particularly careful.

“Accountants are often employers' first port of call when it comes to a lot of employment-related matters, like the engagement of workers, whether they be employees or contractors, how they pay them and what award, calculating their termination pay or calculating entitlements,” she said.

“Importantly, if the accountant does that and it's wrong, and they're involved in a contravention which breaches the law, even if they don't know it's a breach of the law, they could still be caught and be personally liable.”

According to Ms Winter this is an issue that is already catching accountants out, with some finding themselves being prosecuted.

“Recently the Fair Work Ombudsman commenced a prosecution against an accounting firm, where they provided payroll services to their client and in the course of providing payroll services, underpaid their client's employees,” she said.

“The Fair Work Ombudsman is not only prosecuting the employer, but is also prosecuting the accounting firm for being involved in the contravention of underpayment for employees.”

The solution, according to Ms Winter, is that accountants should build a strong referral network so that they can send their clients to an employment law expert for that advice.

“The issue is that employment law is very complex and for accountants, that's not their core business. Their core business is obviously accounting, and they should stick to their core business,” she said.

“They should refer their clients to a lawyer to get advice about employment matters, rather than having a go themselves, because the risk to themselves personally is just not worth it.

 

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