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The workplace regulator has fired warning shots at accounting firms, after a firm was penalised $53,880 in a first for the regulator’s use of accessorial liability laws.
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‘Clear message’ to accounting firms with first-of-its-kind penalty
20 November 2017
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9 minute read
As reported earlier this year, Victorian accounting firm Ezy Accounting 123 was hit with the penalty after the Federal Circuit Court found it facilitated underpayments by its client, fast food operator Blue Impression.
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In a statement released last week, the regulator said “trusted advisers” will be targeted where they are knowingly involved in the exploitation of workers.
“The accessorial liability laws extend not only to culpable in-house managers at businesses that exploit their employees, but also to external advisers who facilitate the underpayment of workers,” said Acting Fair Work Ombudsman Kristen Hannah.
“The Courts have made it clear that if you are knowingly involved in the exploitation of workers, you can face significant penalties,” said Ms Hannah.
“These types of trusted advisers must explain the rules to their clients, make it clear when they are in danger of breaking them and not become involved in breaches of the law themselves,” Ms Hannah said.
Ezy Accounting 123 provided payroll services for Blue Impression and processed wage payments for one of the two underpaid workers at the Hanaichi QV outlet, knowing it was below lawful minimums.
In relation to the underpaid worker, Ezy Accounting 123 submitted in Court that the worker was not its employee, and did not exploit the employee in its work.
“Ezy was involved in a relationship with (Blue Impression) 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,” the judge said.
This parallels warnings from the Institute of Certified Bookkeepers (ICB), who said professionals can't "turn a blind eye" to the suspect work of their clients.
“In the case of EZY Accounting 123, those accountants who turned a blind eye to the ongoing situation, the Fair Work Ombudsman said 'that is not good enough, you actually knew about this and you turned a blind eye," said Chris McComb, ICB technical support manager.
“Alert your clients to possible breaches. We understand that that's actually a difficult thing but because you're there, don't assume your client will go 'oh that was all my fault',” she added.
“If the Fair Work Ombudsman came in, they'll go, ‘she did the bookkeeping’, so we're just trying to keep you safe and keep you well informed about what's going on in the industry.”
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