Many human resource professionals and managers are unaware that they can be held personally liable for contraventions of the civil remedy provisions of the Fair Work Act 2009 (‘FWA’) and that this can occur regardless of whether or not they were following directions. Under the accessorial liability provisions of the FWA, a person will be held liable for such contraventions if they are ‘involved in’ the contravention. They will be involved in the contravention if they have: aided, abetted, counselled or procured the contravention; or, have induced the contravention, whether by threats or promises or otherwise; or, have been in any way, by act or omission, directly or indirectly, knowingly concerned or a party to the contravention; or, have conspired with others to effect the contravention. The person does not need to know that the act or omission will contravene the FWA, they only need to know the ‘essential matters’ which make up the contravention.
While accessorial liability is nothing new, it has assumed a higher profile in recent years thanks to the significant expansion in civil remedy provisions which accompanied the FWA, the activist nature of the Fair Work Ombudsman (in more serious cases) and the case law which has resulted predominantly from the regulator’s work. The civil remedy provisions of the FWA include provisions requiring compliance with awards, enterprise agreements and the National Employment Standards, as well as prohibitions against sham arrangements and adverse actions. After years of debate, the issue of whether or not an individual held to have accessorial liability could be ordered to pay compensation (e.g. for underpayment of entitlements) has recently been resolved. It is now settled that an order for compensation can be made against a person involved in a contravention, not only the employer. This resulted from an action brought by an individual, not the FWO. Hitherto reluctant to pursue such orders against persons involved in a contravention, the FWO is now more likely to do so.
The price of looking the other way and hoping for the best or choosing not to be informed about the true state of the law or to comply with it can be very high. A person held to have accessorial liability not only faces the risk of an order for compensation and penalties, they can also experience significant damage to their professional reputation. If only for this reason, people who might otherwise find themselves involved in a contravention have a strong motive for using their influencing skills to ensure that contraventions of the FWA do not occur or, if they have, that they are promptly rectified.
Elizabeth Devine recently presented a paper on the topic of accessorial liability at a national employment law conference. If you would like a copy of this paper, please contact Elizabeth