23 October 2021
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Accountants, bookkeepers and even employees need to be careful of section 550 of the Fair Work Act or they too could be prosecuted!

Danger: you could be an accessory under the Fair Work Act

David Bates
7 November 2018

Over the past fortnight, I’ve been fortunate to deliver presentations at a number of fantastic events around the country. Many of these conferences were attended by employers and their advisors, such as accountants, bookkeepers and HR professionals.

One topic that consistently came up was ‘accessorial liability’ under the Fair Work Act 2009. Alarmingly, not nearly enough is known about this extremely important topic.

Accessorial liability arises as a consequence of section 550 of the Fair Work Act, which is as follows:

Involvement in contravention treated in same way as actual contraventio

1. A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

2.  A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)  has aided, abetted, counselled or procured the contravention; or

(b) has induced the contravention, whether by threats or promises or otherwise; or

(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d) has conspired with others to effect the contravention.

These provisions mean any person who is ‘involved’ in a contravention of the Fair Work Act (including breaches of Modern Awards and Enterprise Agreements) can be held liable for those breaches as an ‘accessory’.

For example, an accountant who provides payroll services for a business owner, who is underpaying their employees, can be found liable for those underpayments as an accessory.

This is just one of countless scenarios where accessorial liability could arise. Given the breadth of the provisions, virtually anyone (including an internal employee), who provides HR or payroll services or advice to an employer, can be held liability as an accessory, even if they indirectly omit to do something!

The Fair Work Ombudsman (FWO) is increasingly relying on section 550 of the Fair Work Act when initiating prosecutions against employers. Both employers and their advisors need to know about this so that steps can be taken to minimise the risks.

Sadly, far too many people are only becoming aware of section 550 and its very serious consequences when it’s already far too late.

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