An accounting firm has failed to convince the Full Federal Court to overturn a finding that it was “involved in” its client’s breaches of workplace laws and was therefore itself taken to have contravened the relevant sections of the Fair Work Act 2009 (Cth).

Last year we kept you up to date with the Fair Work Ombudsman’s prosecution of an accounting firm for its role in a client’s breach of workplace laws.

Our first article on the case outlined how the Federal Circuit Court found tax and accounting firm Ezy Accounting 123 Pty Ltd (Ezy) accessorily liable for various contraventions of the Fair Work Act 2009 (Cth) (FW Act) relating to the underpayment of an employee of its Japanese fast food client. You can read the original article about the accounting firm’s liability here.

Our second article outlined the Court’s penalty decision, and explained the factors considered most relevant to the determination of Ezy’s pecuniary penalty of $53,880. You can read our article on the penalty decision here.

Ezy appealed the decision of the Federal Circuit Court to the Full Federal Court. The appeal was dismissed in a judgment handed down on 20 August 2018.

Decision of the Full Federal Court on appeal

On appeal to the Full Federal Court, Ezy contended that there was no basis upon which it could be found to have been “involved in” its client’s contraventions of the FW Act. It was submitted, on behalf of Ezy, that there was no evidence to support a number of findings made against Mr Lau, the sole director and “operative mind” of Ezy and, therefore, it was not open to the Court to find that Mr Lau knew, as a matter of inference, that his client was underpaying employees and not meeting the requirements of the relevant award.

However, the Full Federal Court agreed with the findings of the primary Judge that Mr Lau was “knowingly concerned” in the contravening conduct of its client because he:

  1. had some knowledge of the award that applied to his client’s employees;
  2. was involved in an audit of his client’s employment practices and had communicated with a workplace advisor about his client’s obligations, and therefore knew the base rate of pay under the relevant award and that the award provided for weekend loadings and a special clothing allowance; and
  3. knew that his client was underpaying its employees because he was aware that the flat rates in Ezy’s payroll system were not sufficient to allow its client to comply with its obligations under the award.

In fact, the Full Federal Court described the primary Judge’s findings “unsurprising” and “open to him” given Mr Lau’s knowledge of the payroll system and relevant award requirements.

Business advisors must remain vigilant

The Full Federal Court’s decision that the primary Judge was correct in concluding that Ezy satisfied the criteria in the FW Act, and was therefore “involved in” the contraventions of its client, act as a further reminder to business advisors that they are not immune to prosecution by the Fair Work Ombudsman.

Business advisors should continue to determine whether the work they perform for a client could facilitate a breach of the client’s obligations under workplace laws, rendering the advisor an accessory to any contravention of the FW Act.

The receipt of instructions that indicate a breach of workplace laws by a client should always be considered carefully. If in doubt about your client’s obligations, you should seek your own specialised advice from, or refer your client to, an employment lawyer.