In June we provided an update on the first time a professional services firm was found to be accessorily liable for contraventions of a modern award by its client.
As you may recall, Ezy Accounting 123 Pty Ltd (Ezy Accounting) provided payroll services to Blue Impression Pty Ltd (Blue Impression) and denied liability for its involvement in the underpayment of two employees. Judge O’Sullivan of the Federal Circuit Court of Australia rejected Ezy Accounting’s arguments and found it had the requisite knowledge to be accessorily liable for Blue Impression’s award contraventions.
In the judgment handed down last month, Judge O’Sullivan imposed a penalty of $115,706.25 (25% of the maximum) on Blue Impression and $53,880 (15% of the maximum) on Ezy Accounting.
In coming to this decision, Judge O’Sullivan first considered whether the contraventions were separate breaches, a course of conduct or a group of contraventions. In deciding each of the seven contraventions was separate, Ezy Accounting, as an accessory, was exposed to a total penalty of $357,000.
Judge O’Sullivan then considered the following relevant factors in relation to Ezy Accounting’s penalty:
- that the conduct involved contraventions of the most fundamental minimum standards, which was made worse due to the employees being on working holiday visas
- the involvement of Ezy Accounting’s senior management in the contraventions
- that Ezy Accounting was not an employee of Blue Impression and therefore was not subject to its direction. Rather, it provided payroll services and therefore must put compliance with the law ahead of its own business interests and
- that there needed to be some degree of general deterrence to the wider public, given the very high number of complaints and cases involving the fast food industry.
In coming to this conclusion, Judge O’Sullivan was content that the penalties are ‘set at a level so that such conduct is not to be regarded as an acceptable cost of doing business.’