Fair Work Ombudsman warns on 'accessorial liability'

The August newsletter from the Fair Work Ombudsman (FWO) draws attention to the issue of 'accessorial liability' under the Fair Work Act.

The FWO points out that they are prosecuting an increasing number of cases against parties who are alleged to have been 'involved' in a contravention of the act, even though they are not the employer.

The FWO draws attention to section 550 of the Fair Work Act which states:

Involvement in contravention treated in same way as actual contravention
(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.

In explaining their view of what this means for individuals, the FWO states:

Anyone who is found to be involved in a contravention of the Act can be personally liable for compensating employees and paying penalties imposed by the court. We have used this provision to hold company directors personally accountable for the actions of their companies. This effectively means that liquidating a company is no guarantee of avoiding the consequences of non-compliance with the Act.
But section 550 can extend to anyone involved in a contravention. This can include human resources and payroll officers, line managers, accountants and advisors.

The FWO also points out that there are broad implications for business that use 'outsourcing, franchise arrangements or complex supply chains', stating that, 'companies cannot outsource their non-compliance. For example if one company contracts another company to supply cleaning staff; and those cleaners are underpaid: both companies may be held accountable by a court.'

The FWO concedes that the 'full scope of section 550 in these types of arrangements has not been settled by the courts', but it seems clear that the FWO is determined to take action where it believes that a third party is involved in a contravention of the Act.

The FWO advises individuals, such as management teams, consultants and other advisers to ensure that they are aware of the applicable rules and follow them. Any advice given should be consistent with the Fair Work Act.

For companies involved in outsourcing, the FWO provides some resources to assist in reviewing compliance, including:

Truncated Fair Work Amendment Bill passes the Senate

The Fair Work Amendment Bill passed the Senate yesterday, but only after the Government agreed to amendments by the cross-bench senators that carved out large parts of the proposed reforms.

Proposed reforms relating to unions' right of entry, individual flexibility arrangements, leave arrangements and transfer of business arrangements were dropped. What is left of the Bill essentially deals with greenfields arrangements and the right to strike.

The new greenfields provisions will give the Fair Work Commission more power to arbitrate if unions and employers cannot reach agreement about the wages and conditions to apply on new projects. The restrictions on strikes will limit the ability of unions to take industrial action before genuine bargaining has commenced.

The amended Bill will now return to the House of Representatives where the Government has the numbers to ensure it is enacted.




Fair Work Commission clarifies definition of workplace bullying

A Full Bench of the Fair Work Commission has handed down a decision clarifying some aspects of the definition of workplace bullying.

Changes to the Fair Work legislation have made it possible for employees to apply to the Fair Work Commission for an order to stop bullying, where this occurs 'while the worker is at work'.

In a matter involving three employees who claimed they had been bullied at work, the Full Bench considered the meaning of 'at work' under s.789FF(1)(b)(i) of the Fair Work Act 2009. The case involved allegations that officials and/or delegates of the Maritime Union of Australia had engaged in bullying conduct towards the employees.

The employees argued that bullying occurs 'at work' if the conduct has a substantial connection to work. They said that the definition should be expansive enough to include the following behaviour:

  • conduct involving making social media postings that are visible to work colleagues;
  • conduct by work colleagues outside the workplace which is inconsistent with training undertaken by the employer and the exercise of authority assumed by the employer over those out-of-hours activities;
  • conduct by unionofficials or delegates in or outside the workplace under which they have assumed or sought to assume the function of controlling or dealing with workplace grievances; or
  • conduct by union officials or delegates in or outside the workplace by which they have expressed disapproval or censure, or sought to have others express disapproval or censure against the employees concerned.

The employer, the MUA and employer associations argued that conduct occurs while the worker is ‘at work’ if it occurs at 'any time that the worker is performing labour'. They submitted that conduct does not fall within this definition if:

  • the conduct is engaged in by person(s) who are not work colleagues and occurs outside the workplace;
  • the conduct occurs outside the workplace at a time when the employee is not undertaking work activities; and/or
  • the conduct occurs outside the workplace and is not related to the work being undertaken by the worker (for example, where the conduct occurs in the context of the employee's union membership).

The Full Bench rejected the employee's submission that conduct occurs ‘at work’ if it has ‘a substantial connection to work’, concluding that the legislation was intended to have a narrower application to that. In the decision, the Full Bench stated:

It seems to us that the concept of being ‘at work’ encompasses both the performance of work (at any time or location) and when the worker is engaged in some other activity which is authorised or permitted by their employer... (such as being on a meal break or accessing social media while performing work).

The Full Bench acknowledged the difficulties associated with the use of social media, noting in the decision:

[We reject the submission] that the worker would have to be ‘at work’ at the time the facebook posts were made. The relevant behaviour is not limited to the point in time when the comments are first posted on facebook. The behaviour continues for as long as the comments remain on facebook. It follows that the worker need not be ‘at work’ at the time the comments are posted, it would suffice if they accessed the comments later while ‘at work’ ...

We acknowledge that the meaning we have ascribed ... may give rise to some arbitrary results. A worker may only access comments on social media which constitute unreasonable behaviour ... at a time when they are not ‘at work’ and the behaviour will not fall within the scope of [the legislation]. But it seems to us that such a consequence necessarily follows from the fact that the legislature has adopted a definition which is intended to confine the operation of the substantive provisions.

An additional consideration arises in the context of unreasonable behaviour through the medium of social media. What is the position in respect of facebook posts which have no relevant workplace connection, eg posts from a former partner who has no workplace connection with ‘the worker’. If such posts constitute unreasonable behaviour and they are read by the worker while he or she is ‘at work’, do they fall within the scope of the definition in [the legislation] (assuming that they also create a risk to health and safety...)? We doubt that such an outcome was intended by the legislature having regard to the legislative context and the language of s.789FD [of the Fair Work Act].

The Full Bench foreshadowed further clarification of the definition in future cases , stating:

We do not think it appropriate to canvass the practical application of the definition of bullied at work beyond what we have already said. The application of the meaning of ‘at work’ in a particular case will depend on all the circumstances and it is appropriate that the jurisprudence develop on a case by case basis.


Fair Work Commission: [2014] FWCFB 9227 Bowker; Coombe; Zwarts v DP World Melbourne Limited T/A DP World; Maritime Union of Australia, The Victorian Branch and Others





This guide might help if an employee sues you for unpaid entitlements

The Fair Work Act provides a small claims mechanism for employees to pursue unpaid entitlements with a value of up to $20,000. This small claims process is quicker and more informal than regular court proceedings and also cheaper, given that the parties do not have to engage a lawyer. Indeed, permission is required to be represented by a lawyer in such a matter.

The court's approach in dealing with small claims aims for a quick and simple process with minimal expense to the parties. Matters are usually resolved with a single hearing.

While I always encourage clients to seek professional advice when matters are particularly complex or risky, most employers would be able to navigate the process successfully once they are aware of how things work and the court's requirements in terms of procedures and documentation.

The Fair Work Ombudsman has developed a Small Caims Guide, which provides the required information in a straightforward way. As well as the printed guide, the FWO has created a series of videos to explain the procedure.

Fortunately, most disputes are able to be resolved without going to court. But if you are confronted with a small claims matter, the FWO Guide should prove to be a useful resource.