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.

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Western Australia moves a (small) step closer to a national health and safety system

The Western Australian Government has said that a version of the national model Work Health and Safety  legislation will be introduced in draft form in the current session of Parliament.

Commerce Minister Hon Michael Mischin MLC says that a 'green bill' will be introduced and will be open for public comment until the end of the year. The Minister's statement follows the publication of a regulatory impact statement on the model WHS Regulations.

Harmonisation of Australia's health and safety legislation has been on the agenda for many years, and it seems reasonably evident that having separate legislation in different states is neither efficient nor does it necessarily result in better safety outcomes.

While the state and commonwealth governments have got as far as establishing a tripartite body -- Safe Work Australia -- to oversight national co-ordination and have developed a national model act and regulations, to date only New South Wales, Queensland, the Territories and the Commonwealth have implemented the model Work Health and Safety Act.

This means that firms operating in Western Australia as well as other jurisdictions must still comply with multiple regulatory systems.

From the information available at this time, it does not appear that Western Australia is about to embrace a completely national approach. The Minister's statement to Parliament indicates that the Government is not convinced of the benefits of uniformity, and commits only to  'develop a version of the model WHS legislation that is tailored to Western Australia’s environment.'

Further information about the Ministerial Statement and the Regulatory Impact Statement is available on the WorkSafe WA website.