Under the Fair Work Act 2009 (Cth) (FW Act), individuals who are “involved in” contraventions of civil remedy provisions can be held personally liable for employment decisions. Section 550 of the FW Act establishes the principle of accessorial liability, which holds individuals accountable for their involvement in breaches of workplace laws. This provision is derived from the law of criminal complicity and applies to those who intentionally participate in or assist with contraventions.
To establish accessorial liability under section 550, it must be proven that the individual:
- Had actual knowledge of the essential facts constituting the contravention.
- Was knowingly involved in the contravention, either by aiding, abetting, counselling, procuring, inducing, or conspiring with others to effect the contravention, or by being directly or indirectly knowingly concerned in the contravention.
The courts have clarified that the level of knowledge required for accessorial liability can vary. For example, in cases of underpayment, it may be sufficient to show that the individual was aware of suspicious circumstances and deliberately failed to investigate further, thereby maintaining a state of apparent ignorance. This is often referred to as “wilful blindness”.
The case of Fair Work Ombudsman v Priority Matters Pty Ltd highlights the application of section 550. The court found that individual respondents were directly or indirectly knowingly concerned in the contraventions of corporate employers, as they were actively involved in both the continuation of payments and the non-payments when they occurred. This case demonstrates that financial difficulty is not a justification for failing to comply with statutory obligations, and individuals can be held personally liable for their involvement in such breaches.
Similarly, in Brennan v Plumbing Services Australia Pty Ltd, the court emphasised that to establish accessorial liability, the individual must have knowledge of the essential facts constituting the contravention and must be a knowing participant. This case further illustrates the importance of proving a practical connection between the individual’s conduct and the contravention.
The recent case of Fair Work Ombudsman v Sushi Bay Pty Ltd (In Liq) (No 2) also sheds light on the concept of accessorial liability. The court explained that for an individual to be held liable as an accessory, they must have participated in the contravention to some degree and had knowledge of the essential elements of the contravention. The case also discussed the higher penalties applicable for “serious contraventions,” which require the accessory to have knowingly participated in deliberate and systematic breaches.
Therefore, personal liability under the FW Act is primarily governed by section 550, which imposes liability on individuals who are involved in contraventions of civil remedy provisions. This includes directors, officers, HR managers, and even external advisors, provided they have the requisite knowledge and involvement in the contravention. The courts have consistently applied this provision to ensure accountability for breaches of workplace laws, particularly in cases of underpayment and other significant contraventions.
Get in touch to discuss your options with our team.