Follow The Rules
Follow the rules
As lawyers, we are not only expected to know the law, but to follow it too. This includes the employment law and applicable minimums specified by the Fair Work Act 2009 (Cth), writes DANNY KING.
We know the usual red flags when it comes to employment law compliance; avoid unpaid internships and make sure no one is paid below the minimum wage.
What is perhaps more surprising is that accessorial liability can extend to the actions we take, as lawyers, for our clients.
What is the law?
The legislation to be aware of is s500 of the FWA that essentially extends liability of FWA breaches to all people involved, beyond just the employing entity. In 2017, the Fair Work Commission got serious and upped all penalty provisions 10-fold:
Corporations face a $63,000 penalty for an ordinary breach and a $630,000 penalty for a serious contravention. For individuals, the fines are $12,600 for an ordinary breach and $126,000 for a serious contravention.
Penalties are cumulative , and in a lot of cases are significantly in excess of the actual compensation ordered. It is possible for penalties to be paid to the applicant, making it an attractive litigation proposition in otherwise low-value claims.
How has the law been applied?
Recent decisions highlight the significance of accessorial liability to our actions as practitioners:
- Professional advisers (in this case example, accountants) are liable as accessories even where appropriate advice was provided, and the client elected not to follow that advice (as a failure to ensure compliance as "wilful blindness"): FWO v Blue Impressions Pty Ltd & Ors  FCCA 810 at 
- Accessories are, where the Court specifically orders, unable to be indemnified by any other person (such as a client, employer or industrial organisation) for the payment of penalties: ABCC v CFMEU  HCA 3
- Where the employer is for some reason unable to make the compensation payments ordered, one or more accessories can be personally made to pay the compensation in addition to their own penalties: FWO v Step Ahead Security Services Pty Ltd & Anor  FCCA 1482
What does this mean for solicitors?
Taken together, the three cases can combine to potentially expose lawyers not only to penalties for failing to ensure their clients followed their own advice to comply with the law (without the ability to seek an indemnity from the client), but also in extreme cases to be potentially exposed to the compensation owed by their clients.
Finally, we all have liability as employers and managers of staff within our own firms. This includes liability for penalties, and even to pay any underpaid amounts personally (including by piercing the corporate veil), even when we are not the actual owners of the firm.
What do we recommend?
- Get your own house in order. Make sure all staff you have, and manage (including where you are also an employee) are paid at least their minimum entitlements.
- Pro-actively seek comfort that your clients are already meeting minimum obligations to their own staff.
- Where you recommend changes be made to get a client into a compliant state, actually go the next step of checking that they have followed your advice.
- If in doubt, refer to your friendly employment lawyer - who will scare everyone into compliance.
Danny King heads up Danny King Legal, a team of approachable, expert employment lawyers who know how to get it right. Visit dannykinglegal.com for more information.