Home' HR Monthly : November 2017 Contents 46
hile there is potential to make
mistakes with award classifications
for employees and wage payment
obligations, there is increasingly less tolerance
from the Fair Work Ombudsman (FWO)
regarding HR professionals and their liability
in underpayment cases.
The FWO is regularly using the accessorial
liability provision under the Fair Work Act
2009 to hold liable third parties (including
HR managers) involved in contraventions of
HR professionals should be aware of the
Fair Work Amendment (Protecting Vulnerable
Workers) bill 2017 which aims to strengthen
the FWO’s ability to investigate and penalise
serious instances of underpayment.
Accessorial liability recently played out in
an underpayments case: a decision handed
down by the Federal Circuit Court of Australia
found Ezy Accounting accessorily liable for
contraventions of a modern award by Japanese
food chain Blue Impression.
It was alleged that Blue Impression had
underpaid two Taiwanese employees on 417
working holiday visas by nearly $10,000
between September 2014 and April 2015. The
employees were paid a flat rate of $16.50, which
was below the minimum hourly rate and not
enough to cover penalty rates or loadings the
employees were entitled to under the award.
The contraventions also included a failure
to pay evening loading, Saturday and Sunday
loading, public holiday rates and a special
clothing allowance, and a failure to provide
rest or meal breaks.
Blue I mpression outsourced its payroll
operations to Ezy Accounting, which was
aware of the applicable rates of pay and
other employment entitlements owing to the
employees as it had been the contact point
between Blue Impression and the FWO when
underpayments were detected.
As such, the FWO successf ully argued that
there was a practical connection between Ezy
Accounting and the contraventions, and that it
should be held accessorily liable.
While in this case payroll provider Ezy
Accounting was found to be accessorily liable,
similar charges may just as easily be
levelled at HR.
The clear message: HR needs to ensure
the employer is using the correct award
classifications and paying correct entitlements.
HR needs to understand where the employer
may be caught out and engage advice where
appropriate to show it has taken reasonable
steps to find the correct wage classifications
and pay rates.
Such advice may need to include which
modern awards apply in the workplace and
which employees fit within the classifications
of those awards.
HR needs to be particularly careful around
overpaying staff as a way of hedging against
any potential underpayments.
Many employers pay their staff a salary
above the award minimum rate of pay yet are
caught out later because they have overlooked
certain entitlements, such as allowances,
penalty rates and loadings.
Employers need to understand they can set
the salary off against all award entitlements
only where the salary is more than the total
of each award entitlement and this is carefully
provided for in the employee’s employment
contract by way of a well drafted set-off clause.
HR managers must be mindful that the
FWO will not tolerate a failure to make
reasonable enquiries when assessing awards or
advising clients (including internal clients). •••
HR managers could be liable when
employees are underpaid.
BY ALISON BAKER PARTNER, HALL & WILCOX
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Lower staff turnover rate
A person with a vision impairment
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People with a disability are far less
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More days at work
People with a disability have lower
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Diversity = good business
A more diverse workforce will
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23/10/17 5:20 pm
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