Participants (such as Councils) within a labour supply chain may be held legally responsible if their principal contractors or subcontractors are not complying with the Fair Work legislation where it can be demonstrated that they had a role to play in those breaches of the law.
That is, it is not just employers who can be held liable for contraventions such as underpayments but also any persons knowingly involved in contraventions may also be found legally responsible. A range of accessories have been held liable in actions taken by the FWO including individuals (accountants, managers, directors, lawyers) or businesses involved in the supply chain. This is known as accessorial liability1
, and falls under section 550 [s550]
of the FW Act, which provides that a person who is ‘knowingly involved in’ a contravention of a civil remedy provision is taken to have contravened that provision, and is exposed to penalties and other orders flowing from that contravention. A person is ‘involved in’ a contravention if they:
- aided, abetted, counselled, procured or induced the contravention
- conspired with others to effect the contravention
- were in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention.
The FWO uses s550 to commence court proceedings against alleged ‘accessories’ to contraventions. The outcomes of FWO legal proceedings that resulted in penalties against directors in supply chains in industries such as cleaning2, security3 and trolley collection4 demonstrate the importance of ensuring there is full compliance with workplace laws at all levels. This includes maintaining an awareness of the supply chain and ensuring that measures are in place to avoid non-compliance. While it was reassuring that we did not find evidence of accessorial liability during the course of the Inquiry, it is important to note that all participants within any labour supply chain are exposed to potential legal proceedings if they ‘turn a blind eye’ to contraventions of the FW Act.
- What is accessorial liability page and FWO Guidance Note 1 – Litigation Policy on Our policies page
- Penalty against MCG head contractor over underpayments a "wake-up call" media release
- Court action over alleged underpayment of Sydney security guards media release
- $188,100 penalty for underpaying trolley pushers media release