Accountants now liable for Fair Work breaches made by clients

In a landmark case in 2017, the Fair Work Ombudsman pursued legal action against an accountant being ‘knowingly involved’ in the workplace breaches of his client. While the accountant was facing penalties up to $357,000 as though he committed the breaches himself, on appeal the penalty was brought down to $51,330. Even with the reduction, this is not a position you want to find yourself in!

Fair Work Ombudsman v Blue Impression Pty Ltd

On 28 April 2017, the Federal Circuit Court handed down its judgement in Fair Work Ombudsman v Blue Impression Pty Ltd. The judgment held that an accountant who processed payroll for a business was as an accessory to breaches of the Fair Work Act 2009 (Cth).

Blue Impression ran Japanese restaurants in Melbourne, which employed workers under the Fast Food Industry Award 2010. Ezy Accounting 123 Pty Ltd was the accountant for the business, and took Excel spreadsheets prepared by the business and input them into MYOB for the processing of payroll.

The Fair Work Ombudsman investigated the restaurants and found breaches of the Award, including breaches relating to minimum hourly rates, evening loading, Saturday and Sunday loading, public holiday penalty rates, rest and meal breaks, and a special clothing allowance.
In 2016, the Ombudsman commenced proceedings against Blue Impression in the Federal Circuit Court, for contraventions of the Fair Work Act 2009 (Cth). However, the Ombudsman then included Ezy Accounting, as a defendant to the proceedings, on the basis the accountant was an accessory to these breaches (and should also be responsible for the breaches).

At the time, the Fair Work Ombudsman itself noted that: “It is the first time the Agency has initiated proceedings against an accountant for allegedly knowingly being involved in contraventions of workplace law.”

The Ombudsman sought to apply s 550 of the Fair Work Act 2009 (Cth) which operates to make someone liable for a contravention they did not do themselves, if they were “involved” by helping it happen or being “knowingly concerned in” the contravention.

The accountant argued he was not involved in the breaches of the Award because employment law is outside of his professional expertise and the scope of his work for the business. The accountant also argued that he had no actual knowledge the breaches were happening (“I did not hire the relevant employees, and I did not know how long they worked”). However, the Court said that none of this mattered.

The Court decided, the accountant does not need to have expertise in employment law, and it is not acceptable to say that it was not his job to check this. The Court held that the accountant did have actual knowledge the breaches were happening (and was wilfully blind to them) because the accountant had been previously told the payroll system was underpaying employees, and he did not change this (which would inevitably lead to underpayments continuing). The Court ignored the accountant’s argument that his client told him not to change the payroll system, and that the accountant did not have authority to change it.

In the end, the Court found the accountant’s firm liable for the breaches of the Award under s 550 of the Fair Work Act 2009 (Cth), as though the accountant had done them himself.

So what does this case mean?

The Blue Impression case shows that an accountant can be held liable for the workplace breaches committed by its clients.

It is not enough for an accountant to say that workplace law is outside of their area of expertise, or that they are only performing data entry.
The Court found that the accountant had “actual knowledge” of the workplace breaches on relatively scant evidence, and it was no excuse for the accountant to say he did not have the power to change the payroll system.

What can accountants do to minimise this risk?

We recommend that your standard terms of engagement with your clients include a clear disclaimer of what you are doing and what you are not doing. Your engagement terms should also provide an undertaking from your client that they will comply with all laws relevant to the areas you are assisting them with, including their workplace requirements – and that your client will release and indemnify you if you are ever held liable for their workplace breaches.

Obviously, the best defence is to make sure your clients are meeting all their legal obligations, including providing entitlements to their employees under the relevant Award or the National Employment Standards. If you have any doubts that your client is not meeting their legal obligations – then based on this decision, you must cease to act for them. Otherwise you may be held liable as an accessory to their breaches. It is that simple.

How we can help

Andreyev Lawyers can help you prepare your standard terms of engagement to address the clear risks highlighted by the Blue Impression case. We can also assist your clients ensure they are meeting their requirements under employment law.

Call us now on 1300 654 590 or email us to discuss these important issues.


The information contained in this post is current at the date of editing – 26 July 2023.

Our Great Lawyer Guarantee

We want to be part of your team over the long term. We'll achieve this by sticking closely to the following principles:

  • We'll listen carefully to understand what you want to achieve. Then we'll thoroughly explain our advice and step you through the documents. You can be sure you'll know the full consequences.
  • Our lawyers work as a team, so someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.
  • One of our key goals is to pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.
  • We only do what we're good at. You can be confident that we know what we're doing and won't pass on the cost of our learning.
  • For advice and documents, we provide a fixed or capped quote so you don’t take price risk. If you're in a dispute, we'll map out the process and costs so you know what to expect.
  • We're not in this game for our egos. We're in it for a front row seat to witness your success.

We measure our success on how efficiently we have facilitated your objectives, enhanced your relationships, and reduced the level of stress for all involved.

If we sound like people you can work with, call us now on 1300 654 590 and speak directly with a great lawyer.

6 steps to a successful redundancy

6 steps to a successful redundancy

Redundancies come with a unique set of rules that must be followed carefully. Failing to do so puts employers at risk of facing an unfair dismissal claim from their employees. Get informed and protect your business by following these steps.

read more