'Ignorance is not a defence' – how HR can minimise personal liability risks

In June, a case before the federal court presented a timely warning to HR professionals: you can be held personally liable, and have penalties imposed upon you, under the Fair Work Act (FWA).

In the case, the HR manager was landed in hot water over a breach of the National Employment Standards (NES) after dismissing an employee with one month’s notice rather than the five weeks he was entitled to.

According to one expert, ignorance of the law is not an excuse.

“‘I was just doing my job’ has never been a satisfactory excuse for HR professionals to use,” said Mark Diserio, partner in the Lander & Rogers workplace relations and safety team.

“Ignorance of the law or claiming that you were just following orders is not – and never has been – a defence under the FWA,” he said.

“If you’re being directed to do something that you have concerns about or know is not right and you let it go, you’re putting yourself at risk.

“Anyone who finds themselves in this situation should not voice their concerns but ensure that they put them in writing to the person responsible for the direction, showing that they disagree.”

Accessorial liability

The FWA requires that an employer must not contravene a provision of the NES; a term of a modern award; a term of an enterprise agreement; an adverse action or discrimination provision; an unfair dismissal compensation order; or breach any other provisions, such as by failing to provide a payslip.

Under the FWA, these kinds of provisions are known as “civil remedy” provisions.

For each civil remedy provision, employees, organisations, inspectors and other specified people can bring a proceeding in court in relation to a contravention.

The FWA also states that “a person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision”.

A person is also involved if, and only if, they:

• have aided, abetted, counselled or procured the contravention
• have introduced the contravention, whether by threats or promises or otherwise
• have been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention
• Have conspired with others to effect the contravention

These are commonly known as the “accessorial liability” provisions of the FWA.

“Maximum fines for breaches since July have been $54,000 for a corporation and $10,800 for an individual, as well as possible orders for compensation resulting from the breach – generally this is pursued when the employer is in liquidation or impecunious,” said Diserio.

He shared his tips for minimising the risk of proceedings, which can involve both obvious and not-so-obvious actions, such as:

• Knowing and meeting your FWA obligations (remembering that ignorance of the law is not a defence)
• Performing regular workplace audits (‘health checks’) in your business to ensure minimum legislative and award or agreement obligations are being met, and requiring contractors to undertake the same in their businesses
• Seeking appropriate professional advice if in doubt
• Ensuring that relevant employees have appropriate training in the inherent FWA risks and how to deal with them
• Including appropriate provisions in agreements with contractors
• Raising issues in writing with managers and supervisors
• Considering appropriate insurance

Leading employment lawyers from around Australia will be sharing their experiences and advice with HR professionals at the upcoming Employment Law for HR Managers masterclass.

For more information or to make a booking, click here.