Assessorial liability – are you at risk?

Assessorial liability, what is it? And why should you be concerned about it?

To begin, a liability means being legally responsible for a wrong doing. Employers can be liable when they are found to not be following workplace laws, as well as being responsible for fixing wrong doings like underpayments or paying employee entitlements such as annual leave and sick leave.

Assessorial liability is where a person involved in a contravention of workplace law is treated the same way as the employer responsible for the contravention. Section 550 of the Fair Work Act 2009 (Cth) provides that a person who is ‘knowingly involved in’ a contravention is taken to have contravened that provision and is exposed to penalties and other orders flowing from that contravention. This means you can be ordered by a court to pay employee’s unpaid wages entitlements, and penalties for being involved in the contravention. 

Being involved in a contravention means the individual or company:

• assisted, recommended or caused the contravention
• influenced the contravention (by making threats or promises)
• was knowingly concerned in or was a party to the contravention, or 
• conspired with others, which resulted in the contravention. 

A person or company can include a:

• practice director
• practice manager or other manager
• payroll officer
• accountant 

The case between the Fair Work Ombudsman v Al Hilfi [2016] is a great example of assessorial liability. This case involved three employees from a company who subcontracted trolley collection services to supermarkets who were held vicariously liable for contravention due to failing to do the following:

• pay minimum weekly wages performed during ordinary hours
• paying appropriate penalty rates (weekend penalty rates, public holidays and overtime)
• pay casual loading to one employee
• make superannuation contributions
• inform three employees about the terms of their engagement
• pay annual leave entitlements
• provide employees with payslips, and
• make and keep accurate time and attendance records.

Two out of the three persons who were held vicariously liable were required to individually pay $49,500 in penalties. The third person was required to pay $59,400 in penalties. Since this case the implementation of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 has been introduced which sees an increase in penalties for serious contraventions of workplace law.

This further proves how important it is for practice owners and their managerial staff to understand what their responsibilities are within their roles as well as their employee’s entitlements for all employment statuses. 
You can contact us via phone on (07) 3872 2222 and through email support at workplacerelations@amaq.com.au.