Can you afford a hit to your wallet?

HR personnel and directors risk fines of up to $12,600 per breach if they are found in breach of the Fair Work Act 2009.

The Fair Work Ombudsman (FWO) has successfully advocating in court for directors and HR managers to be held personally liable and fined for breaches of the FW Act.

Fair Work Ombudsman v Centennial Financial Services was the FWO’s first successful prosecution involving an HR manager.

The HR manager had been requested by the owner of the company to terminate all employees and bring them back on as contractors, creating sham contracting arrangements resulting in under payments of $39,533 for nine employees.

The HR manager was unsuccessful in his argument to the Federal Magistrates Court that he should not be held accountable for his actions as he was following the instructions of the owner.

He said that his position as HR manager was only a title and he did not have any control over the decision making.

He also argued he should not be fined as the high-profile case had already ruined his professional reputation, leaving him without employment despite applying for “thousands” of jobs.

Federal Magistrate Robert Cameron disagreed, concluding that the HR manager was involved in the decision and should have sought advice as he had a responsibility to ensure his actions were in line with the FW Act.

The HR manager was fined $3750 while the company director was fined a total of $13,200 for nine breaches.

The willingness of the FWO to prosecute individuals as well as companies has led the way for the Fair Work Building Industry Inspectorate (FWBC) to do the same.

In Director of the Fair Work Building Industry Inspectorate v Baulderstone Pty Ltd & Ors the FWBC also sought to enforce fines for two HR managers in an adverse action case.

Upon resigning his CFMEU membership, the employee was forced to sign a document removing him of his entitlements under his contract of employment and placing him onto an enterprise agreement.

The Federal Circuit Court found that the company had deliberately breached s346 of the FW Act, protecting the employee from adverse action due to membership of a union.

The HR managers tried to argue that they were not aware of the provisions of s346 and were following instructions directed by the company. Judge Nicholas Manousaridis found that while the HR managers did not conceal their actions, they did conceal the reasons for their actions which amounted to the breach.

He further commented that the HR managers had the choice of not implementing the changes and educating the business on the breaches, which they did not do.

Judge Nicholas Manousaridis fined both HR managers $3500 each.

HR managers and directors need to be aware of the provisions of the FW Act and their responsibilities when carrying out work on behalf of the company to avoid being fined.

CCI has created the Employers Guide to the Fair Work Act which contains extensive case law and commentary to help employers interpret complex legislation.

The Guide also includes case studies and examples to illustrate how sections of the FW Act should be implemented.

This guide is a must have for all businesses.

►Protect yourself and your business — purchase CCI’s Employer’s Guide to the Fair Work Act here.

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