The Fair Work Ombudsman has commenced proceedings in the Federal Circuit of Australia against accounting firm EZY Accounting 123 alleging that it was involved in the underpayment of wages by one of its clients.

The accounting firm acted for Blue Impressions Pty Limited and provided payroll services for that company. The Fair Work Ombudsman has alleged that two of Blue Impressions’ clients were underpaid almost $10,000.

The Fair Work Ombudsman has alleged that EZY Accounting 123 knew that the rates being paid to Blue Impressions’ employees were below the minimum rates and that in the circumstances EZy Accounting 123 was involved in the contraventions.

Section 450 of the Fair Work Act provides that a third party can be subject to penalties under the Act if the party is “involved in” a contravention of the Act. Being “involved in”  a contravention means;

1.  aiding, abetting, counseling or procuring contravention;
2.  inducing the contravention, whether by threats or promises or otherwise;
3. being by act or omission, directly or indirectly, knowingly concerned in or a party to the contravention; or
4. conspiring with others to effect the contravention.

The potential effect on EZY Accounting 123 is significant. Each underpayment constitutes a contravention under the Act and a penalty of up to $51,000 applies for each contravention.

This appears to be the first time a the Fair Work Ombudsman has initiated a prosecution against accountants in respect of a contravention by their clients and there is no reason to suppose this will be the only time.

For more information contact ERA Legal.