Accounting firm facing court for alleged involvement in underpaying two backpackers –Smart Company

By Alan J. McDonald

Legal action has commenced against an accounting firm for its alleged involvement in the underpayment of two foreign workers. McDonald Murholme Principal lawyer Andrew Jewell discusses the implications for businesses offering legal advice to SMEs.

See below article for further details.

Accounting firm facing court for alleged involvement in underpaying two backpackers – The Smart Company

For the first time the Fair Work Ombudsman has commenced legal action against an accounting firm for its alleged involvement in the underpayment of two backpackers employed by one of its clients.

This is a broader move by the Fair Work Ombudsman to hold key advisors accountable for giving bad advice or deliberately assisting companies to contravene workplace law.

Victorian accounting firm EZY Accounting 123 provided payroll services to Blue Impression Pty Ltd, the operator of Japanese fast food outlet Hanaichi QV in the QV shopping centre in Melbourne’s CBD.

The Fair Work Ombudsman alleges two Taiwanese employees on 417 working holiday visas were underpaid $9549 while working at the store between September 2014 and April 2015.

Both in their 20s, the workers were allegedly paid $16.50 an hour, which is below the minimum hourly rate and excludes penalties and casual loadings stipulated in the Fast Food Industry Award.

The workers were also not provided with appropriate meal and rest breaks, according to the Ombudsman.

The Fair Work Ombudsman alleges EZY Accounting 123 processed wage payments for both workers while knowing the rates they were being paid were well below the lawful minimum.

Blue Impression was audited in 2014 and had been previously put on notice after being found to have underpaid 12 employees $8800.

In a statement the Fair Work Ombudsman said EZY Accounting 123 was apprised of minimum Award rates at the time of the audit, as the accounting firm assisted the company to calculate and rectify the $8800 in wage underpayments.

Ezy Accounting 123 and Blue Impression each face court penalties of up to $51,000 per contravention.

Blue Impression operations manager Sze Teng Wong is also facing court, with potential penalties up to $10,200 per breach.

Andrew Jewell, principal lawyer at McDonald Murholme told SmartCompany the outcome of this case will have implications for businesses offering professional advice to SMEs.

He says it will be interesting to see how the judge determines “involvement” as a broad definition could have big consequences for professionals like lawyers and accountants who give advice to clients.

“I think this would be causing a fair bit of nervousness for accountants and lawyers everywhere,” he says.

Jewell says the message from the Fair Work Ombudsman is for these service providers to give high-quality professional advice to SMEs.

However, small businesses owners should also be doing everything they can to understand their responsibilities to their workers.

“It is important to have knowledge of the relevant award or agreement and to get up to date advice and entitlements because minimum pay rates change every year generally,” Jewell says.

“I’d say to go to a lawyer not necessarily an accountant.”

Fair Work Ombudsman Natalie James said in a statement the Ombudsman is concerned about the role key advisors can play in workplace contraventions.

“We have been concerned about the role of key advisers, such as accountants and HR professionals, in some serious and deliberate contraventions,” she said.

“Small business relies heavily on trusted advisers, and if they give incorrect or bad advice, or deliberately assist with the contravention, should they not be held accountable? In situations where we believe accountants or other professionals knowingly facilitate contraventions of workplace laws, we are prepared to hold them to account.”

SmartCompany contacted Ezy Accounting 123 but the company declined to comment as the case is ongoing.

SmartCompany were unable to contact Blue Impression Pty Ltd or Hanaichi QV prior to publication.

Reference: Accounting firm facing court for alleged involvement in underpaying two backpacker, The Smart Company, 22^th February 2016.