Accounting firm found guilty of involvement in underpayment of a client’s workers

Accounting firm found guilty of involvement in underpayment of a client’s workers. Don’t do it! Contact Progressive Legal today!

If you are a bookkeeper or an accounting firm who helps clients with payroll – read on!

In April 2017, the Federal Circuit Court in Melbourne found that an accountancy firm, Ezy Accounting 123 Pty Ltd (Ezy), was guilty of being an accessory to the underpayment of workers at a Japanese fast-food chain.

So… what happened?

Firstly, ccording to their website, Ezy “… offers a full range of accounting and migration services that are designed to be simple, effective and affordable.”

In this particular case, Ezy provided payroll services for Blue Impression Pty Ltd (the operator of Japanese fast food joint “Hanaichi” in Melbourne’s QVB building.

Then, the FWO received a tip off that workers were underpaid and carried out an investigation. The investigation extended beyond just the employer and involved an investigation of Ezy who were advising on pay rates.

Investigations by the FWP revealed that Ezy had allegedly put through two payroll wage payments for workers knowing that the rates were below the minimum amount contained in the Fast Food Industry Award 2010.

In fact, the rates paid to the workers did not take into account various applicable loadings and penalties, including public holidays, night shift etc. And, the workers were not provided the required meal and rest breaks.

The knowledge of the minimum award rates and the processed underpayments were the key issue for Ezy. Despite the very same employer being subject to an audit in 2014, in which Ezy was involved at that time.

Accounting firm found guilty of involvement in underpayment of a client’s workers. Don’t do it! Contact Progressive Legal today!

How serious is the Fair Work Ombudsman?

Very. Indeed, the FWO has been scrutinising third parties for some time now.

The press quoted Natalie James from the FWO saying:

“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.”

What is the penalty?

Despite the guilty verdict, penalties are to hand down. However, Ezy and the employer each face penalties of up to $51,000 per breach.  

What is the bottom line?

Above all, accountants need to be careful they do not give advice on workplace relations matters that require interpretation. It’s the case for delving into award rates and the like. If they do so, they must do so with their eyes wide open. Knowing that if they get it wrong, or turn a blind eye to an underpayment, they may suffer a similar fate to Ezy.

Finally, accountants should feel comfortable to say, yes, we can process your payroll. But we will not do so if we know there is a break of workplace laws (i.e. an underpayment) occurring.  

Contact us today if you require any assistance with Workplace Law.

(c) Progressive Legal Pty Ltd – All legal rights reserved (2020)

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