12 Sep Accessorial Liability under the Fair Work Act and Australian Consumer Law
Accessorial liability has become a critical issue for business owners, company directors, and senior executives in Australia. Increasingly, regulators are extending enforcement beyond the direct employer or company. Individuals are becoming personally accountable for involvement in workplace breaches or consumer law contraventions.
A court can find a person to be an accessory under:
1. the Fair Work Act 2009 (Cth) (FW Act); or
2. Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL).
An accessory must be “involved” in another party’s contravention (section 550(1) of the FW Act; section 236(1) of the ACL).
Accessorial Liability under the Fair Work Act
A person is involved in a contravention if they are “knowingly concerned in”, or party to, the contravention.
The knowledge required to become an accessory is more than mere awareness. It requires engaging in conduct that demonstrates implication or involvement in the contravention (Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87 at [227]).
The conduct in question does not need to bring about the contravention. A person may say or agree to do, or omit to say or do, something which associates them with the conduct constituting the contravention (Amcor Packaging (Aust) Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Australia [2006] FCA 1265 at [15]).
Accordingly, being a knowing participant in a contravention does not require a person to have engaged in all essential elements of the contravention (Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College) (No 3) [2021] FCA 737; 154 ACSR 472 at [103]–[108]).
Therefore, proving that a person is an accessory to a contravention of the FW Act does not require positive proof of each element of the relevant contravention (Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 3) [2023] FCA 201 at [267]).
Please see more on contraventions for underpayments, general protections, unfair dismissal and sex discrimination.
Accessorial Liability under the Australian Consumer Law
The definition of “involved” under the ACL also includes being “knowingly concerned in”, or party to, a contravention.
The issue of involvement in a contravention of the ACL was recently considered in Productivity Partners Pty Ltd v Australian Competition and Consumer Commission; Wills v Australian Competition and Consumer Commission [2024] HCA 27 (Productivity Partners).
The decision in Productivity Partners provides that a person will be knowingly concerned in a contravention if:
1. the person intentionally participates in conduct that implicates or involves them in the primary contravention; and
2. the person has knowledge of the essential matters making up the contravening conduct. This could include facts, circumstances, or states of mind.
Further, an accessory need not know the contravener’s conduct would contravene the law.
Please see more on contraventions for misleading and deceptive conduct and false and misleading representations.
Conclusion
The implications of accessorial liability are significant and can lead to financial penalties and reputational damage.
Decision-makers within a business must be vigilant to avoid being “knowingly concerned” in unlawful conduct. This includes directors, HR managers, payroll officers, and even those in the supply chain.