Not so EZY: Accountants held liable for client’s underpayments

3 December 2018

The decision by the FFC highlights the breadth of the accessory liability provisions under the Act.
The decision by the FFC highlights the breadth of the accessory liability provisions under the Act.

The Full Federal Court (FFC) in EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134 has upheld a decision to fine an accounting firm that provided payroll assistance to its client, resulting in the underpayment of staff. The employer admitted to breaching the Fair Work Act 2009 (Cth) (the Act), and the accounting firm was held to be liable as an accessory to the contravention.

The decision highlights the breadth of the accessory liability provisions under the Act, and serves as a cautionary tale for accounting and HR advisory firms that perform payroll and audit functions.


In 2014 Blue Impression Pty Ltd (Blue Impression) was found to have contravened the Act by breaching the Fast Food Services Award (Award), which resulted in two employees being underpaid a combined total of $9,549. Blue Impression engaged EZY Accounting 123 Pty Ltd (EZY Accounting) to rectify the contraventions discovered by the Fair Work Ombudsman (FWO), however further contraventions transpired.

The FWO commenced proceedings against Blue Impression, and in an agency first, pursued action against an advisory accounting firm, EZY Accounting, for knowingly being “involved in” the contraventions.

At first instance, Blue Impression admitted to underpaying its employees, while EZY Accounting denied being an accessory to the contraventions.

Accessory liability

Section 550 of the Act states that a person who is “involved in” a contravention of a civil remedy provision is taken to have breached that provision. This “accessory” will be liable if the person:

  • has aided, abetted, counselled or procured the contravention; or
  • has induced the contravention, whether by threats or promises or otherwise; or
  • has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
  • has conspired with others to effect the contravention.

Decision at first instance

The matter was initially heard in the Federal Circuit Court. The primary judge found that Mr Lau, a director of EZY Accounting, had knowledge of the Award and contraventions, and this was sufficient to find that EZY Accounting was “involved in” the contraventions.

Decision on appeal

On appeal to the FFC, it was found that EZY Accounting was “knowingly concerned” in or party to the contravention of the Act, and therefore sufficiently involved because, through Mr Lau:

  • It knew that the employees were covered by a modern award that provided for the minimum pay rates for ordinary working hours, as well as, penalty rates and allowances;
  • It knew the pay rates of the employees because EZY Accounting provided payroll services and processed wage payments for Blue Impression; and
  • It knew that these pay rates failed to meet the minimum rates of pay set by the Award.

Further, it was also found that EZY Accounting had a “practical connection” to the contraventions because, in processing Blue Impression’s payroll, it facilitated the underpayments made.

The Federal Court has ordered that EZY Accounting pay a pecuniary penalty of $51,330.


This case reinforces that the FWO are willing to look beyond an employer when assessing liability for failing to comply with minimum entitlements. HR professionals, accountants and legal advisors should consider their personal exposure when providing advice about minimum legal obligations.

How we can help

Where an advisor becomes aware of a client’s non-compliance with minimum entitlements, they should communicate these concerns to the client and, if the issues are not rectified, consider whether to cease their involvement with the contravening parties.

For more information, or if you would like to speak to a member of our workplace relations team, please contact our Practice Leader, Skye Rose on (03) 9843 2100, or fill out the enquiry form below.

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