Liability for HR Managers – Being “involved” in Fair Work Act contraventions

July, 2015

By Clayton Payne

Human Resources managers have difficult roles to fulfil. Their job often involves a balancing act between ensuring the satisfaction of workers, while at the same time, ensuring that the employer’s best interests are served.

What happens if a decision is made by a human resources manager which, while potentially serving the employer’s bests interests, puts it in breach of its obligations under the Fair Work Act? While it is obvious that in most circumstances the employer might face liability, is the human resources manager also exposed?

Section 550 of the Fair Work Act provides that a “person” who is “involved” in a contravention of a civil remedy provision is taken to have contravened that provision.

This matter was recently examined by the Federal Circuit Court in Cerin v ACI Operations and Others.

The worker had been employed in a glass factory from 1996 until 2012. In 2009, he sustained a right shoulder injury at work, which led to him suffering from bilateral shoulder disabilities.

Ultimately, the worker’s employment was terminated by letter dated 12 October 2012 to take effect on 12 November 2012. This was due to the fact that, according to the employer, it was “unable to provide suitable employment due to (the worker’s) injury/incapacity”.

The worker argued that he should have been provided with the correct notice of the termination of his employment, in accordance with the Fair Work Act.

The employer argued that the employment ended as a result of frustration of contract.

Judge Simpson disagreed, finding not only that that the employer had contravened section 44 of the Fair Work Act by failing to give the worker five weeks’ notice, but that the human resources manager was also involved in this contravention.

The decision has been stood over to determine the penalty and other orders to be made. The initial findings suggest that the human resources manager could be subjected to a civil penalty order for being involved in the contravention. A breach of a civil penalty order can lead to an individual being ordered to pay up to $10,200 for each relevant breach.

Conclusion

Although it is yet to be determined whether the human resources manager in question will be subjected to a civil penalty order in this case, courts have made such orders in the past.

For example, in the case of Fair Work Ombudsman v. Centennial Financial Group, the Federal Magistrates Court (as it was then) ordered a civil penalty of $3,750 against a human resources manager who was involved with his employer in breaches of the Workplace Relations Act.

The Magistrate in that case also noted:

“the events at Centennial have had a chilling effect in (the human resource manager’s) career in human resources and … he has seen a significant decline in his income”.

Regardless of the eventual outcome in the Cerin case, this decision serves as a timely reminder to human resources managers that they need to take care, and potentially obtain legal advice, in circumstances where breaches of the Fair Work Act might arise.

Section 44 of the Fair Work Act provides that a contravention of a provision of the National Employment Standards is an offence giving rise to a civil penalty.

Therefore, in terms of the National Employment Standards, if a human resources manager is “involved” in an employer’s decision not to grant parental leave, or their failure to pay redundancy entitlements, for example, then they may face liability.

If a decision is made by an employer that potentially breaches a civil remedy provision, a prudent human resources manager should always attempt to advise as to the correct course of action, even if that advice is ultimately ignored. To do anything less potentially exposes the human resources manager to not only pecuniary penalties, but may also adversely impact upon their career.

Contact Mills Oakley

For more information, please contact:

Ross Levin | Partner
Melbourne
T: +61 3 9605 0070
E: rlevin@millsoakley.com.au

Malcolm Davis | Partner
Sydney
T: +61 2 8035 7932
E: mdavis@millsoakley.com.au

Adam Lunn | Partner
Melbourne
T: +61 3 9605 0868
E: alunn@millsoakley.com.au

Lisa Anaf | Partner
Melbourne
T: +61 3 9605 0857
E: lanaf@millsoakley.com.au

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