HR Managers and Civil Penalties – Are you at Risk?

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As we discussed in a previous alert, decisions of courts such as the Federal Court of Australia and Federal Circuit Court show that not only can companies as employers be exposed to civil penalty liabilities for breaches of the Fair Work Act 2009 (Cth) (the Act), but this also can extend to individuals ‘involved’ in such breaches.

Human resources professionals in particular, are vulnerable to such orders being made against them, particularly if they do not attempt to advise their organisation of the possibility of a breach of the legislation.

This issue was recently examined in the Federal Circuit Court decision in Director of the Fair Work Building Industry Inspectorate v. Baulderstone and Others (No 2.).

Judge Manousaridis imposed pecuniary penalties on the employer and two of its human resources managers for breaches of the Act in 2010.

It was previously found that the employer through the two human resources managers (at the behest of another manager) required an employee to sign documents effecting his conversion from being a salaried employee to a wage earner.

It was found that the reasons for this included “as a substantial and operative factor” the fact that the employee was not a member of the relevant trade union.

The employee in question was told that the reason for the proposed change was that he could not perform the role of being a safety officer as a salaried employee.

The breach concerned the protections relating to industrial activities, set out in the general protections provisions of the Act.

In relation to the manager and the two human resources managers involved in the matter, his Honour found:

“There is no question these three employees were senior managers; and it is relevant that two of the three were employed in roles in which they were expected to know, or to make it their business to know, (the employer’s) obligations under the (Fair Work Act)”.

A civil penalty of $25,000 was imposed on the employer.

In relation to the actions of one of the human resources managers, his Honour found:

“Although (the human resources manager) had the choice of not implementing (the manager’s) decision, she may well have faced risks if she expressed disagreement with the decision or if she had refused to implement the decision. (The human resources manager), however, led no evidence on these matters”.

A similar finding was made in relation to the other human resources manager:

(The human resources manager) undertook the contravening conduct under the direction of (the manager). By itself, that would be a mitigating factor. (The human resources manager), however, has put on no evidence about whether he expressed any disagreement with (the manager’s) decision, and if he did, why he nevertheless carried out (the manager’s) decision”.

Civil penalties of $3,500 were imposed on each of the human resources managers.


Human resources professionals have a difficult role to fulfill, often in the context of balancing an employer’s expectations and priorities, with the legal realities of a situation.

What this decision demonstrates is that the courts consider that human resources professionals have a duty to be aware of their organisation’s legal obligations, and to provide advice to it on those matters.

Human resources professionals would be prudent to keep a record of any advice given by them, particularly if a contrary course of action is taken by their organisation.

For further information, please do not hesitate to contact us.

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