Workplace liability: When can HR be held responsible?


When it comes to workplace liability, HR practitioners need to keep their eyes and ears open, warns the Fair Work Ombudsman. Because as new policies take effect, anyone involved can be held accountable for misconduct.

Advisors have a tough job: balancing the desires of CEOs and Boards to achieve organisational objectives; managing risks and workplace liability; and then getting these messages to the right people at the right place and time.

This responsibility is not to be taken lightly, says Fair Work Ombudsman Natalie James, who spoke to a group of HR managers and practitioners at an event recently. In her speech at a networking forum hosted by the Australian Human Resources Institute (AHRI), James stressed the importance of due diligence when it comes to their roles as advisors.

Human resources professionals could be held personally liable for breaches of workplace laws by their employer, she warned. Non-compliance with federal workplace laws has become a “cultural norm,” she says,

“You need to constantly balance a number of elements: your professional and ethical responsibilities; the organisation to help it achieve its strategic goals; the need to broker solutions and not raise problems,” she says. “But above all, you must explain the rules to your clients and make it clear when they are in danger of breaking them.”

In the case of workplace laws, any individuals involved in facilitating a breach of the law can be held personally liable as an accessory. Provisions extending workplace liability for contraventions of the law to people ‘involved’ have been in place for more than a decade. Citing a host of recent cases brought before the Fair Work Ombudsman, James used her position and insight to show just how serious this issue is.

In the past financial year, 92 per cent of cases the Ombudsman filed in court sought orders against an accessory, she says, and this is up from 72 per cent the year before that. She went on to say that the Fair Work Ombudsman will not sit idly by and let violations go un-checked. Therefore, it is up to human resources practitioners to be vigilant.

“If any of you have ever had trouble persuading your board or your CEO of the merits of your advice, I’m here to give you a new pitch: Compliance with workplace law is not simply a question of tick and flick,” she told attendees. “You can find yourself personally liable for the actions or inactions you help the company take.”

Think big picture

Recent policy changes have strengthened the Fair Work Ombudsman’s compliance and enforcement powers. The organisation can now compel employers and other witnesses to produce information or answer questions regarding cases.

The government has also indicated it intends to increase penalties to 10 times what they are now for employers who breach employment laws.

If regulators find exploitation or evidence of unsavoury practices in the workplace, she says it’s now standard to examine up the supply chain to see who else is involved.

That’s why a culture of compliance is so important to fend off any workplace liability grey areas, says James.

“If it’s sitting at the green light end of a risk matrix, you may want to consider what assurance you have put in place, not just with respect to the company’s own workers, but with respect to its labour supply chains,” she says. “Who’s emptying the bins or staffing the counter downstairs? Are you sure they are being paid correctly?

“We are hopeful that employers will accept that ultimately it is their responsibility under the law to do the right thing.”

HR professionals need to think beyond the legal risks as well. Brand and reputation are just as important, James says. “The community expects businesses to take responsibility for its labour, regardless of where strict legal liability begins and ends.”

AHRI financial professional members are automatically protected by AHRI ProCover insurance. The cover provides a limit of $5,000,000 for any one claim and $10,000,000 in the aggregate. See the policy for conditions applying to consultant members. Learn more about this exclusive benefit, click here.

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Workplace liability: When can HR be held responsible?


When it comes to workplace liability, HR practitioners need to keep their eyes and ears open, warns the Fair Work Ombudsman. Because as new policies take effect, anyone involved can be held accountable for misconduct.

Advisors have a tough job: balancing the desires of CEOs and Boards to achieve organisational objectives; managing risks and workplace liability; and then getting these messages to the right people at the right place and time.

This responsibility is not to be taken lightly, says Fair Work Ombudsman Natalie James, who spoke to a group of HR managers and practitioners at an event recently. In her speech at a networking forum hosted by the Australian Human Resources Institute (AHRI), James stressed the importance of due diligence when it comes to their roles as advisors.

Human resources professionals could be held personally liable for breaches of workplace laws by their employer, she warned. Non-compliance with federal workplace laws has become a “cultural norm,” she says,

“You need to constantly balance a number of elements: your professional and ethical responsibilities; the organisation to help it achieve its strategic goals; the need to broker solutions and not raise problems,” she says. “But above all, you must explain the rules to your clients and make it clear when they are in danger of breaking them.”

In the case of workplace laws, any individuals involved in facilitating a breach of the law can be held personally liable as an accessory. Provisions extending workplace liability for contraventions of the law to people ‘involved’ have been in place for more than a decade. Citing a host of recent cases brought before the Fair Work Ombudsman, James used her position and insight to show just how serious this issue is.

In the past financial year, 92 per cent of cases the Ombudsman filed in court sought orders against an accessory, she says, and this is up from 72 per cent the year before that. She went on to say that the Fair Work Ombudsman will not sit idly by and let violations go un-checked. Therefore, it is up to human resources practitioners to be vigilant.

“If any of you have ever had trouble persuading your board or your CEO of the merits of your advice, I’m here to give you a new pitch: Compliance with workplace law is not simply a question of tick and flick,” she told attendees. “You can find yourself personally liable for the actions or inactions you help the company take.”

Think big picture

Recent policy changes have strengthened the Fair Work Ombudsman’s compliance and enforcement powers. The organisation can now compel employers and other witnesses to produce information or answer questions regarding cases.

The government has also indicated it intends to increase penalties to 10 times what they are now for employers who breach employment laws.

If regulators find exploitation or evidence of unsavoury practices in the workplace, she says it’s now standard to examine up the supply chain to see who else is involved.

That’s why a culture of compliance is so important to fend off any workplace liability grey areas, says James.

“If it’s sitting at the green light end of a risk matrix, you may want to consider what assurance you have put in place, not just with respect to the company’s own workers, but with respect to its labour supply chains,” she says. “Who’s emptying the bins or staffing the counter downstairs? Are you sure they are being paid correctly?

“We are hopeful that employers will accept that ultimately it is their responsibility under the law to do the right thing.”

HR professionals need to think beyond the legal risks as well. Brand and reputation are just as important, James says. “The community expects businesses to take responsibility for its labour, regardless of where strict legal liability begins and ends.”

AHRI financial professional members are automatically protected by AHRI ProCover insurance. The cover provides a limit of $5,000,000 for any one claim and $10,000,000 in the aggregate. See the policy for conditions applying to consultant members. Learn more about this exclusive benefit, click here.

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