HR managers at risk - the rise of personal liability

On Wednesday, 16 March 2016 Frazer Jones in conjunction with Hall & Wilcox Lawyers hosted breakfast for Sydney-based HR professionals to explore the growing trend of HR managers being personally fined in connection with breaches of employment laws by the company that employs them.

In one such case, a HR manager was fined more than $1,000 for her involvement in an employee receiving notice of termination that was two days short of his NES entitlement. (The company was fined more than $20,000.)

In another case, a HR manager who assisted a managing director to convert sales employees into contractors, in breach of sham contractor laws, was held personally liable and fined $3,750. In that case, the court rejected the HR manager’s arguments that:

  • he was only following directions; and
  • that he did not know that what he was doing was unlawful.

Under the Fair Work Act 2009, any person who is ‘knowingly involved’ or a party to a breach of the legislation can be held liable as an ‘accessory’ to the breach and personally fined or made the subject of other orders of the court. To be ‘knowingly involved’ requires that the person:

  • participated in the acts that constituted the breach; and
  • was aware of the essential facts.
  • It is not necessary that the person knew that what they were doing was unlawful. It is also no defence that they were ‘doing what they were told’.

While all managers (and potentially others) are at risk of being found to be an ‘accessory’ in these cases, HR managers have a greater exposure because they are more likely to be involved in matters governed by employment laws.

To minimise the risks of personal liability, HR managers can:

  • keep up-to-date on the law;
  • consider the legality of what they have been asked to do;
  • raise questions or concerns about legal issues – and seek advice where appropriate;
  • attempt to advise the company on how to comply with the relevant laws.

The seminar was presented by Keryn Tredwell, a Partner in Hall & Wilcox’s Employment team. Kerryn has specialised in employment and industrial relations law for more than 15 years, providing strategic and practical advice to Australian and international corporate clients across a broad spectrum of industries.

For more information on our event series or our recruitment services, please call 02 9236 9090 and speak to one of our specialist consultants.