FWO imposes substantial penalties on accounting firm for record-keeping violations – Employee Rights/ Labour Relations

FWO secures penalties against accounting firm for
failing to produce a client’s employee records and
documents

The Fair Work Ombudsman (FWO) has secured a total of $137,435.00
in fines against La La Bar Group (La La Bar) and their former
accounting firm, Nicholas Accounting Management Services Pty Ltd
(Nicholas Accounting) for failing to comply with record-keeping
requirements in the Fair Work Act 2009 (the Act).

The FWO commenced legal action in the Federal Circuit Court
against the former director and former General Manager of six La La
Bar Group companies (which has since been liquidated and
deregistered), Nicholas Accounting and its director after the
parties failed to comply with a Notice to Produce records.

In response to allegations of non-compliance, a surprise audit
was conducted by Fair Work Inspectors in 2019. During the
investigation, Notices to Produce were issued to La La Bar and
Nicholas Accounting that were not complied with.

As a result of its investigation, the FWO discovered La La Bar
had not kept records of the hours worked by casual or irregular
part-time employees worked. The FWO alleged that La La Bar breached
section 535 of the Act by failing to make and keep proper employee
records.

Section 712(1) of the Act provides that a Fair Work Inspector
may require a person to produce a record or document by serving a
Notice to Produce. A person served with a Notice to Produce must
not fail to comply with the notice in accordance with section
712(3) of the Act.

During proceedings, Nicholas Accounting admitted to contravening
section 712(3) of the Act by failing to comply with the Notice to
Produce In determining the appropriate penalty, Nicholas Accounting
argued that there was no loss or damage arising from its failure to
comply as the documents sought to be produced did not exist. It
also argued that it was not authorised to provide the documents.
These arguments were rejected by the Court given the FWO’s
surprise audit resulted in the seizure of documents that should
have been provided in response to the Notice to Produce.

The FWO submitted that Nicholas Accounting and La La Bar’s
conduct was a deliberate attempt to undermine the FWO’s ability
to investigate breaches of the Act, such as the record-keeping
contraventions, and referred to the “considerable public
resources” expended by the FWO in preparing the matter for
hearing.

The Court held that there was a need to specifically deter the
parties from similar future conduct, noting their apparent lack of
remorse and failure to take any corrective action and imposed
penalties of:

• $41,368.00 against Keri Taiaroa, a former director and
  shareholder of six La La Bar Group companies;




• $26,893.00 against Matthew Sanger, former general manager of
  six La La Bar Group companies;




• $34,020.00 against Nicholas Accounting; and




• $35,154.00 against Nicholas Accounting director Nicholas
  Nicolaou.

In a statement delivered to the court, FWO Anna Booth said that
employers “need to be aware that breaching record-keeping laws
and failing to comply with lawful requests like Notices to Produce,
which were found to be deliberate in this matter, will not be
tolerated and risk significant penalties”.

This case emphasises the FWO’s willingness to take
enforcement action against professional services firms where it is
believed they have been involved in breaches of workplace laws or
where they fail to comply with the FWO during an investigation.

You can read the court’s decision in its entirety at this link.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.