Liabilities For Board Members Under The Fair Work Act

One of the legacies of the WorkChoices era is a well resourced and bureaucratically motivated workplace “cop on the beat” – the Fair Work Ombudsman.

The combination of a regulator with a brief to maintain a tough public profile, the financial resources to back that up and supportive legislation has had the practical result of creating a new range of personal liabilities for directors and board members.

Traditionally, an employer was liable for the conduct of its board or senior managers towards its employees, whether the employer was a private company, not for profit association or a government agency. Individual members of the Board or senior managers were answerable to the organisation for conduct which might put the organisation in breach of its workplace obligations, but those individuals were generally not liable themselves.

Under the Fair Work Act, however, any individual “involved in a contravention” by an employer is treated as if he or she had personally breached the Act. The people most often “involved” are the board members or directors who made the decision resulting in the breach. Fines of up to $6000 for each individual breach by a board member can be imposed.

To view the full Better Boards article, click here.

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