FW Act Small Claims – Individuals Beware

The Federal Circuit and Family Court of Australia (the Court) has ruled that individuals, not just employers, can be joined as individual respondents in small claims cases commenced under the Fair Work Act 2009 (Cth) (FW Act).

Under the FW Act, workers can make applications to recover underpaid wages and entitlements in the amount of up to $20,000 in the small claims division of the Court.

In terms of accessorial liability, s 550 of the FW Act provides that “a person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision”. This means that if a corporate employer is found to have a breached a civil remedy provision of the FW Act, then an individual involved in the contravention is taken to have also contravened the provision and may be personally liable for a pecuniary penalty. These individuals can include officers, senior managers, HR managers etc.

Until now, the legal precedent was that individuals could not be named in small claims cases. However, in the case of Alvarez Nino v Kuksal [2022] FedCFamC2G 401, the Court has overturned this. This means that individuals may now be named as individual respondents to small claims cases, and potentially found personally liable for the alleged contraventions.

The Nino Case involves allegations from 8 international students that they were unpaid or underpaid for work that included cleaning, housekeeping and other duties related to accommodation. The case remains before the Court and is listed for final hearing on 4-5 July 2022.