Human Resources professionals are often at the heart of an organisation, with deep visibility across operations, resolving issues as they arise and helping ensure the business functions effectively. However in some work place’s HR managers are often pulled from their core jobs to have a more formative role on how the business in run by assisting with decisions of strategy, risk, and guiding executive action, where such power can lead to greater legal exposure.
Laws which expose HR to legal liabilities:
This shift brings HR into closer proximity with legal accountability. Under Australian law, individuals, not just organisations, can be held personally liable for breaches of workplace legislation. In particular, the definition of an “officer” under section 9AD of the Corporations Act 2001 states an officer is a person “who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation;”[1] or “who has the capacity to affect significantly the corporation’s financial standing”.[2]
In addition, section 550 of the Fair Work Act 2009 extends liability beyond the primary wrongdoer.[3] A person who is “involved” in a contravention is taken to have contravened the provision themselves. This includes situations where a person has aided, abetted, counselled or procured the breach; induced it; been knowingly concerned in it whether by act or omission; or conspired with others to bring it about.
These provisions read together significantly expand the scope of personal liability for HR practitioners.
Key Factors Courts Consider When Assessing HR Liability:
Courts do not impose personal liability lightly. However, where HR practitioners step beyond administrative functions and into decision-making, advisory, or enforcement roles, their conduct is closely scrutinised. Several key factors commonly influence whether liability will arise.
- Degree of involvement in the contravention
A central question is whether the HR practitioner was “involved” in the breach within the meaning of section 550 of the Fair Work Act 2009.[4] This does not require direct wrongdoing. Courts will examine whether the individual participated in, facilitated, or failed to prevent unlawful conduct. Even passive conduct, such as knowingly allowing a breach to continue, may be sufficient. - Knowledge and awareness of the breach
Liability often turns on whether the HR practitioner had actual or constructive knowledge of the unlawful conduct. Where an individual knew, or ought reasonably to have known, that their actions or even inaction would contribute to a breach, courts are more likely to find them personally liable. - Level of authority and decision-making power
The more senior and influential the HR role, the greater the expectation of accountability. HR professionals who contribute to strategic decisions, approve policies, or influence executive outcomes may fall within the definition of an “officer” as stated above,[5] and therefore owe due diligence obligations. Their failure to exercise that responsibility can expose them to liability. - Participating in unlawful conduct
Where HR practitioners take deliberate steps that contribute to a breach such as directing others to engage in unlawful practices, endorsing non-compliant processes, or implementing flawed systems courts are more likely to impose penalties. Acting under instruction is not, in itself, a defence if the conduct is known to be unlawful. - Failure to take reasonable preventative steps
HR professionals are often seen as custodians of compliance frameworks within organisations. A failure to implement, monitor, or enforce appropriate systems such as payroll controls, grievance procedures, or workplace safety mechanisms can be viewed as a breach of duty, particularly where risks were foreseeable and preventable.
Practical Steps to Mitigate Personal Risk
Given the expanding scope of HR responsibility, practitioners must take proactive steps to protect themselves while continuing to support organisational objectives:
- Keep detailed records of advice given, concerns raised, and actions taken, particularly where recommendations are not followed.
- Where risks are identified, ensure they are formally escalated to senior leadership or governance bodies.
- Seek legal advice for complex legal or high-risk matters such as terminations, underpayment issues, or whistle-blower complaints.
- Advocate for robust compliance systems, including regular audits, training, and clear accountability structures.
- Speak up, HR practitioners should be prepared to challenge decisions that may expose the organisation and themselves to legal risk.
Conclusion
The evolution of HR into a strategic and governance focused function reflects its growing importance within modern organisations. However, with increased influence comes increased accountability. Australian workplace laws make it clear that HR practitioners are not merely advisors operating behind the scene, they can be active participants in contraventions, and therefore personally liable.
Pointon Partners has extensive experience in advising HR practitioners. Please contact Michael Bishop or Amelita Hensman of our Employment Team.
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[1] Corporations Act 2001 (Cth) s 9AD(b)(i).
[2] Corporations Act 2001 (Cth) s 9AD(b)(ii).
[3] Fair Work Act 2009 (Cth) s 550.
[4] Ibid.
[5] Corporations Act 2001 (Cth) s 9AD.
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