Federal Court dismisses case against Employsure

1 October 2020

The Federal Court has dismissed the ACCC’s consumer law case against workplace relations advisor Employsure Pty Ltd, finding that it did not engage in misleading marketing or behave unconscionably in dealings with small businesses.

The ACCC alleged that, between August 2016 and November 2018, Employsure misrepresented to small business consumers that it was, or was affiliated with, a government agency, using Google Ads and through statements on its websites.

The Google Ads featured headlines such as ‘Fair Work Ombudsman Help – Free 24/7 Employer Advice’ and ‘Fair Work Commission Advice – Free Employer Advice’ and appeared in response to search terms such as ‘fair work ombudsman’.

The ACCC also alleged that Employsure represented to consumers that it provided a helpline for free workplace relations advice and the primary purpose of the helpline was to provide this free advice when in fact the primary function of that helpline was to secure marketing leads to sell Employsure’s paid services.

“We took this case because the ACCC had received over 100 complaints relating to Employsure, raising concerns including alleged misleading conduct, unfair sales tactics and unfair contract terms,” ACCC Commissioner Sarah Court said.

“We were particularly concerned that Employsure’s ads gave the impression that Employsure was a government agency or affiliated with government. Any attempt to misrepresent a business as being part of the government is a serious breach of trust, and of our consumer laws.”

However, the Court found that the ads were not misleading and considered that a  reasonable business owner would not infer an affiliation with government existed. This includes because the word “Ad” accompanied by a .com (not .gov) URL appeared and “fair work” has a broad descriptive meaning not limited to government agencies.

Further, from Employsure’s perspective, the function of the helpline was to give business owners the opportunity to obtain free advice in order for Employsure to secure the opportunity to make a pitch to those businesses for new clients.   

The Court found that a reasonable business owner would appreciate that the helpline was operated by a private company and therefore likely served a commercial purpose.

The ACCC also alleged that Employsure acted unconscionably toward three small businesses who contacted Employsure after ‘googling’ the Fair Work Ombudsman or a related government agency and believed they were speaking with someone associated with a government agency. They were each ultimately signed up to long-term contracts with Employsure for a significant fee.

The Court found that Employsure did not act unconscionably in its dealings with these businesses. The Court considered that while the conduct might be described as forceful marketing, it was not, in the circumstances relevant to each business, contrary to the norm of conscientious behaviour.

The Court also dismissed the ACCC’s case that certain terms in three of Employsure’s standard form contracts were unfair.

“We will carefully consider the judgment,” Ms Court said.

Background

Employsure is a private company that offers employment relations and workplace health and safety advisory services to business owners. It has no affiliation with any government agency. 

The ACCC instituted proceedings against Employsure in December 2018.

 

An example of the Google Ads run by Employsure

An example of the Google Ads run by Employsure

Release number: 
206/20
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