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Employsure (HR consultants) must pay $3 million
Article from Smartcompany 8 February 2023
Workplace relations advisor Employsure now must pay $3 million for making false and misleading representations in its online ads that it was, or was affiliated with, a government agency.
The competition watchdog, the ACCC, had appealed to the Full Federal Court against a $1 million penalty, arguing it was inadequate to deter others from similar actions in the future..The ACCC: “The Court set aside the $1 million penalty originally imposed by the Federal Court, finding it was manifestly inadequate and said that misrepresenting that one has government sponsorship or approval is very serious and must be deterred.”
Employsure is a private company with offices in Sydney, Melbourne, Brisbane and Perth that offers employment relations and workplace health and safety advisory services to business owners for a fee under contract.
The ACCC instituted proceedings in December 2018, alleging Employsure misled consumers that it was, or was affiliated with, a government agency, through its Google Ads published on Google search results pages.
In October 2020, the Federal Court dismissed the ACCC’s case. The Full Federal Court upheld the ACCC’s appeal unanimously in August 2021.
In November 2021, the original Federal Court judge imposed a $1 million penalty on Employsure for this conduct. The ACCC appealed this penalty decision in January 2022.
Employsure’s ads appeared in Google search results between August 2016 and August 2018, when consumers searched for “fair work ombudsman”, “fair work commission” and other associated terms, and featured headlines including “Fair Work Ombudsman Help – Free 24/7 Employer Advice” and “Fair Work Commission Advice – Free Employer Advice”.
An example of the Google Ads run by Employsure:
ACCC chair Gina Cass-Gottlieb said: “We received more than 100 complaints about Employsure‘s conduct. We were concerned that many small business operators were misled by Employsure’s ads into thinking they were getting help and advice from a government agency.
“We appealed the earlier $1 million penalty order because we believed the conduct, the company’s size and lengthy period during which they ran the misleading ads meant a higher penalty was warranted.
“We welcome this increased penalty, which we believe will help to deter similar breaches in the future. Penalties must be sufficiently high to deter others, so they cannot be seen as just an acceptable ‘cost of doing business’.
The Court also upheld the ACCC’s cost appeal and made new orders requiring Employsure to pay the ACCC’s costs of the initial penalty hearing and appeal.
This incident is not the first time that Employsure has come under scrutiny for its business practices. In 2019, the company was investigated by the Fair Work Ombudsman for allegedly pressuring small business clients into signing long-term contracts and charging excessive fees. While Employsure was cleared of any wrongdoing in that case, it underscores the need for businesses to be diligent in their choice of HR consulting firms and to carefully review any contracts or agreements before signing.
In conclusion, the case against Employsure serves as a cautionary tale for businesses to be transparent in their advertising practices and to not mislead consumers. Small business owners must be vigilant in their choice of HR consulting firms, carefully reviewing contracts and agreements and ensuring that they receive accurate and unbiased advice. Employsure has acknowledged its mistakes and has committed to improving its practices, but it remains to be seen whether it can regain the trust of small business owners and the wider community.