Employsure Breached Consumer Law: Full Federal Court

The Full Federal Court has found that workplace relations consultancy, Employsure Pty Ltd (Employsure), breached Australian Consumer Law by falsely representing that it was, or was affiliated with, a government agency.

Background

The case was brought against Employsure by the Australian Competition and Consumer Commission (ACCC) in the Federal Court.   The ACCC alleged that Employsure breached Australian Consumer Law (ACL) in Schedule 2 of the Competition and Consumer Act 2010 (Cth):

(a) through the publication of seven Google Ads over the relevant period that conveyed the Government Affiliation Representations:

(i) engaged in misleading or deceptive conduct or conduct which was likely to mislead or deceive in contravention of s 18 of the ACL; and

(ii) made false or misleading representations that its services were of a particular standard or quality in contravention of s 29(1)(b) of the ACL, and that it had government sponsorship or approval in contravention of s 29(1)(h).

(b) engaged in misleading conduct or conduct which was liable to mislead in contravention of ss 18(1) and 34 of the ACL by using keywords associated with government agencies as part of the design of its Google Ads campaign;

(c) engaged in misleading or deceptive conduct or conduct which was liable to mislead and/or made false or misleading representations in contravention of ss 18(1), 29(1)(b) and 34 of the ACL by representing that Employsure provided a free advice helpline, which consumers could call to receive advice free of charge, where the primary purpose of the free advice telephone line was to secure marketing leads and book face to face meetings to sell its advisory services;

(d) engaged in unconscionable conduct in contravention of s 21 of the ACL in its dealings with three of its customers; and

(e) included unfair contract terms in three versions of its standard form contract in contravention of ss 23 and 24 of the ACL.

In October 2020, Justice Griffiths of the Federal Court dismissed the ACCC’s claims.  The ACCC appealed the first claim, where six Google Ads were in question.   

The Google Ads appeared on Google searches made between 10 August 2016 to 31 August 2018.  Employsure used keywords in the Google Ads that were frequently used by consumers for visits to websites of major government agencies including the Fair Work Ombudsman and the Fair Work Commission.  For instance, when a consumer performed a Google search for the term, “fair work ombudsman”, the headline of the Google Ad which appeared as the first search result said, “Fair Work Ombudsman Help – Free 24/7 Employer Advice”.  When the consumer clicked on the hypertext in the Google Ads they would be taken to an Employsure operated landing page.  If the consumer called the telephone number in some of the Google Ads, they would reach an Employsure representative.  None of the Google Ads made any mention of Employsure.

Example of Employsure Google Ad

Findings

The Full Court found that Justice Griffiths erred in failing to find that by publication of the Google Ads in question, Employsure conveyed the Government Affiliation Representations to the ordinary or reasonable member of the relevant class, which constituted misleading or deceptive conduct or conduct which was likely to mislead or deceive in contravention of s 18, and the making of false and misleading representations in contravention of s 29(1)(b) and (h). The Full Court held:

In relation to the alleged contravention of s 18 of the ACL, we are satisfied that the publication of each Google Ad conveyed the Government Affiliation Representations to the ordinary or reasonable business owner, or at least were likely to. In fact, the advice was to be provided by Employsure which is a private company which is not affiliated or endorsed by any government agency. Employsure’s conduct in causing the Google Ads to be published was misleading or deceptive or likely to be so in contravention of s 18.

In relation to s 29(1)(b), we are satisfied that publication of each Google Ad represented to ordinary or reasonable business owners that the advertised free advice was to be provided by the government agency named in the headline, and thus that it would be of the standard or quality to be expected from a government agency. Each advertisement thus represented that the service would be “of a particular standard, quality, value or grade” as required under s 29(1)(b). As the advice was, in fact, to be provided by Employsure which is a private company, the service was not of the represented standard or quality. Each Google Ad conveyed a representation which was false or misleading in contravention of s 29(1)(b): Optell at 67.

In relation to s 29(1)(h), we are satisfied that publication of each Google Ad represented to ordinary or reasonable business owners that (if the advertised free service was not to be provided by the government agency named in the headline) it was to be provided by some other entity affiliated with, in the sense of contracted by, the named government agency. Each advertisement thus represented that the person making the representation had an “approval or affiliation” by or with the government agency as required under s 29(1)(h). As Employsure had no such approval or affiliation, each Google Ad conveyed a representation which was false or misleading in contravention of s 29(1)(h).

ACCC response

Following the Full Court’s judgment, ACCC Deputy Chair Mick Keogh said:

We took this action after receiving over 100 complaints relating to Employsure, including from small businesses who had contacted Employsure after viewing a Google Ad and thought they were dealing with a government agency.”

We brought this case because we were 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.