Federal Court fines Employsure $1 million over misleading ads

Rod Sims ACCC

ACCC chair Rod Sims.

Workplace relations advice service Employsure has been fined $1 million by the Full Federal Court for giving the false impression it was affiliated with a government agency in online ads.

After a lengthy legal battle brought by the consumer watchdog, the Full Federal Court imposed the $1 million in penalties on Employsure, which is one of the largest providers of employment relations and work health and safety advice in Australia.

In a judgment handed down on Monday, the court found Employsure had breached the Australian Consumer Law (ACL) by making false or misleading representations in six Google Ads, which appeared online between August 10, 2016 to August 31, 2018.

The ads included the phrase “Fair Work Ombudsman Help” and linked to the URL fairworkhelp.com.au, giving the impression Employsure’s services were affiliated with the government agency.

David Price, chief executive of Employsure, acknowledged the penalty in a statement, saying he was disappointed with the outcome, but accepted the court’s decision “without reservation”.

“We have never claimed to be affiliated with, or endorsed by, any government agency, and we still stand by this,” Price said.

“Employsure has always strived to act in the best interest of small businesses, taking thousands of calls every week from our clients who see absolute value in our services.”

The Australian Competition and Consumer Commission (ACCC) initiated proceedings against the workplace relations advisory service in December 2018, after it received more than 100 complaints from small businesses.

But the consumer watchdog’s case failed in October 2020, when the federal court dismissed the proceedings.

The ACCC then appealed the decision, pursuing its argument that Employsure had breached the ACL 29 times in misleading advertising and should be fined $5 million.

While the Full Federal Court upheld the ACCC’s appeal in August this year, it wasn’t until this week that the judgment, including the penalty, was announced.

The court determined Employsure had breached only three sections of the ACL in six ads. It also found the misleading conduct “was not deliberate” and issued Employsure $1 million in penalties.

Speaking to SmartCompany, Peter Strong, small business advocate and former chief executive of the Council of Small Business Organisations Australia (COSBOA), welcomed the Full Federal Court’s decision, but said the fine was underwhelming.

“It sends a message but the $1 million fine is not enough,” Strong says.

Strong, who has been familiar with Employsure’s advertising tactics for about five years, says the ads were “a scam because they tricked people into thinking it was the Fair Work Ombudsman”.

“It’s taken a long time for the ACCC to actually get them into court,” Strong adds.

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