Company accused of misleading consumers to believe it was affiliated with government
Workplace relations specialists Employsure has been ordered to pay $3 million by the Full Federal Court as penalty for making misleading Google advertisements.
The Full Federal Court upheld an appeal submitted by the Australian Competition and Consumer Commission (ACCC) that sought a higher penalty for the firm given its size and the length it misled consumers into believing that it was, or was affiliated with, a government agency through Google ads.
"Weighing all the relevant factors, bearing in mind the protective and deterrent purpose of a pecuniary penalty, as applied to the facts of this case, and the size and financial position of Employsure, we are satisfied that the penalty of $1 million was manifestly inadequate," the Full Federal Court said in its ruling. "It failed to adequately reflect the seriousness of the contravening conduct, the variety of forms that it took and the period over which it occurred so that it did not achieve the necessary degree of general."
The ACCC first took Employsure to court in 2018 after receiving more than 100 complaints on Employsure's misleading conduct, unfair sales tactics, and unfair contract terms.
According to the ACCC, Employsure breached the Australian Consumer Law in using Google Ads campaigns and on its websites between January 2016 and November 2018.
The advertisements were designed to appear in response to search terms such as "fair work ombudsman" and "fair work Australia helpline" that consumers use when seeking employment relations advice from the government, according to the ACCC's allegations.
"The ACCC alleges that Employsure targeted small businesses who were seeking the free workplace relations helpline operated by the government. Its primary objective was to sign these businesses up to long-term contracts with on-going fees," said former ACCC Commissioner Sarah Court in a statement. "Business must not claim they provide free, government-affiliated services in order to lure customers into buying their services."
The case was initially dismissed by the Federal Court in October 2021, before the Full Federal Court upheld the ACCC's appeal in August 2021.
A $1-million penalty was previously imposed by the Federal Court against the company, which the Full Federal Court hiked to $3 million after the ACCC appealed for a higher penalty.
In addition to the penalty, the Full Federal Court also ordered Employsure to pay ACCC's costs of the initial penalty hearing and appeal.
ACCC Chair Gina Cass-Gottlieb said the agency pushed for a higher penalty order given the company's size and the length of time the company ran the misleading advertisements.
"This decision should serve as a reminder that it is a serious breach of trust to misrepresent a business as being part of the government, and that such breaches of the law will have serious consequences," Cass-Gottlieb said in a statement.
