ACCC appeals Employsure penalty, says $1 million fine not enough

The Australian Competition and Consumer Commission (ACCC) has appealed a $1 million penalty judgment against workplace relations advisor Employsure for advertising that misrepresented the company as a government agency, or being affiliated with one.

In August last year, the federal court upheld an appeal by the ACCC, ultimately fining Employsure $1 million for making false or misleading representations in its Google Ads between August 2016 and August 2018.

The ads appeared in response to search terms such as ‘fair work ombudsman’, with return results such as ‘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. Source: ACCC.

The unanimous decision of the full bench of the court found the company had breached Australian consumer law for misrepresenting that it was a government agency when that was not the case.

But the ACCC is now seeking to appeal the penalty sum — arguing that a fine of less than $5 million for Employsure’s conduct is ‘manifestly inadequate’.

Commission deputy chair Mick Keogh said Employsure’s Google ads potentially misled thousands of Australian businesses, causing the public to believe they were either dealing with a government agency or a company affiliated with one.

He added that a higher penalty against Employsure would send a clear message to internet advertisers that the misleading of consumers was a serious offence.

“Any attempt to misrepresent a business as being part of the government is a serious breach of trust, and of our consumer laws,” Keogh said.

“We believe a higher penalty is necessary and appropriate having regard to the nature of the conduct and size of Employsure, to ensure that internet advertisers are sufficiently deterred from misleading consumers about who they are dealing with.”

The court order that Employsure face a $1 million penalty followed another successful appeal by the commission last year; however, the full bench determined the sum of the fine on a previous finding by Federal Court judge John Griffiths that the conduct was not deliberate.

A decision by Justice Griffiths in October 2020 — which accepted evidence that by the time a consumer signed up with Employsure, its internal processes meant consumers should have been aware that the services were provided by Employsure and that Employsure was not affiliated with or endorsed by the government — was relied upon by the full Federal Court to reach the $1 million sum.

In a statement last November, Employsure CEO David Price said while the company was disappointed with the outcome, it accepted the court’s decision without reservation. He also noted a reference that Justice Griffiths made to the ACCC’s $5 million penalty request, saying that it made the judge ‘gag’.

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

“[Justice Griffiths said the ACCC’s] injunctive relief, which was ultimately rejected, ‘failed to demonstrate that any useful purpose will be served by one, and that the conduct was not deliberate or likely to recur’,” he said.

Price went on to say that his company had made ‘significant changes and improvements’ since the ACCC alerted Employsure of the ads in 2018.

“We have progressively strengthened our messaging to avoid any future ambiguity, including the monitoring of language on our websites, should someone click on them through Google,” Price said.

A hearing date for the ACCC’s latest appeal before the full Federal Court is still to be confirmed.

This article was first published by The Mandarin.