Court Determines Employsure Ads Misleading
The Full Federal Court on Friday, 13 August 2021, determined the ACCC’s appeal that Google Ads published by Employsure over a two-year period were deceptive. The Court found that Employsure had breached the Australian Consumer Law by making misleading representations that it was, or was affiliated with, a government agency, overturning an earlier judgment. While Employsure are awaiting a ruling on penalties, this likely ends the 3-years of proceedings with mixed results for members.
Background
Employsure, a privately-owned employment relations and workplace health and safety advisory service provider, was alleged to have engaged in deceptive advertising via its Google Ads. Prior to December 2018, Employsure’s conduct and advertising practices, including Google Ads published by Employsure, led to over 100 complaints to the Australia Competition and Consumer Commission (ACCC). In December 2018, the ACCC began proceedings against Employsure, alleging that the ads misled consumers that it was, or was affiliated with, a government agency.
On 1 October 2020, a single member of the Federal Court dismissed the ACCC’s case, found that Employsure had not breached the Australian Consumer Law. The Judge determined that Employsure's Google Ads were not misleading or deceptive when viewed through the prism of an ordinary or reasonable member of the target audience (primarily business-owners) and none specifically stated an affiliation with a government agency, such as the Fair Work Ombudsman (FWO) or the Fair Work Commission (FWC). Later that month, the ACCC filed an appeal of the decision to be reviewed by a Full Bench of the Federal Court.
The Appeal
The full bench found that the judge in the initial case had, in considering the Google Ads, attributed "too high a level of shrewdness or wariness, digital literacy, and/or commercial sophistication" when determining the qualities of the ordinary or reasonable member of the target audience. The judge had assumed business owners would more give more attention or scrutiny to the advertisements than the full bench believed were likely, especially small business employers.
It was determined that the initial Judge was wrong when they conceived that a business owner’s only reasonable reaction to the advertisements would be to recognise them as coming from a private business, rather than a government agency, despite those ads:
- appearing at the top of the list of search results for ‘Fair Work’, ‘FWO’ and ‘FWC’
- using headlines like "Fair Work Ombudsman Help - Free 24/7 Employer Advice", and,
- linking to the website “fairworkhelp.com.au”
In its appeal decision the full court said business owners "encompasses a wide cross-section of the public" and the majority of Employsure’s customers are small and "include, for example, tradesmen and women, corner stores, small hairdressing salons and barbershops, small shops and cafes, and small courier businesses".
The bench did "not accept that running a small business necessarily requires that the owner be intelligent or shrewd, have a high level of acumen, be digitally literate or commercially sophisticated, or have any amount" of experience. It found that the ads were "intended to be seen and read by a wide range of business owners, including those who are intelligent or shrewd and those who are gullible; the wary and the unwary; those who are well educated and those who are not; those who have a good facility in English and those who do not; those who are experienced in running business and those who have less or no prior experience; and those who are digitally competent or commercially sophisticated and those who are not."
The full bench also found that the initial judge "erred in failing to recognise the effectiveness of Employsure’s marketing strategy” when it came to the Google Ads and the advertising of ‘free’ advice. The bench considered that businesses searching for ‘Fair Work’ or similar, may be needing immediate help and this may have affected the “level of attention and scrutiny that an ordinary and reasonable business owner” would have taken. They also determined that the initial judge failed to properly consider that the "higher a website features in the search result, the more likely it is that it will be selected by consumer" and that help or advice advertised as free "was likely to support the impression" the searched for government agency would provide it. They wrote:
"It would not be an unreasonable or extreme reaction for an ordinary or reasonable business owner to have understood that commercial organisations mostly do not offer free help or advice whereas government agencies regularly do so"
The full court found Employsure's conduct misleading or deceptive, or likely to be so, in contravention of s18 of the Australian Consumer Law and each ad "conveyed a representation which was false or misleading" in breach of s29(1)(b) and (h). The matter was referred back to the initial judge to determine declarations and penalties.
What does this mean for Members?
The Appeal only dealt with historic advertising practices, however it is likely that any of Employsure’s future practices will be closely scrutinised. Should the ACCC receive new complaints, they are likely to review with careful attention.
Along with alleging misleading advertising practices, the ACCC also originally accused Employsure of promising free IR advice but using "high pressure sales tactics" to lure businesses onto long-term service contracts worth thousands of dollars a year. Sadly, the Appeal did not deal with this conduct, resulting in their being no changes to original determination, which did not find the allegation.
Despite there being no finding that would support the need for Employsure to readily release businesses pressured into contracts, the QTA have successfully assisted members with exiting contracts with Employsure. If you are considering your options, you can always contact Ezra Pyers, Employment Relations Manager on ezra@qta.com.au | 07 3394 4388 | 0411 123 185, to discuss.
