How to avoid making misleading and deceptive statements pre-employment when recruiting in Australia
If you are a business owner, you should be cautious when making pre-employment representations to prospective employees as you could expose yourself to litigation for misleading or deceptive conduct.
Misleading and deceptive conduct is defined in Section 31 of the Australian Consumer Law (“ACL”), stating that in relation to employment that is to be offered, a person must not engage in conduct that is liable to mislead persons seeking employment as to:
The availability of the employment;
The nature of the employment;
The terms and conditions of the employment; or
Tny other matter relating to employment.
If an employer breaches section 31 of the ACL, this will constitute unlawful conduct and penalties of up to $1.1million may apply for companies.
This section was recently considered in the case of Maxutova v Nunn Media Pty Ltd . In this case, the employee was approached by a recruiter to take up a new position. The employee took up the position but was terminated within the probation period for poor performance.
The employee alleged that the employer engaged in misleading and deceptive conduct and that the recruiter, on behalf of the employer, had made representations that the role was for a person looking for a long-term position as the employer was looking to make a long-term commitment.
The Court found that the representations were of a general nature and that just because the employer was seeking to employ a person on a long-term basis, does not mean that the employee is immune from the employer’s right to terminate the contract in accordance with the terms of the contract.
Therefore, the Court held that the employer did not engage in misleading and deceptive conduct. This case highlights three important points that you should consider if you are a business owner:
Representations made on your behalf (i.e. by a recruiter) may expose you to allegations of misleading and deceptive conduct;
Employment contracts should be carefully drafted to clearly state that the contract supersedes all prior agreements and negotiations and that the employee acknowledges that they have not relied upon any representations made regarding employment; and
A position description should be provided to the prospective employee together with the employment contract, which will ensure that the employee is fully aware of the duties and requirements of the position prior to accepting it.
If you have any questions about misleading and deceptive conduct in employment, you can contact our Employment Law Team to discuss this further.