Gorval v Employsure Pty Ltd and; Lynch v Employsure Pty Ltd and; Mahoney v Employsure Pty Ltd

The applicants, Gorval, Lynch, and Mahoney, brought proceedings against the respondent, Employsure Pty Ltd, in the Federal Court of Australia. The dispute concerned allegations that Employsure had engaged in misleading or deceptive conduct in contravention of section 18 of the Australian Consumer Law (ACL), Schedule 2 to the Competition and Consumer Act 2010 (Cth). Specifically, the applicants alleged that Employsure made false or misleading representations about the nature and effect of its employment relations advice and services.

The primary legal issue before the Court was whether Employsure's representations regarding its employment relations advice and services were misleading or deceptive, or likely to mislead or deceive, within the meaning of s 18 of the ACL. This required the Court to consider the precise nature of the representations made, the context in which they were made, and the likely impact of those representations on the target audience, namely small and medium-sized businesses. The Court also had to determine whether Employsure's conduct was unconscionable, in contravention of s 21 of the ACL.

Judge Altobelli found that Employsure had engaged in misleading and deceptive conduct in contravention of s 18 of the ACL. The Court reasoned that Employsure's representations created an impression that its advice and services were comprehensive, authoritative, and would ensure compliance with employment law obligations, when in fact they were not. The Court considered the overall impression conveyed by Employsure's marketing materials and sales practices, and concluded that a significant number of businesses would have been misled into believing they were receiving a level of service and protection that Employsure did not, and could not, provide. The Court also found that Employsure's conduct was unconscionable, as it exploited the vulnerability of small businesses seeking to navigate complex employment law.

The Court made orders against Employsure, including declarations that its conduct contravened ss 18 and 21 of the ACL, and injunctions restraining Employsure from engaging in similar conduct in the future. The Court also ordered Employsure to pay pecuniary penalties.