In order to attract the best employees, employers will often offer lucrative perks and incentives during the recruitment process. However, if the employer fails to honour these, they could be liable for employer misrepresentation. Similarly, if an employee lies about their qualifications or experience on their resume to be hired, they could also be liable for employee misrepresentation.
If you find yourself in this situation, please speak to the expert employment lawyers at Owen Hodge for legal advice.
What is employer misrepresentation?
Employer misrepresentation is when an employer (or recruitment agency) makes a pre-hiring assurance to incentivise you to accept a job offer. If these assurances aren’t honoured, or the employer was deceptive about the business, they could be liable for employer misrepresentation.
Employer misrepresentation can include misrepresenting the:
- Nature of employment
- Terms of employment
- Conditions of employment
- Future remuneration
- Availability of employment
- Company’s financial status
- Any other matters relating to the employment
Can I sue my employer for false promises?
Under Section 18 of the Australian Consumer Law, (which forms part of the Competition and Consumer Act 2010) any conduct which is deceptive and misleading in nature or is likely to deceive or mislead, is unlawful in trade or commerce.
The Australian Consumer Law also prohibits deceptive and misleading conduct during the recruitment process. So if there has been employer misrepresentation, the employee may be entitled to claim damages for any losses suffered.
Employer misrepresentation case examples
Morton v Interpro Australia Pty Ltd & Anor [2009] FMCA 423
Mr Morton, a senior sales employee, alleged that the company made false representation about its commission based bonus scheme during the negotiations made while accepting the post. He asserted that on the basis of the lucrative bonus, he accepted the offer of employment and relocated from the United Kingdom to Australia to join the company.
After he commenced employment, the company abruptly removed the beneficial commission based scheme. The Court held that the representation induced Mr Morton to accept the role and to relocate to Australia. In such circumstances, the representation was found to be a conduct that was misleading and deceptive.
Moss v Lowe Hunt & Partners [2010] FC 1181
In another case, the Plaintiff, Mr Moss worked as a freelancer and took work on a temporary basis from various companies. Lowe Hunt & Partners (Lowe Hunt) was a company for whom Mr Moss used to work on a contractual basis. Lowe Hunt expressed his idea to hire Mr Moss as a permanent employee in its company instead of using him on a contractual basis. While negotiating with Mr Moss in the hiring process, Lowe Hunt made a false representation about the company’s financial position and misrepresented the company as a financially successful agency.
Mr Moss banked on this representation and joined Lowe Hunt. After 18 months of his tenure, he realised the actual condition of the company was completely different from the representations Lowe Hunt made. Mr Moss was disappointed and claimed damages. The Federal Court found Lowe Hunt guilty of representing false and misleading statements. The Judge stated it was misleading or deceptive to describe a business as being successful when it did not have the continued support of its parent company and henceforth, ordered damages to be paid to Mr Moss for the losses he suffered.
What is employee misrepresentation?
Employee misrepresentation is when an employee provides false information regarding their work experience, qualifications or skills, or fails to disclose crucial information which the employer must know prior to hiring.
Similar to employer misrepresentation, an employee can be held liable for deceptive and misleading conduct.
Can an employee be dismissed for misrepresentation?
In most situations, employers do not have the legal power to fire dishonest employees. However, there may be a pertinent clause in the employee’s contract that indicates that if the individual engages in misrepresentation, they can receive disciplinary action and, in some cases, be at risk for termination.
Learn more:
- Unfair dismissal
- Termination of employment
- Difference between unfair dismissal and wrongful dismissal
Talk to Owen Hodge
Over the years, our small business lawyers and executive employment lawyers have represented both employers and employees for deceptive and misleading conduct matters.
If your employer/employee has deceived you by making false statements, feel free to contact our team of experts at Owen Hodge Lawyers for assistance.