Misleading and deceptive conduct in the workplace

Misrepresentation involves providing false or misleading information that induces another party to act, leading to potential harm or loss. In the workplace, misleading and deceptive conduct by employees or employers can lead to financial, professional and legal consequences.

Deceptive and misleading conduct is often only associated with consumer law because it comes from the Australian Consumer Law (ACL).  However, its principles also extend to the employer-employee relationship in various ways. 

What is employee misrepresentation?

There are a number of ways an employee may be determined to have behaved in misleading and deceptive conduct. Such misrepresentation often occurs during the recruiting process, leading to an appointment based on false information or relevant information the employee failed to disclose.

An employee might misrepresent their qualifications, experience or skills during the recruitment process to secure a job. This can include:

• falsifying academic credentials;
• exaggerating previous job experience; or
• saying they have skills they do not possess.

Such misrepresentations can be seen as misleading and deceptive conduct under the ACL because they deceive the employer into making employment decisions based on the false information that has been provided. If discovered by the employer, this could result in termination of the employee, legal action and damage to their professional reputation.

Employees may also misrepresent their performance, productivity or conduct to maintain their job or secure a promotion. This can involve:

• falsifying timesheets;
• overstating achievements; or
• concealing errors and misconduct.

What action can be taken against employees for misleading and deceptive conduct?

While the ACL primarily focuses on consumer protection, its principles against deceptive conduct can apply in employment contexts where such misrepresentation affects business operations and decision-making.

The following are some misrepresentation-based circumstances where the employment may be terminated:

• The misrepresentation was discovered during a probation period;
• The misrepresentation caused harm to the business (financially or otherwise), which could provide a defence for termination;
• The misrepresentation constituted serious misconduct such as fraud or other criminal offences.

When employees misrepresent their qualifications, it can lead to significant legal and employment consequences. The below case illustrates how the Fair Work Commission has dealt with such situations.

Case Review - Charles Tham v Hertz Australia Pty Limited T/A Hertz [2018] FWC 3967

Charles Tham was dismissed after Hertz discovered he had falsified his resume regarding the duration of his previous employment. Following this, he lodged an unfair dismissal application.

The Fair Work Commission (FWC) upheld the dismissal and emphasised that Tham’s intentional misrepresentation undermined the necessary trust and confidence Hertz has in his ability to perform his role. The FWC specifically noted that “the gravity of the intentional dishonesty upon which Mr Tham was based, when considered in its totality, represents matters which were fundamentally inconsistent with the continuation of the employment relationship.”

This case demonstrates that Australian law treats misrepresentation of qualifications seriously, often resulting in lawful termination of employment. Misleading an employer about qualifications undermines the trust essential for any employment relationship and can lead to significant legal consequences. Under the ACL, such misrepresentation can be challenged as it affects the decision-making process of potential employers.

What is employer misrepresentation?

Employers are obligated to provide accurate information about job roles, responsibilities and conditions. Misrepresenting job descriptions or employment terms to attract candidates can be considered misleading and deceptive conduct under the ACL.

This can include:

• overstating job opportunities, including the future prospects of the business;
• a promise of minimum hours for a casual worker that does not eventuate;
• misrepresenting the nature of the work; or
• downplaying job challenges of the role.

It can also include inaccurately communicating full terms and conditions attached to benefits or remuneration. When employees find the actual job differs significantly from what was represented, it can lead to dissatisfaction, turnover and potential legal claims.

Employers may also misrepresent the company culture, work environment, or opportunities for career advancement to attract talent. If the actual work environment is significantly different from what was promised, employees may feel misled and dissatisfied. Under the ACL, such misrepresentation can be challenged as it affects the decision-making process of potential employees.

Case Review - Morton v Interpro Australia Pty Ltd & Anor [2009] FMCA 423

In this case, Mr Morton was a senior sales employee. He claimed that his employer, Interpro Australia, deceived him about the terms of his employment – specifically about a commission-based bonus scheme.

Interpro promised a highly lucrative bonus scheme during the hiring process, which convinced Mr Morton to accept the job and move from the United Kingdom to Australia. However, after he moved and began working with Interpro, they replaced the bonus scheme with a less advantageous one.

The Federal Magistrates Court, as it then was, found that Interpro’s conduct was misleading and deceptive under the Trade Practices Act 1974 (which has now been replaced by the Competition and Consumer Act 2010. The Court held that the false representation led Mr Morton to accept the position and relocate internationally and ordered Interpro to pay him over $20,000 in damages.

What action can be taken against employers for misleading and deceptive conduct?

Employees have a number of options available to them if their employer has engaged in misleading and deceptive conduct:

• Compensation under the Competition and Consumer Act 2010 (Australian Consumer Law);
• A common law claim for breach of the employment contract

Compensation options under Australian Consumer Law

The ACL provides a framework for addressing and remedying misleading and deceptive conduct. Employees who have been misled by employers can seek compensation through legal channels, potentially claiming monetary compensation for losses incurred due to the misrepresentation.

Employers found to have made misrepresentations can face significant penalties, including fines and orders to rectify the misrepresentation.

A common law claim for breach of the employment contract

If an employer has made false representations within an employment contract, for example, related to remuneration, and the employee suffers loss due to that misrepresentation, they may be able to bring a claim for breach of contract at common law to seek compensation.

Get help from an employment lawyer

If you think your employer has misled and deceived you and misrepresented your job by making false statements and false promises, please contact our team. 

Contacting Hall Payne Lawyers

You can contact us by phone or email to arrange your consultation; either face-to-face at one of our offices, by telephone or by videoconference consultation.

Phone: 1800 659 114
Email: general@hallpayne.com.au