Misleading and deceptive conduct
Competition and Consumer Act 2010 (Cth)
Maurice Blackburn's employment lawyers regularly provide advice
to clients about misleading and deceptive conduct. This includes
employees' rights under the Competition and Consumer Act
2010 (Cth) and entitlements to bring a claim against employers
for misleading and deceptive conduct.
The Act provides protection for prospective employees including
misleading and deceptive conduct.
Misleading and deceptive conduct
Conduct that is misleading or deceptive, or is likely to mislead
or deceive, is prohibited under Section 18 of the Competition
and Consumer Act 2010. The misleading and deceptive conduct
provisions make it unlawful for a prospective employer or
recruitment agent to make false or misleading representations to a
prospective employee about:
- the availability, nature or terms and conditions of employment,
or any other matter relating to the employment, or
- a company's financial status, including profitability and risk,
or other material aspect of any business activity of the company
that proposes to engage the prospective employee.
These provisions are particularly relevant in today's
competitive labour market where employers provide incentives to
attract the best employees, but may not always honour their
promises. They can also relate to circumstances where an employer
recruits an employee with assurances regarding the financial status
and viability of the business, which may then turn out to be
Cases where employees have made a claim under the misleading and
deceptive conduct provisions include Morton
v Interpro Australia Pty Ltd & Anor  FMCA 423
and Moss v Lowe Hunt
& Partners  FC 1181.
In Morton v Interpro Australia, Mr Morton, a senior sales
employee, successfully argued that his employer had engaged in
misleading and deceptive conduct. Mr Morton alleged that the
company made representations about its commission based bonus
scheme during negotiations before he accepted the role with the
company. He claimed that on the basis of these representations, he
accepted the offer of employment and relocated from the United
Kingdom to Australia to join the company. After commencing in the
role, the company unilaterally removed the benefit to the
commission based scheme.
The court held that the representation induced Mr. Morton to
accept the role and move to Australia. In such circumstances, the
representation was found to be conduct that was misleading and
Moss v Lowe Hunt & Partners is another case of misleading
and deceptive conduct. Mr Moss was an advertising and research
consultant who ran his own company. He worked on a consultancy
basis for Lowe Hunt & Partners (Lowe Hunt). Rather than using
Mr Moss on a consultancy basis, Lowe Hunt wanted to employ Mr Moss
directly and tried to recruit him to the company. In the course of
courting him, Lowe Hunt made representations to Mr. Moss, including
that that the company was a financially successful agency and was
in a strong business position.
Mr Moss relied on these representations and joined Lowe Hunt as
an employee. The representations proved to be false and only 18
months after he commenced employment Mr. Moss was made redundant.
The court held that Mr. Moss was induced to enter into the contract
by the misleading conduct on behalf of Lowe Hunt and ordered
damages to be paid to Mr Moss for the losses he suffered.
Moss became an employee of Lowe Hunt after relying on these
statements, but within 18 months his role was made redundant. The
Federal court found Lowe Hunt's representations to be false and
misleading. 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.
Employees who have been misled or deceived about the terms and
conditions of their employment, earnings or career progress may
have a claim against their employers. For further information,
contact our employment team on 1800 810 856 or
send us a message through the contact us section.