Preventing Misrepresentation in Recruitment

Relevant Legislation

Section 31 of Schedule 2 of the Australian Consumer Law (ACL) contains protections for prospective employees against false or misleading representations made during the recruitment process. It is critical that employers are aware of this, and how to avoid falling foul of the law.

What is Misrepresentation?

Misrepresentation occurs when false or misleading information is provided to someone, leading them to enter into an agreement they might not have otherwise agreed to. In employment, this can include exaggerating job responsibilities, misrepresenting salary or benefits, or failing to disclose negative aspects of the job. Misrepresentation can have serious legal, financial, and reputational consequences for employers.

Employer Liability for Misrepresentation

Employers who misrepresent employment conditions may be liable for damages under the ACL, including:

• Compensation for financial losses;
• Damages for emotional distress;
• Legal costs, which can be significant; and
• Pecuniary penalties of up to $50,000.00 for incorporated employers.

In addition to legal liabilities, employers may suffer reputational harm, making it difficult to attract and retain talented employees in the future.

Steps Employers Can Take to Prevent Misrepresentation

1. Due Diligence

Employers should:

• Ensure job listings and descriptions are accurate and up-to-date;
• Regularly review and verify information provided to candidates through official channels; and
• Present a clear and consistent picture of roles and expectations.

2. Clear Communication

Transparency is key. Employers must:

• Clearly communicate details about job positions, terms, and conditions;
• Provide accurate information about responsibilities, salary, benefits, and the work environment; and
• Set realistic expectations to build trust and avoid misunderstandings.

3. Written Documentation

Documenting all aspects of the employment agreement inwriting is essential. Employers should:

• Outline job descriptions, salary details, benefits, and other terms clearly in employment contracts; and

Use written documentation as evidence to prevent disputes arising from verbal misrepresentations.

Conclusion

Preventing misrepresentation is critical to fostering a fair and transparent recruitment process. Employers who prioritise accuracy, transparency, and clear communication can reduce the risk of legal and financial repercussions. By adhering to Section 31 of Schedule 2 of the ACL, employers can build trust with prospective employees and maintain a positive reputation in the job market.

How can Sharrock Pitman Legal help?

If you are an employer and believe you may have made a misrepresentation during recruitment, or if you want to avoid future claims, contact us today. Alternatively, if you are a prospective employee and believe you have been misled during recruitment, we can assist you.

Contact our Employment Law team on 1300 205 506, by email sp@sharrockpitman.com.au or complete the form below to get started.

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The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. For advice tailored to your specific circumstances, please consult one of our qualified lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.‍