Merv Saltmarsh ARTICLE
ENSURE SERVICE CONTRACTS STACK UP
Some THA members may have been approached by employment relations firms, offering workplace relations advisory services on a retainer basis. These firms apply the “hard sell” and may even claim to offer a superior service to that provided by industry associations. Beware of the sales pitch and ensure you carefully consider the service offering before signing any agreements, which may be both expensive and difficult to get out of. ACCC alleges Employsure misleads consumers One employment relations company active in most states including Tasmania is Employsure. The Australian Competition and Consumer Commission (ACCC) is alleging that Employsure; • Misled small business operators into believing it was the Fair Work Ombudsman or the Fair Work Commission (or was connected to them) • Lured businesses with the promise of free industrial relations advice and • Used “high pressure sales tactics” to encourage small business operators to enter into long-term contracts, costing thousands of dollars each year. The ACCC is also pursuing Employsure for unconscionable conduct in relation to businesses which signed multi-year contracts worth up to $6,500 per year. The ACCC alleges that from November 2016 to at least October 2018, Employsure's contracts contained unfair terms, making it difficult for small businesses to exit the contracts. The ACCC alleges that the contractual terms: • Increased prices without the consent of the small business operators • Did not provide for early termination and • Penalised customers who did not pay instalments on time, by making the business pay the entire contract amount immediately. The ACCC has said "Employsure contracted employers for lengthy periods to pay for services they had not sought and did not need, many of which were available free of charge from other providers…" The ACCC also alleged that Employsure customers "suffered distress and frustration as a result of the unfair sales tactics, contractual obligations they assumed and the difficulties in terminating the contracts." The ACCC prosecution follows a New South Wales Supreme Court ruling that a client of Employsure was not required to pay the balance of its $18,000, five-year contract. The client, which operated in the hospitality industry, had sought to terminate the contract after eight months. The contract required the client to pay $300 a month for five years, ($18,000 in total) and expressly if there was "no provision for early termination". Further, the contract provided that "failure to adhere" to the monthly payment requirements "will result in the total balance outstanding becoming payable immediately in full". When the client sought to terminate the contract Employsure took legal action, pursuing its client for payment of the balance of the five-year contract. The NSW Supreme Court ruled that the relevant clause was a "penalty clause" designed to "coerce performance" of the terms of the contract. Should any members have queries regarding similar arrangements contact myself on a confidential basis direct on 0407 869 924 or email merv@tha.asn.au Should members wish to discuss services provided within the membership packages feel free to contact Nick Roney on 0439 119 343 or email nick@tha.asn.au See Published Material https://www.accc.gov.au/media-release/employsure-in-court-over-misleading-advertising-and-unconscionable-conduct-allegations https://aat.org.au/AAT/News/NSW_Supreme_Court_has_ruled_an_Employsure_contract_is_not_en forceable.aspx
12 enquiries@tha.asn.au 03 6220 7300
Hospitality Review
Made with FlippingBook - professional solution for displaying marketing and sales documents online