Jul

19

Promises and Representations to Employees

Posted by

It is not uncommon for employers at interviews to discuss and make representations to the prospective employees. A usually natural part of any interview includes discussion on future prospects for the employee with the employer which helps lure the prospective employee. It is important that employers do not make false representations when discussing such matters.

 

Trade Practices Act 1974

Section 53B of the Trade Practices Act, deals with misleading conduct in relation to employment, specifically provides “a corporation shall not, in relation to employment that is to be, or may be, offered by the corporation or by another person, engage in conduct that is liable to mislead persons seeking the employment as to the availability, nature, terms or conditions of, or any other matter relating to, the employment.”

 

Recent case law

In the recently heard matter of Robertson v Knott Investments Pty Ltd [2010] FMCA 142the applicant (a former employee) commenced proceedings in the Federal Magistrates Court alleging the company employer breached section 53B of the Trade Practices Act in that it mislead and deceived the applicant about the duration of the employment offered to him in 2007. Specifically, the applicant claimed that during negotiations prior to commencing employment the company made representations that the position would be for a minimum period of three years.

The court noted that for the applicants claim to be successful, he had to show the following:

  • that representations were made to the applicant about the length of his employment;
  • that those representations were misleading;
  • that the company had no reasonable grounds to make the representations;
  • that the applicant had relied on those representations;
  • that the applicant had suffered loss and damage because the representations were misleading.

The court found that the company had reasonable grounds to make those representations and that the applicant had not relied on those representations to leave his existing employment. Importantly the court noted that at the time of negotiating with the applicant the company was experiencing significant growth and it had no way of knowing that the global financial crisis was looming or that they would experience a negative impact on their business which would lead to making the applicant redundant. Effectively while the company indicated that the position for the applicant was a permanent one, this was not the same as saying that the applicant could have the position permanently.

 

Conclusion

Whilst the applicant in this matter was unsuccessful, it is a timely reminder for employers to exercise caution in interviewing and negotiating with prospective employees. In particular, employers should not make representations that are misleading, or that the employer knows or should know they are not able to satisfy.

Ferguson Cannon Lawyers have extensive experience in advising employers on all aspects of Employment Law and Human Resource matters. Please contact Tony Pattinson, Director, if you require any assistance or visit our website for further information.

Tags: , , , , , , ,

Category: Employment Law, Fact Finders, General

Comments are closed.