A conviction and fine for advertising non-existent jobs highlights the risks associated with misrepresentation in recruitment, says an employment law specialist.

The Melbourne Magistrates Court last week fined the director of defunct training and recruitment business Keat Enterprises, Daniel Chung Keat Leong, for repeatedly misrepresenting itself as an employer, using bogus job ads to lure applicants to pay for its training courses.

Although the Keat case is a blatant example of misrepresentation in job ads, TressCox Lawyers partner Nick Duggal says recruiters and employers can also inadvertently expose themselves to risk, particularly when there is enthusiasm to "oversell a role to get someone across the line".

This can occur by stating in job ads that certain benefits might be available, such as novated car lease arrangements, and opportunities for promotion, he told Shortlist.

"Other than the terms of employment offered [such as their position, duties, and remuneration], I wouldn't be too specific about other benefits of employment that might arise," he says.

"Another area in which [claims have] arisen is where the [recruiter] has made representations in relation to the long-term viability of the role, and the employee has accepted it on that basis, and the role shortly thereafter has become redundant."

Recruiters and employers should record the fact that the candidate hasn't relied on any representations other than what is contained in the employment contract, Duggal says.

Even with such a clause, however, a recruiter should not think they have licence to make misrepresentations outside of the written contract, he says.

Both third-party recruiters and direct employers can be liable to claims of misrepresentation in job advertisements, he notes.

"Stick to the specifics of the position, don't overpromise what might happen in the future... and also make sure that any recruitment organisation on your behalf does the same."

Hidden costs misrepresented in job ads

In the Keat Enterprises case, Leong placed more than 20 ads on Seek and Gumtree between February 2013 and May 2014, receiving more than 9,500 applications before entering into voluntary administration in June 2014.

The Court found the majority of ads did not mention any costs involved for training courses, and where costs were mentioned, they were described as 'software licensing and CPA monitoring costs', according to Consumer Affairs Victoria, which brought the case against Leong.

"When the successful applicants attended an interview with the company, they were subjected to a marketing pitch and offered or sold positions in the training programs for fees between $2,000 and $3,000", it said.

Consumer Affairs Victoria had also successfully sued Keat Enterprises for $165k in April 2015, for more than 30 breaches of the Australian Consumer Law "including conduct likely to mislead job seekers and recent accounting graduates into enrolling in its courses", the regulator said.

Duggal says when an organisation is advertising both training and employment opportunities, there has to be a clear opportunity for employment at the end of the training.

"Now, most training course don't seem to operate that way. In this example, the representation clearly seemed to be that it was a job advertisement, but it wasn't – it was for a training course."

Daniel Chung Keat Leong – Consumer Affairs Victoria

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