The NSW Supreme Court recently ruled that industrial relations service Employsure could not enforce a contract that locked an employer into a five-year deal for employment services.
The Supreme Court ruled that the employer would not have to pay the claimed monies, and also ruled that Employsure should pay its customer’s legal costs.
Employsure sued the customer after it attempted to quit the five-year contract after eight months, owing Employsure $18,463.
The employer had purchased a bundle of workplace advisory services including an assessment of terms and conditions of employment, supply of continually updated employment documentation and access to a 24/7 year-round advice line service along with insurance for defending workplace relations claims.
The employer was locked into a five-year unbreakable contract term for $18,000 plus GST, with payment to be made in 60 monthly payments of $300 plus GST.
The contract provided that failure to stick to the payments would “result in the total balance outstanding becoming payable immediately in full.”
It is a long-standing principle of contract law that such a penalty clause is void and cannot be enforced.
“The purpose of the clause is plainly to coerce performance of the contract by the plaintiff,” the Supreme Court said.
Fair Work Ombudsman statement on Employsure
In July 2017, the Fair Work Ombudsman released a statement on private firms and workplace advisory services, following complaints from members of the public who claimed they had been misled into believing that private businesses were connected or affiliated with the Fair Work Ombudsman or other government agencies.
The Fair Work Ombudsman's (FWO) office advised they received complaints relating to a website at the address www.fairworkhelp.com.au and telephone advisory services operated by Employsure Pty Ltd.
In a written statement, the FWO advised they were not affiliated with any commercial providers of advisory or workplace relations service nor did they provide endorsements of any such providers.
The FWO also advised they never provided information about people who contacted them to third party businesses to offered fee-based services and did not cold call businesses to recommend or refer the service of any private advisory business.
If any business engages in conduct that misleads consumers about a connection or affiliation with the FWO, it is a serious issue and such conduct can be reported.
Should you wish to discuss this matter further, or wish to report conduct, contact Rebecca Cutler – Industrial Relations Manager on firstname.lastname@example.org.