UK: Employers Steal The March On Dishonest Employees

The statistics are well documented. Thefts by staff cost UK businesses 100's of millions of pounds. But employers, it seems, are increasingly galvanised in efforts to reduce the alarming statistics. A register of suspected culprits or dishonest employees is one of the latest, if controversial, UK initiative to be announced.

Could it be that, come December, we will look back at 2008 as a year in which there was something of a backlash by employers, their tolerance of inadequate or inaccessible information about dishonest staff having finally come to an end?

A register of dismissals

As the law currently stands, unless an individual has a criminal conviction or caution for theft, a prospective employer has no means of discovering such conduct, other than exceptionally via employment references. Recently, plans were announced for an employer crackdown on staff who are caught stealing, or committing forgery or fraud, were announced by Action Against Business Crime (AABC). The National Staff Dismissal Register (NSDR), as it will be known, is due to be launched any time now.

The register will contain details of employees who have been dismissed for acts of dishonesty or who have left employment whilst under investigation for such conduct. Employers who subscribe to the register will be able to search against the names, addresses, national insurance numbers and dates of birth of prospective employees for any entry against those details. Records will be retained for five years.

This idea already appears to have been popularly received by some employers. Retail bosses in particular are seemingly keen to participate in the compilation and use of the register, amongst them many house-hold name businesses.

A data protection minefield

The advantages to employers of accessing information via the register, which would not otherwise be readily available to them are clear. What is also clear is that such a database will be subject to the provisions of the Data Protection Act 1998. This Act provides a framework governing the sort of information that can be lawfully collected and the circumstances in which it can be communicated. Information regarding the commission - or alleged commission - of an offence falls in to a category of information known as "sensitive personal data" and will only usually be disclosable with the express

consent of the individual and in certain tightly-regulated circumstances. NSDR and those contributing to it will therefore either need to obtain the ex-employees' express consent to disclosure of their personal details or be able to establish that the need for such consent is overridden by the need to protect the vital interests of a prospective employer - a difficult argument to support.

Key data protection principles of the Act are that information is kept securely, is accurate and is only retained for so long as is necessary. The ex-employees concerned will have the right to view personal information held about them and to insist any inaccuracies are corrected. A vital aspect of the Act is the importance of an individual's awareness of what information is held about them and the purposes for which that can be used. Obtaining the individual's consent is desirable in most circumstances and necessary in others. A right of objection is also available, enabling the individual to prevent retention or disclosure of personal information if this is likely to cause damage or distress which is unwarranted. Compensation will be payable to those who establish that incorrect information posted on NSDR caused them damage, for example due to withdrawal of a job opportunity. Additional compensation may also be available where the error causes distress.

From a data protection perspective, NSDR presents many practical and legal challenges, both of which leave employers potentially exposed if the information they provide breaches their data protection obligations and/or is wrong. An added risk is that they may be exposed to costly defamation actions.

AABC claims to have consulted the office of the Information Commissioner regarding NSDR. It seems likely that a more public expression of his views will now be called for in respect of this project.

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