Australia: Pre-employment screening can help you avoid hiring the wrong candidate

In brief - Make sure your screening process complies with national and state laws

Prudent employers can conduct checks of a candidate's references, qualifications, police/criminal background, litigious conduct and credit history prior to making a job offer. However, it is important to ensure that your screening process complies with the Australian Privacy Principles, anti-discrimination legislation and state laws.

What is pre-employment screening?

Pre-employment screening (PES) is a due diligence process conducted by vigilant employers prior to making a job offer to a potential candidate. The process is essentially an investigation conducted by an employer with a view to verifying a job applicant's background and the validity of his/her skills, qualifications and experience as asserted in their job application.

Why conduct pre-employment screening?

Hiring the wrong candidate can lead to a plethora of future problems for an employer, ranging from minor issues such as wrong fit or inadequate performance (resulting in a short lived employment relationship and repeated recruitment costs), to more serious problems such as fraud, damage to reputation or even litigation.

Furthermore, given the protections now available to employees, it is especially beneficial to be aware of any of these potential problems prior to making any job offer.

Information uncovered during background checks can include:

  • Historical job commitment (or lack thereof)
  • Integrity of the candidate - were the alleged qualifications and experience claimed by the job applicant valid or misrepresented?
  • Litigation history - in a recent case where an employee made a vexatious claim against their employer, it was discovered that they had a history of making similar claims against previous employers

What screening processes do companies run?

  • Reference check - a standard reference check phone call will ordinarily provide a sincere and realistic view of a potential candidate
  • Qualification check - documentary evidence can be used to verify qualifications and accreditations quickly
  • Mandatory requirements - some jobs require mandatory checks specific to that role. However, nearly all jobs will require an employer to ensure that a job applicant has a legal right to work in Australia
  • Police/criminal background check - will disclose the existence of a criminal record
  • Civil/criminal litigation check - by conducting a public case law search, you may uncover a history of litigious conduct or previous contractual breaches that have the potential to harm your business
  • Bankruptcy and credit history checks can give a useful indication of a candidate's levels of responsibility and reliability
  • ASIC Register - a quick search of the ASIC Register will disclose whether someone has been deemed a banned/disqualified person

Obtaining consent from the candidate prior to conducting searches

Any employer or business intending to conduct PES must be aware that legal and ethical considerations apply both prior to conducting any searches and when taking any information uncovered into account in making your decision on the successful candidate.

First and foremost, consent from the candidate should be obtained prior to conducting any searches. This might be included on a job application form or requested following an interview, for example.

Complying with the Australian Privacy Principles

Secondly, issues surrounding data protection, privacy and discrimination need to be addressed. The privacy element is especially important considering that changes to privacy laws in Australia were implemented in March 2014.

The new Australian Privacy Principles require an individual about whom information is being collected to be informed of certain things, such as the fact that the information is being collected and who is collecting the information. For more information see the website of the Office of the Australian Information Commissioner.

Complying with Australian anti-discrimination law

Another important issue to bear in mind when conducting (or considering) PES checks is Australian anti-discrimination law. Of particular importance is the Australian Human Rights Commission Act 1986, which applies to employers and employees concurrently with state and territory legislation.

Where the discovery of a criminal record results in a person being discriminated against because of that record (including circumstances where a job applicant is refused employment where a criminal record is revealed), a company may leave itself open to discrimination claims.

An exception arises where the conviction in question would impact directly on the job. However, it must be noted that some state-specific variations do arise in state anti-discrimination statutes.

The Australian Human Rights Commission has developed a set of guidelines that can provide assistance to employers in navigating their way around this issue.

The same applies to a dismissal for discovery of a conviction. However, where an employee has misrepresented himself or herself during the recruitment process, there may be cause for termination.

What happens when the screening process uncovers unfavourable information?

Should a PES check produce a result that gives you any reason for concern, it is advisable to discuss its relevance to that role and/or your potential liability in the event that you need to refuse a candidate based on same with your lawyer.

He/she can also assist in determining the legality of any PES policy that you may have in place. Due to the variations in state laws, local guidance in this regard can be particularly beneficial.

Kristen Lopes Greg McCann
Workplace relations
CBP Lawyers

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