Checking out possible new employees can be confusing. Employment and privacy laws put limits on what an employer can do.

An employer who goes outside those limits may face action under the Privacy Act, and even be liable if they harm the job applicant – whether they get the job or not.

I am commonly asked what an employer can do if they hear something unfavourable about a job applicant. Can you use that information in deciding whether to hire? Does it matter if you asked a question to get that information?

Deirdre, owner of a gift shop, recently asked me about this. She had just interviewed a person we’ll call Mary when one of her customers came in, passing Mary on her way out.

“You’re not thinking of her!” was the opening comment, and she continued “She’d be hopeless in here. When she worked next to my work, she was always late, and hopeless with figures.”

Looking later at Mary’s list of referees, Deirdre noticed it didn’t include her current employer, a friend of Deirdre, but did include a previous employer whom Deirdre didn’t know. Deirdre wanted to ask her friend about Mary, as she thought she’d get a more honest response than if she asked a stranger. Could she do this, and should she have quizzed her customer for more information about Mary?

The comments from Deirdre’s customer are not subject to the Privacy Act, which doesn’t apply to unsolicited information. Deirdre did not collect the information by her actions. It would be different if she had pursued the topic and asked for more. For what it’s worth, she can use the comments in making her decision.

What about Mary’s referees? Deirdre can contact people Mary has authorised her to contact, including people she has listed in discussion or as referees in her CV or on a job application form. If Mary provides a written reference, Deirdre can (and should) check that the person it purports to be from actually wrote it.

When speaking to the referees, Deirdre must limit questions to topics that are necessary and relevant to Mary’s potential employment, and take care not to ask questions that might be seen as discriminatory. She should tell the referee that the information is being given in confidence.

Mary doesn’t have to name her current employer as a referee. But if Deirdre wants to talk to that person, or anyone else, she can ask for Mary’s permission. If Mary won’t give it, Deirdre can ask why. There may be a good reason for the refusal, but if there isn’t the employer can factor this into the decision.

To avoid any confusion, Deirdre should ask Mary to give a written consent. Large firms use a consent form. This written authority should authorise referees to disclose information to Deirdre that they consider relevant to Mary’s suitability for employment at Deirdre’s business. Deirdre can send the form to the referees she contacts. Once Deirdre has collected information about Mary, she has to keep it confidential. Mary can request access to it under the Privacy Act, but if the information is “evaluative material” under the Act’s definition, she won’t be entitled to it. Deirdre can retain information about Mary for only as long as she needs it, and doesn’t have to keep any record of the information she had.

Employers aren’t obliged to give references, and many don’t. But if they are authorised referees, they can disclose any true, relevant information, favourable or not. In the language of Deirdre’s little shop, when an applicant names someone as referee, it’s a buyer-beware situation.

By Penelope Ryder-Lewis, first published in The Dominion Post

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