Checking references when recruiting a new employee

by The Findlaw Team

When an employer is hiring a new employee, it’s important to carry out reference checks before confirming an offer of employment.

Many employers also carry out other checks, such as criminal record checks, immigration status, and confirmation of qualifications (eg requiring the employee to provide original certificates for qualifications and/or licences they claim to possess).

It’s common practice for job offers to be conditional on satisfactory references and checks.

Does an ex-employer have to provide a reference?

Under New Zealand law (section 120 of the Employment Relations Act 2000), an employer must provide an employee with reasons for a dismissal if requested by the employee, and that request is made within 60 days of the date of dismissal. The statement must be provided within 14 days of receiving the request.

There is otherwise no requirement on an employer to provide a reference to an employee. However, an employee may often seek or be offered a reference as a part of a settlement of a personal grievance.

Having said that, someone who is looking for a job is likely to select referees who they think will be willing to provide them with a positive reference. It is common practice for the job seeker to check first that the people they choose are willing to act as a referee. Where the referee is someone from the job seeker’s current employment, they may hold off asking them to act as their referee until they have a definite offer of employment.

Written references

The practice of issuing past employees with written references has declined and many employers have clear policy forbidding this practice.

At a personal grievance hearing, it can be quite difficult to contend with being confronted with a glowing reference written by one of your staff, pertaining to the grievant you have dismissed for some act of misconduct.

Furthermore, prospective employers should never rely on a written reference without checking the validity of the content with the person who wrote it, and the authority of the writer to provide written references on behalf of the employer.

Telephone references

It is highly recommended that employers always carry out telephone reference checks when appointing a new employee.

Telephone reference checks serve two purposes:
  • They are used to check accuracy of information provided on the application form; and
  • They provide added insight into the work habits and compatibility of the applicant with other workers, customers or clients, which can be difficult to discern at an interview.

A negative response from one employer should not cause the recruiter to disregard the applicant, but if there are negative responses from several employers, that’s a different matter.

Privacy

Under the Privacy Act 1993, authorisation from the individual concerned is required to access or release personal information about that individual, which is held on file or derived from information so recorded.

Accordingly, the person seeking the reference must have the authority of the applicant to do so. In providing this authorisation, the applicant must also be informed of the nature of the information being sought, and the use to which it will be put.

Permission to contact referees should be sought from the applicant during the interview, and can be given in writing using a pro forma authorisation form (often included in job application forms).

Criminal record checks

Some employers carry out pre-employment criminal record checks on prospective employees, particularly for positions of trust or authority, or jobs where employees will be working with vulnerable clients, such as children or the elderly.

A criminal record check can only be carried out with the written consent of the job applicant, in accordance with the Privacy Act 1993. An employer can request a copy of someone’s criminal record, but only if that person completes and signs the Ministry of Justice’s form (Priv/F2) (available at justice.govt.nz/services/criminal-records), including section 1 of the form which gives authority for information to be released to a third party.

Many job application forms ask whether the applicant has any convictions or pending criminal charges. If a criminal record check is to be done, it is a good idea to notify job applicants by including a statement on the form.

Under the Criminal Records (Clean Slate) Act 2004, job applicants with only certain minor convictions that didn’t result in a prison sentence do not have to declare their criminal record 7 years after their last conviction. If a criminal record check is carried out, any convictions covered by the clean slate scheme will be concealed.

Immigration status

Employers should check the immigration status of new employees. Under the Immigration Act 2009, it is an offence to employ someone knowing they are not entitled to work in New Zealand. Merely “not knowing” a person was not entitled to work is not a defence.

Employers should therefore take “reasonable precautions” and exercise “due diligence” to find out whether the person is entitled to work. This could involve checking the person's passport and taking a copy of the passport and any relevant visa for the record. Immigration NZ has an online database to help employers check the status of prospective employees before offering them a job. It is called VisaView and employers must register first to use the database.

Case examples: Negligence for inaccurate reference

The UK case of Spring v Guardian Assurance plc (1994), is the leading case on the duty of care when employers provide employment references for former employees.

When a potential employer asked the company for a reference for Spring, the company alleged that he was selfish, lacked team spirit, lacked honesty, was in debt to the company and was incompetent. As a result of this damaging reference, Spring did not get the job.

The Court found that the reference was inaccurate and it was held that an employer who supplies an inaccurate reference can be liable in negligence to the person for whom it was supplied.

Case example: Privacy

A job applicant had provided a written reference and also nominated several other referees to a prospective employer. The employer phoned all the referees and also the person who had given the written reference.

The woman complained to the Privacy Commissioner that contacting the person who had given her a written reference breached her privacy (she didn’t get the job). However, the Commissioner felt that the purpose of providing the written reference was to allow the employer to assess her suitability for the job. Contacting the person who wrote the reference and telling them she had applied for a job was directly related to this.

Case note 19740 [2002], Office of the Privacy Commissioner.

Case example: Starting work before checks completed

A man was offered permanent work after initially working for the company through an agency. He completed an application form that advised “You should ensure that the information you provide is entirely accurate. The provision of false information is grounds for dismissal if your application is successful”. He answered “No” for the question “Have you ever been convicted of a criminal offence?” and signed a declaration that the information given in the form was “true to the best of my knowledge”. The job offer was conditional on medical and drug tests and criminal record checks.

The company did not apply to the Ministry of Justice for a criminal record check until a week after the man started his permanent job. The check revealed five convictions, the last of which was for wilful damage for which he received a suspended sentence. The company dismissed the man for misrepresentation of personal information.

The Employment Relations Authority determined that the company was entitled to invoke the expressly conditional nature of the employment. It acted as a fair and reasonable employer would have done in the circumstances and the dismissal was justified. The Authority noted that since this case, the company had found it safer not to offer employment until it had received a response from the Ministry of Justice about criminal convictions. However, the Authority said that no criticism could be made of the company's preparedness to trust a job applicant to give the correct information and allow the person to begin employment without delay. Trust is required to be a foundation of any employment relationship.

Bourne v Carter Holt Harvey Ltd (2011)


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