Legal Considerations In Employment Screening

1
Legal ConsiderationsIn Employment Screening

• Anti-Money Laundering and Counter Terrorism
  Financing Act 2006
• Privacy Act
• Occupational Health and Safety Act
• Human Rights and Equal Opportunity Commission
  Act
• Discrimination in employment on the basis of
  criminal record
• Case Law

2
Macken J, Industrial Commission of NSW1979 AR
72 at 79

• No man or woman upon entering into anemployment
  contract thereby agrees to forgothose basic
  civil liberties which distinguish our society
  from more barbarous regimes.

3
Relevant Legislation

• Anti-Money Laundering and Counter Terrorism
  Financing Act 2006 (AML CFT Act)
• Privacy Act 1988 (Cth)
• Occupational Health and Safety (Commonwealth
  Employment) Act 1991 (Cth) (OHS Act (Cth))
• Occupational Health and Safety Act 2000 (NSW)
  (OHS Act (NSW))
• Disability Discrimination Act 1992 (Cth) (DDA)
• Human Rights and Equal Opportunity Commission Act
  1986 (Cth) (HREOC Act) and associated
  regulations

4
Anti-Money Laundering andCounter Terrorism
Financing Act 2006

• From 12 December 2007 employers who are subject
  to the AML and CTF Acts are required to take
  specific measure to comply with the Act,
  including implementation of
• Employee Due Diligence Program screening,
  monitoring and managing of existing or
  prospective employees
• Risk Awareness Training Program

5
Legal Ramifications for AML CTF Act

• The employee due diligence requirements raise a
  number of potential legal issues including
• Consideration regarding privacy of information
  collected and basis of decisions in respect of
  employment when screening prospective employees
• Consideration regarding privacy of information
  collected and basis of decisions in respect of
  promotion/transfer when screening existing
  employees
• Management of employees who fail to comply with
  AML and CTF program
• Potential termination of employment in connection
  with AML and CTF

6
Privacy Act 1988 (Cth)

• The Privacy Act regulates the collection, use,
  disclosure, quality and security of personal
  information and it includes special rules about
  handling of sensitive information by private
  sector organisations

• Personal Information
• Information about a person who can be identified
  from the information.
• This can include
• Name
• Date of birth
• Address
• Telephone number
• Family members

• Sensitive Information
• Sensitive information means information about a
  persons
• health and genetics
• racial or ethnic origin
• political opinions
• membership of a political association
• religious beliefs or affiliations
• philosophical beliefs
• membership of a professional or trade association
• membership of a trade union
• sexual orientation or practices
• criminal record

7
Privacy Act 1988 (Cth)

• The Information Privacy Principles (IPPs)
  apply to handling of personal information by
  Federal and ACT public sector agencies
• The National Privacy Principles (NPPs) apply
  to certain private sector organisations

8
The ten NPPs are
9
Proposed Law Reform

• Unified privacy principles
• Removal of small business exemption
• Removal of employee records exemption
• Provide statutory cause of action for invasion of
  privacy
• Definition of sensitive information be changed to
  include certain types of biometric information
• Other changes
• Voluntary Information Security Breach
  Notification Guide - under this guide, an
  information breach occurs when personal
  information is exposed to unauthorised access,
  use or disclosure as a result of a breach of an
  organisations information security procedures

10
Occupational Health and Safety Acts(Commonwealth
New South Wales)

• Proposed changes may affect the ability of
  employers to seek access to genetic information
  for OHS reasons. The proposals would permit
  screening for
• Work-related susceptibilities
• Genetic monitoring for workplace-induced disease
• Genetic screening for protection of third party
  safety
• Genetic information collected at pre-employment
  medical assessment would be covered by the
  proposed changes

11
Human Rights and Equal Opportunities Commission
(HREOC) - Criminal Record Checks

• Some professions and occupations explicitly
  prohibit by law the participation of persons with
  certain criminal records
• Even when there is no explicit limitation on
  hiring a person with a criminal record, employers
  may perceive that those persons pose a higher
  risk of dishonesty, unreliability,
  irresponsibility or undesirable character
• There is no duty on an employee to disclose, if
  not asked
• Generally prudent for employers not to ask
  prospective employees about any irrelevant
  criminal record that they may have

12
HREOC Considerations

• Spent convictions schemes
• Allow criminal record checks to be amended to
  remove references to some offences after a period
  of non-offending
• Exceptions to Scheme
• Sex offences
• Working with children

13
Case Law

• Smith v State Bank of New South Wales Limited
  2001 FCA 946 (20 July 2001)
• Where it was held that the Bank had a duty of
  care to take reasonable steps to enquire about
  the background of staff or representatives
• Ffrench v Sestili 2007 SASC 241
• In this case, the employer was found to be
  vicariously liable for the employees theft of a
  clients money

14
Examples (USA)

• Well-established, global practice in the USA
• Twin doctrines of negligent hiring and negligent
  retention
• An employer may avoid liability for the negligent
  or unlawful conduct of an employee if an
  appropriate check were performed

15
Contact

• Peter Hodges
• McLachlan Thorpe Partners
• Level 21, 1 Castlereagh Street
• Sydney
• Tel [phone] - Fax [phone]
• p.hodges_at_mtpartners.com.au