Four important legal issues that employers need to consider before the commencement of employment.
Most of the legal obligations in the employment relationship begin when a staff member comes on board and end with their resignation or termination. But the time before and following employment is hardly a legal black hole. There is a range of obligations HR needs to be aware of that regulate conduct before a prospective employee begins.
In the hiring process, employers should pay careful attention to accuracy when advertising a role. It may be tempting to portray a position in the best possible light, but this may not only anger the new employee when they are actually doing the job, it may be in breach of the law. Both common law and Australian Consumer Law prohibit misleading and deceptive conduct in the pre-employment setting. The former offers remedies depending on the severity of the misrepresentation and the existence of intent, ranging from prohibition on enforcing the contract to damages. The latter says in statute that an employer can’t mislead prospective employees as to “the availability, nature, terms or conditions of the employment” or related matters. If they do, penalties can be hefty.
In Moss v Lowe Hunt & Partners, a consultant was seduced away from his own business and into a full-time position with a client. Moss initially resisted the overtures, but an attractive salary and guarantees about the company’s success persuaded him. The business, however, was not successful. As the judgement began: “This case is all about adjectives.” Was it misleading or deceptive to describe a business as “successful” when, but for the support of a troubled parent company, it would be insolvent? Justice Katzmann held it was, and awarded $306,740 in damages.
Candidates also have an obligation to be honest in the hiring process. The law isn’t as clear in this area, but it’s widely accepted that lying in a job interview represents a legitimate ground for firing an employee.
In such cases, an employer can terminate the contract and sue for damages (if any are suffered), and use it as a defence in a subsequent unfair dismissal application. In Jacques v McCarroll Motor Group, a trainee mechanic said he had “around six modules to complete” and that he would do so quickly. Almost a year later, it emerged that the trainee had 14 modules remaining. He lost his unfair dismissal case.
Many anti-discrimination laws apply to both prospective employees and employers. In the hiring process, anti-discrimination laws often have a direct impact. It’s unlawful to discriminate on the basis of age, disability, race, gender, sexual orientation, pregnancy, family responsibilities and a range of other attributes. If an employer doesn’t hire someone because they are the parent of a young child and they are concerned about their likely responsibilities, it would be unlawful discrimination. There are, however, exceptions where a certain attribute is an inherent requirement of the job.
The applicant could bring claims either via discrimination legislation, which requires conciliation before the Australian Human Rights Commission (AHRC) before legal proceedings can begin, or under the Fair Work Act’s adverse action provisions. The latter can be more favourable to the applicant, as the employer is required to prove the prospective employee was not “not hired” because of the protected attribute, but for another legitimate reason.
A notable form of discrimination concerns criminal records. In CG v RailCorp NSW, the AHRC investigated after an applicant was not hired for a market analyst position on the basis that he had two drink driving convictions. The AHRC found that driving or safety matters were not relevant to the inherent requirements of a market analyst position, and that RailCorp had therefore discriminated against CG.
While the Privacy Act 1988 exempts records relating to past and present employees, this doesn’t apply to unsuccessful candidates. Any records held about applicants – which is a common practice, together with the line “we will keep your application on file for any future opportunities that may arise”– must be held in accordance with the Australian Privacy Principles, if the organisation falls within the Principles’ scope. An unsuccessful applicant may be able to request a copy of all records held in relation to them, and can reasonably expect their records to be kept secure.
This article originally appeared in the March 2018 issue of HRM magazine.
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