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Checking a candidate's criminal record

  • 01 July 2008
  • By Commercial Motor

Many posts in business are highly sensitive due to the type of services provided and the information handled. Personnel departments are used to avoiding the pitfalls of discrimination law in job interviews, but events amply demonstrate the need to safeguard the hiring processes for other reasons. And all the intellectual property rights in the world will not protect the business from a crook, no matter how well-crafted.

The current law: little to go on?

How does the law currently treat someone with a criminal history? The Rehabilitation of Offenders Act 1974 allows people convicted of criminal offences, once enough time has elapsed, to avoid disclosing convictions. Depending on the crime's nature, the conviction is then 'spent'. Some sentences, such as 'imprisonment for life', can never be spent.

Once a sentence is spent, the convicted criminal becomes known as a 'rehabilitated person'. If the prospective employer then puts questions about past convictions in interviews or requires the filling out of an application form, they can be answered on the basis that there is no need to refer to a spent conviction. In other words, the candidate will not be liable for a failure to disclose spent convictions.

A spent conviction or a failure to disclose it are not automatically proper grounds for dismissing or excluding a person from employment. Contracts should, therefore, include an express term to this effect.

The only occasion a spent conviction is a proper ground for refusing to recruit somebody is when the job falls within a category to which the 'Exceptions Order' applies. These include doctors, nurses, midwives, dentists, barristers, solicitors, accountants, teachers and police officers. There is also a specific exception for those dealing with children.

One further exception under the Financial Services Act 1985 is that, in certain circumstances, convictions for offences will not be spent where they relate to fraud or dishonesty or insider dealing or other such financial services offences.

To prevent abuse, it will be a criminal offence to tamper with a certificate, or impersonate the person to whom it relates. It may also be an offence for an employer to disclose such information following an application.

In some cases, employers will be able to take advantage of the Criminal Records Bureau, which provides wider access to criminal information to help employers in the public private and voluntary sectors identify unsuitable candidates, particularly where it involves working with children or the vulnerable.

Separately, in collating information about a candidate and assessing suitability, employers will need to act in accordance with the Data Protection Act 1998 and related guidance issued by the Information Commissioner. This legislation places responsibilities on the employer to process personal data in a fair and proper way, with a very broad meaning applying to both 'process' and 'personal data'. A failure to do so would ultimately lead to a criminal offence being committed.

See's Hot Topics page on data security for more information.

Probationary periods: panacea or pitfall?

Employers may consider using probationary periods, during which they can observe the employee's performance. However, even though the requirement of two years' continuity of service means that most if not all probationers will not be protected from unfair dismissal, an individual may still bring claims if dismissed without cause. The courts can look to see whether procedural steps within the terms of the contract would have had a different result or extended it.

Also, if the manner itself of the dismissal might give rise to a stigma, which will damage the individual employee's future employment prospects, that in itself could give rise to a claim.

The label of 'probationary' should, therefore, be handled with care.

References: say all or nothing?

An employer is not required to provide a reference for serving or past employees, unless there is a term to that effect in the employment contract. However, the courts may imply just such a term in order to give the contract "business efficacy". In certain walks of life, such as in the financial services and other regulated sectors, the notion of who is a fit and proper person is particularly at issue and the courts have been ready to imply such a term.

As to an outgoing employee, an employer obviously needs to avoid any defamatory or inaccurate reference where there may be a claim for negligent statements. The argument is that the employee has relied upon the former employer's skill and judgement in giving such a reference. Clearly, an employer who recruits a 'bad apple' may have a remedy against a former employer who gave a misleading reference.

In addition, a former employer who knowingly makes a false statement will be liable for deceit if a subsequent employer suffers loss as a result of relying upon it, although this is rarely involved.

Where it is clear that the prospective employer seeking a reference trusted the outgoing employer, given their knowledge, to exercise care and make statements knowing they would be relied on, there might be a claim for negligence.

There may be a real issue, however, over showing the cost of the damage caused. For example, would it mean the cost of a replacement employee, or any damage such as losing preferred supplier status? Traditionally the courts have been reluctant to allow pure economic loss to be recovered.

Even if a former employer attempts to give a 'disclaimer', such a disclaimer may still be subject to the Unfair Contract Terms Act 1977 and, therefore, not limit liability effectively. Nonetheless, in practical terms, the disclaimer whether valid or invalid will greatly detract from the value and weight of any reference.

Many aspects of business deal with the allocation of risk. But these often relate to technical and systemic failure or unforeseen events. In the personnel context, preventative steps are essential to minimise the chance of security breaches, fraud and disruption. Anybody involved in hiring staff should check their procedures to ensure every opportunity is taken to do so.

Jonathan Exten-Wright is a partner in the employment department of the international law firm DLA Piper.