Employers are entitled to conduct pre-employment checks, but make sure you’re doing them in a way that doesn’t breach a candidate’s privacy.

It is trite to say that hiring a suitable and qualified employee is important.

In large part, this is often achieved by conducting thorough pre-employment checks.

However, employers are often unaware of the privacy issues involved with conducting pre-employment screenings.

These issues can extend to the types of pre-employment checks which can be conducted and the information which can be obtained by an employer from such pre-employment screenings, through to authorised or unauthorised uses of such confidential and sensitive information as set out in the Privacy Act 1988 (Cth) (“Privacy Act”).

As well as avoiding potential legal pitfalls, it’s important for employers to be aware of their obligations to also ensure best practice management of recruitment processes. 

Why must employers be mindful of privacy?

Pre-employment checks are often conducted by employers at various stages of the recruitment process.

However, most commonly, screenings are conducted before employment has been offered or commenced.

In many circumstances, the types of checks required by the employer will have been identified in the job description or the employment contract.

Such checks include, but are not limited to, psychological, medical and functional assessments, review of a candidate’s employment history, credit and criminal history, as well as their use of different social media platforms. 

Employers must be mindful that these pre-employment checks can be intrusive and invasive to potential employees.

They must also be wary of the confidential nature of the information disclosed by prospective employees and ensure such checks are being handled with due care so as to avoid placing the employer at risk of breaching the Privacy Act.

In particular, correct collection, use and handling of personal information is critical to ensuring compliance with the Australian Privacy Principles (“APP”).

The APP sets out the rights and obligations for the collection, use and storage of private and confidential information, which covers most information that employers will obtain from prospective employees. Non-compliance with the APP can result in complaints, regulatory action, compensation and penalties. 

While not all employers will be required to comply with the APP, all employers should aim to comply as a matter of best practice.  

Compliance with the APP can also protect an employer from an adverse action claim pursuant to the Fair Work Act 2009 (Cth), or from a discrimination claim pursuant to Commonwealth or State anti-discrimination legislation, arising from an employer’s inappropriate use of pre-employment information to discriminate against a prospective employee and reject their application on that basis. 

Legal pre-employment checks

The Privacy Act neither expressly prohibits pre-employment checks, nor lists pre-employment checks which are permissible under law.

Rather, employers must ensure pre-employment checks which are conducted comply with the relevant APP and, importantly, are actually required for the advertised position (e.g. all teachers will be expected to undergo a working with children check before commencing employment). 

Nevertheless, employers are considered to have a legitimate interest in performing the following (non-exhaustive) checks as long as they are within reason and necessary for the performance of the position advertised:

1. Academic record
2. Character reference
3. Credentials
4. Credit history
5. Criminal history
6. Employment history
7. Medical screening
8. Passport check; and
9. Psychological screening

Although there is no express prohibition on asking a candidate to disclose information regarding their criminal background or medical history, employers must ensure that they obtain consent from the candidate before such information is obtained and that the information is reasonably required.

Otherwise, not only may the request be in breach of the APP, but employers may also be exposed to complaints of discrimination in the event that the request is not reasonable in the context of the job that has been advertised.

Of course, even where consent is obtained, employers must still be vigilant of potential discrimination complaints associated with such checks.

Accordingly, employers should exercise caution in conducting pre-employment checks and only use them to the extent necessary. 

Practical tips for employers

Given the potential issues that can arise and having regard to the obligations under the APP, employers should bear the following non-exhaustive matters in mind when seeking to conduct pre-employment screenings:

1. Candidates should be made aware of all required pre-employment screenings at the earliest date possible. This can either be made available at the time the job is advertised or at the time of the first interview
2. Pre-employment screenings which are conducted must be reasonable and reasonably required to ascertain the suitability of a candidate for the role set out in the job position which has been advertised
3. Employers must maintain the confidentiality and sensitivity of information obtained during the pre-employment screening process and ensure that such information is not divulged in an unauthorised manner which is contrary to the APP
4. Employers must ensure information obtained in the pre-employment screening process is not misused
5. Employers should develop a best practice policy which covers the collection, use, protection and storage of pre-employment information
6. Employers should be particularly cautious in relation to the collection and use of sensitive information concerning a candidate’s medical, criminal, racial and religious background
7. Employers should adhere to the APP during the pre-employment screening process.

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Amy Zhang is an executive counsel and team leader at Hamers Workplace Lawyers.