The risks of uncovering an employee's criminal past


The risks of uncovering an employee's criminal past

What happens if you discover an employee has a criminal past? Tread carefully, warns Julian Arndt, or you may find yourself on the wrong side of the law.


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It's common for a business to uncover previously unknown information about an employee, even after they have been offered a job. But what happens when that new information involves a criminal past?

In one scenario, technology company Data#3, hired an IT specialist known as “Mr AW” on a salary of $185,000 salary in December 2013.

Less than a month later, following calls by one of its suppliers (who had viewed online news articles), Data#3 became aware that Mr AW had spent 2011 in home detention in New Zealand after being found guilty of selling drugs.

Following an investigation into this new information, Data#3 made a decision to terminate the employment of Mr AW, who was still in his probationary period.

Claim of discrimination

Following his dismissal, Mr AW made a complaint to the Australian Human Rights Commission (HR Commission) claiming that Data#3 had discriminated against him. In doing so, Mr AW claimed he should receive a payout of $135,362.50.

Data#3 argued that:
  • Mr AW’s criminal history was inconsistent with Data#3’s core values, particularly those of a senior employee.
  • Mr AW’s failure to disclose his past during the interview process amounted to dishonest conduct and this lack of good faith did not demonstrate Data#3’s core values.
The HR Commission found Mr AW had been discriminated against by Data#3 as his employment had been terminated because of his criminal past. 

In forming a view about the character of Mr AW, the HR Commission noted the comments of Mr AW’s NZ sentencing judge who described him as an honest and “worthy member of society”.

The HR Commission found that, despite “integrity, trust and credibility” being inherent requirements of his role, he was nevertheless able to comply with these inherent requirements, despite his chequered past.

HR Commission's recommendation

The HR Commission, which is not a court, does not have the power to make binding determinations.

It does have the ability to make recommendations and in this case it recommended that Data#3 pay Mr AW $76,000 in damages and lost earnings.

While Data#3 ultimately elected not to comply with this recommendation, the recommendation of the HR Commission and Data#3’s refusal received widespread media attention.

Things to remember

Depending on the information received, discovering that a current or future co-worker has a criminal history can be a distressing situation for some employees and organisations.

Despite the considerable emotional response that such a discovery can create, knowledge of an employee’s (or future employee’s) criminal past should be handled extremely carefully.

Regardless of any attempt by management to take the “moral high-ground”, employers must be aware that a criminal past is not necessarily a non-negotiable and that a zero-tolerance style attitude to criminal records invites a considerable degree of risk.

As was seen with Data#3, a finding by the HR Commission that an employer has breached an employee’s human rights can result in considerable unwanted publicity and huge legal cost.

Some states also have specific laws against discrimination on account of criminal history and employers who breach these laws may face binding legal sanctions.

Management responsible should have an understanding of the relevant principles. If an employee (or prospective employee) is found to have a criminal history which gives rise to any issues, a business should seek advice as to whether any state laws apply to the scenario and whether the criminal record can be linked to the inherent requirements of the employee’s role.

This assessment is not straightforward and should be done in a balanced and unemotional way.

If the situation is not handled carefully, an employer can risk an appearance at the HR Commission or potentially a prosecution under discrimination laws in some states.

If you have any questions about, or would like to discuss, this article please contact Australian Business Lawyers & Advisors.

See also

Criminal record: can we refuse to employ them?
'Public figure' dismissed for sexual assault of boy (This case write-up contains guidance from the judge about dismissing employees who have committed a crime)


This article was written by Julian Arndt, a senior associate with Australian Business Lawyers & Advisors. ABLA and WorkplaceInfo are both part of the NSW Business Chamber group of businesses.
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