Privacy law update - November 2002


Privacy law update - November 2002

From 21 December 2002, more small businesses will be covered by new private sector provisions in the federal Privacy Act 1988 (the Privacy Act). 


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More small businesses to comply with privacy law from 21 December 2002

From 21 December 2002, more small businesses will be covered by new private sector provisions in the federal Privacy Act 1988 (the Privacy Act). 

To date the only small businesses to be covered by the Privacy Act have been health service providers such as medical practitioners, pharmacists and gyms.


Privacy law is about: collecting only the information you need to complete a transaction; letting people know why you are collecting their personal information; and having procedures on how you will use it and ensuring you keep it secure.

Only a select number of small businesses will be covered from 21 December 2002:

  • health service providers
  • those that trade in personal information (recruiters)
  • those that are related to a larger business or are a contractor to Commonwealth agencies.

For further information see the Office of the Federal Privacy Commission website

Privacy commissioner advises on sale of business and employees’ privacy

The federal Privacy Commission has issued an information sheet on how the privacy legislation applies to personal information handled in the due diligence process on the sale of a business.

In some cases, this can involve disclosure and collection of substantial amounts of personal information. This Information Sheet answers the key privacy questions and gives businesses useful tips that will assist in compliance with the Privacy Act.

The Information Sheet 16-2002 - Application of key NPPs to due diligence and completion when buying and selling a business is available online

‘Due diligence’, the process that a prospective purchaser of a company goes through to assess the value of their prospective purchase, can involve the disclosure and collection of a number of different types of personal information including:

  • employee information;
  • customer information;
  • trading partners / business associates information;
  • marketing files.

If you are selling a business, and a purchaser has requested a due diligence process, you will need to take reasonable steps to protect personal information that you disclose. Steps that will help you do this are:

  • try to provide the information by giving the purchaser access rather than by giving copies;
  • only disclose personal information that is necessary for the prospective purchaser organisation to carry out its investigations;
  • de-identify personal information where possible;
  • require the prospective purchaser to undertake that they will only use the personal information for the purposes of due diligence until completion of the sale; and
  • require the prospective purchaser to return or destroy any personal information they have collected in the process after completion of due diligence.

Purchasers should reciprocate - ie only seeking necessary information and paying due regard to confidentiality and privacy.

Privacy laws may increase number of discrimination claims

Unsuccessful job applicants may use privacy legislation to access information used during the recruitment process to possibly run discrimination claims.

This issue has been highlighted in the context of the Victorian Equal Opportunity Act - the only legislation to include physical features as a ground for lodging claims.

For example, employers’ notes on physical appearance and attire may be risky as they could be perceived as impacting on recruitment decisions.

Referees’ consent

Consent forms which require the candidate to confirm in writing that the listed referees have consented to being contacted but only for the purpose of the specific position applied for may be advisable for employers. The employer/recruiter can also indicate that if they discover the declaration to be untrue they can withdraw future employment assistance and refuse to consider the candidate for the job.

Privacy toolkit CD 

The WorkplaceInfo Privacy Toolkit CD is an interactive tool, allowing businesses to critically assess their situation within the privacy legislative framework, understand what the law means to you and customise documentation to produce privacy procedures and policy.  

Click here  to download the Privacy Toolkit CD order form, or email or call WorkplaceInfo on 1800 620 391 for more information.

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