Author: Lehanne Bleumink, Gold Seal HR Services Manager.

Reference checking should be a mandatory step in the recruitment process – regardless of the position, and also when considering existing staff for a promotion or transfer within the business. It can be a legal minefield, so it is essential to understand legal obligations when conducting reference checks. Last month we discussed the hidden dangers of social media screening when recruiting; this has become common practice as part of the reference checking process.

When recruiting it’s important to have a record that shows business decisions were made following an appropriate process. In addition, an employer needs to be able to objectively demonstrate that its decisions aligned with that process when advertising, shortlisting, interviewing and screening. Record keeping is an essential step when completing reference checks, it provides a ‘paper trail’ to prove an employer was legally compliant throughout the hiring process, particularly if a candidate believes the hiring process was unfair.

It is acceptable practice to ask candidates to nominate referees to support the application. The same questions relating to the same competencies should be asked for each referee to maintain an unbiased collection of information. It is essentially someone’s opinion of the candidate. However, a properly obtained reference can be valuable as part of the decision making process when recruiting. It may also help when choosing between close candidates – so try not to see it as a box-ticking exercise and view it as objective evidence.

It is unlawful to discriminate based on a number of protected attributes, so it’s important to avoid certain questions in a reference check, such as:

  • Is the candidate single or married?
  • Do you know whether the candidate has children, or intends to have them in the near future?
  • Does the candidate have a disability that may impact their employment here?
  • What is the candidate’s racial background?

Aside from the legal minefield that comes with asking questions about gender, race, marital status, disability and more, there are a number of additional factors covered by Australia’s equal opportunity laws. States and territories have their own discrimination laws, as well as federal laws – so there are additional things to consider, for example, a criminal record and whether that is relevant to the role.

Conditional appointment of employees and contractors

If an employer does not receive all reference check information about an applicant before they want that person to start work, they could consider deferring the start date. This allows more time to collect and check the information before a decision is made to offer an appointment; it also avoids the issue of dismissal if required. The risk is also that the applicant may seek employment elsewhere.

If an employer does require a candidate to start prior to the completion of reference checks, they could offer the position as a conditional appointment. This means that the appointment is subject to a three-month probationary period (for employees), or three-month conditional period (for contractors). During this time reference checking will continue.

In this case the offer of appointment should be in writing, clearly communicating the terms of the conditional appointment during the probationary period (for employees), or conditional period (for contractors). It should state that reference checking will continue during this time. It should also state that unsuccessful reference checking information about the applicant’s ability to perform the role may lead to disciplinary action, including dismissal; and that formal confirmation of the appointment is dependent upon successful completion of the reference checking process.

It is extremely important to understand that under privacy laws, an employer is obliged to only call the referees provided by the candidate. If an employer wants to contact a referee outside of those provided by the candidate, they are required to let the candidate know and seek their permission. If they do so without the candidate’s knowledge, they are breaking privacy laws.

Often an employer will ‘fall in love’ with a candidate and before you know it they have hired them. Doing reference checks with the referees provided by a candidate is far better than eliminating the step all together.

For assistance on any of your HR/IR requirements – call Gold Seal on 03 9510 5100 or email hrservices@goldseal.com.au