Jo Douglas explains how to avoid the pitfalls of reference checking.
When recruiting for a role, you want the right person for the job. In doing so, you are likely to go through several interviews, various investigations including a Google search, a reference check, testing for competence and psychological testing.
There are many employers who in their enthusiasm to hire will skip the reference check. This can be a real mistake. It’s important that reference checking is done well, and privacy interests are recognised.
A reference check is not a foolproof way to establish if someone is suitable for your organisation. It should form just one part of your enquiries and things to consider before making a binding offer of employment.
Bear in mind that at times, a former employer may commit to providing a positive reference as part of an agreed exit. So, be aware of what is being said but wary of what is not being said by the referee.
Sometimes, the reference checking process will throw something up. For example, I was asked to advise on a case recently where a CV had been padded substantially. The candidate’s employment with a previous employer had ended two years prior, but the candidate had recorded in their CV that they had left only recently.
The named referee confirmed this employment and spoke positively for the candidate. However, the referee’s identity did not stack up. It appears as though the employee had told some porkies on their CV and then had a mate pretend to be a referee to back up those false assertions.
On further investigation, it became apparent the referee did not, in fact, work in the role or for the company they were supposed to be representing.
From a legal perspective, this created a few issues.
PRIVACY ISSUES
When making investigations you must have evidence of consent from the candidate to do the checks required. This might include verification of a referee and checking more widely within an organisation. If an employee is avoiding having their actual line manager give you a reference, and only gave you authorisation to contact a specific person, you cannot probe further or contact other individuals outside without the candidate’s consent. However, you can draw your own conclusions from a candidate’s reluctance to provide this information or if you have any doubts regarding the truthfulness of the information put forward. There may also be information publicly available to help you identify and verify who the referee is and what their role is.
You may also face the situation where a manager may not have consent from the candidate to disclose anything about their former employment. If you contact a named referee that is surprised by your call, has the candidate actually asked them to be a referee? If not, there’s likely to be a privacy issue here too.
Consider how you communicate back to the candidate that you’ll not be progressing their application. What information from the reference checking process can you share?
Have you obtained consent from the referee to pass on their comments to the candidate?
If the comments are less than positive the referee may ask you to keep them confidential. Ordinarily, personal information about an individual can and should be disclosed to them, but there are some exceptions. Under the Privacy Act information that is given in confidence and includes evaluative material, can be withheld. This may apply to references.
Think about asking the candidate for an acknowledgement at the outset, that information from a referee may be kept confidential, so that there’s no expectation of detailed information being passed onto them.
WHAT TO DO WHEN YOU CONSIDER A CANDIDATE UNSUITABLE?
In the situation where the reference checking process has thrown up something unexpected, and makes the person unsuitable, you’ll want to halt your recruitment process.
Any offers that you might make prior to reference checks being completed should be conditional on returning references to the satisfaction of the employer. Written documentation, including the employment terms and the conditions attached, documented properly should allow you to withdraw the offer.
Once the employee has accepted an unconditional offer, you will have a binding agreement. The only way to withdraw at this stage, is to terminate in accordance with the employment agreement and following a full and fair investigative process.
Once employed and working for you, if you find out the employee has misrepresented their background, you may be looking at whether you have a clause dealing with false representations, and/or considering a termination based on the inaccurate or misleading information conveyed. Depending on the nature and extent of the misrepresentation, this might either be a conduct or a performance issue.
It’s important you carry out thorough investigations before committing to a binding offer.
If in doubt, prepare a full written offer including the employment agreement and include a comprehensive cover letter setting out any conditions attached to the offer – such as reference checks, Ministry of Justice checks, visa requirements, etcetera. Then you can confidently proceed.
Remember, if something’s not quite right, move on and find the person who is in fact right for the role and for your business.
Jo Douglas is a partner at Douglas Erickson, employment lawyers.email: jo@douglaserickson.co.nz
This article is written for the purposes of providing general information only and is not intended to be legal advice.
