David Grindle: Giving references: what's an employer to do?

It is important to be careful what you disclose to third parties about prospective employees.

OPINION:

They say the road to hell is paved with good intentions, and the same principle holds true for employers dealing with their privacy obligations. A breach of the Privacy Act 2020 (the Act) can result in adverse outcomes for all involved.

One area where employers should be wary is when conducting pre-employment checks or giving references. In recent years, the Employment Relations Authority and the Human Rights Review Tribunal have seen a significant increase in cases relating to an employer unlawfully providing information, gathered during the course of an employment relationship, to a third party.

The act contains principles which describe how the law should be applied, in particular principle 11, which states:

"An agency that holds personal information shall not disclose the information to a person or body or agency unless the agency believes, on reasonable grounds (among other things) that the disclosure is authorised by the individual."

In essence, all of the information the employer obtains in the course of its employment relationship with an employee is personal information governed by the act. When a third party (for example, a prospective new employer) asks to access that personal information, the employer can only do so when the disclosure has been authorised by the employee.

There is an inherent risk of breaching the act when employers provide information about their employees to unknown third parties. Decided cases show that where the complainant can demonstrate injury to feelings and a breach of principle 11, the likely minimum Damages awarded against the offending party is approx. $3,000. In addition, the employer is likely to be the subject of a declaration confirming that they interfered with the employee's privacy, and (the relevant people) directed to attend training regarding privacy.

Reducing your risk

We recommend as a general rule that employers create a workplace policy that records that it does not provide references for current or past employees, and avoid giving references. Employers can still provide a statement of service, which should contain details regarding the period of employment and the nature of the role undertaken.

Privacy while working from home

The recent change in alert levels will have prompted many Auckland employers to once again direct employees to work from home. Privacy is a recurring issue our clients have asked about regarding working during lockdowns.

Some employers wanted to know whether they could ask staff to keep their webcam activated all day so that the employer could maintain collaboration and ensure productivity. Obviously in a domestic setting, this request raises some unique privacy challenges. Although an employee is obliged to comply with any reasonable instruction from their employer, asking an employee to have a camera running in the home at all times of their employment is likely to be deemed unreasonable as it places the employee under constant surveillance.

Principle 4 of the act says that the manner of collection should not be unfair or unreasonably intrusive. Insisting that employees working from home keep some kind of audio-visual recording device on is likely to be a breach of this principle.

Notions of privacy and employment are intertwined and all employers should remember that they are guardians of their employee's personal information.