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The Risks of Referencing

The Risks of Referencing (Last Updated On: May 24, 2016)

Choosing the right employee for a job involves making tough decisions based on limited information about a candidate. Conducting reference checks is a common way for businesses to not only validate the accuracy of information disclosed by the candidate, but to also seek further information on the true work performance and behaviour of potential employees.

However, did you know the process of providing and conducting references for past employees can expose you to a range of risks and liabilities?

What are the risks?

When providing a reference for a past employee it is important to be mindful to only provide information that is of a public nature or that the employee has authorised you to release. Furthermore, when prompted for information on a past employee it is best to limit the conversation to the employment relationship and to avoid false, malicious or misleading statements that may lead to discrimination or defamation.

Some employers may opt for a ‘no reference’ policy to avoid potential liability and you are well within your rights to do so.

If you are contacting someone as part of your reference checking, avoid questions of a personal nature, such as those which expose a candidate’s sexuality, ethnicity or religious beliefs as these sorts of questions are irrelevant to a person’s ability to perform a job. It is also important to be careful of how questions surrounding a person’s performance are framed, including those related to skills, weaknesses, punctuality and absenteeism, particular if there was any association with a disability.

Key items to think about when reference checking:

  • reference checks should not be heavily relied on when making a decision to hire a candidate
  • information received may be subject to the referee’s interpretation of the situation and their relationship with the employee
  • only contact referees which have been provided by the candidate
  • do not cold call a referee without confirming this action with the employee first

How to ensure you select the right candidate:

  • speak to a manager who directly supervised the employee
  • listen for spoken and unspoken cues
  • stick to using professional references (past work colleagues, sporting team coaches, school teachers), rather than personal references to avoid bias where possible
  • ask open ended questions to allow the referee to elaborate on their response
  • if in doubt, seek information from more than one referee
  • stick to basic questions
  • should issues arise in the future, it is best to ensure a probation period is included in employment contract

Under the Privacy Act, candidates are entitled to obtain information on their reference check if they are unsuccessful. As such, employment decisions should be carefully considered and take into account potential legal repercussions.

Employsure is Australia’s leading specialist in the field of employment relations. Call us today on 1300 651 415 to speak to one of our friendly advisers regarding any questions you may have.

Author: Thorunn Arnadottir

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