Legal checklist when recruiting

 When it comes to recruiting, there are many legal issues to consider. From employment relations to privacy to human rights, it can be difficult to put your finger on it all at once. We set out, for ease of reference in one location, steps to follow to ensure that you are well on your way to ticking all of the boxes.

Recruitment

Effective recruitment is a process which is essential to a successful business. To be effective in recruitment, an employer needs to analyse the available role and consider the type of candidate that is required to perform it well. In doing so, employers should be mindful of their obligations under the Human Rights Act 1993 (HRA).

Naturally, successful candidates should be selected for their perceived ability to perform in a role. This sentiment is reflected in the HRA which prohibits discrimination by an employer on a number of grounds. Among others, these grounds include age, colour, disability, employment status, sexual orientation, marital status, ethnic origin, or sex.

In advertisements, employers should avoid wording that might reasonably indicate an intention to discriminate on any of the grounds protected by the Act. This would include terms like "postman" or "waitress", but also specifying a role like "office junior" where the intent was only to employ a young person.

Stipulating a genuine qualification as a term of employment, such as requiring that the applicant is over the age of 18, does not conflict with the requirements of the HRA. There are also specific exceptions to the rules against discrimination. For instance, an employer could advertise for a female actress to play the role of a female character in a show.

Selection: procuring and handling information

Privacy

Once an appropriate pool of candidates has been identified for a position, the task will turn to assessing each applicant to determine who is best for the role. The selection process is essentially an information gathering process. Employers should be aware of their obligations under the Privacy Act 1993 (Privacy Act), as this invariably involves the collection of personal information about an applicant.

In collecting personal information from an applicant, employers should only collect information for a lawful purpose which is connected with a function or activity of the business. To avoid offending this principle, employers should:

1. Specifically identify the relevant purpose for collecting personal information from applicants;
2. Identify the personal information which needs to be obtained to fulfil the identified purpose; and
3. Endeavour to collect the minimum amount of personal information from the applicant necessary to fulfil the identified purpose.

Privacy and other legislative requirements

Compliance with the principles enshrined in the Privacy Act will assist employers to avoid liability under other legislation. A good illustration of this relates to potential liability under the HRA. If employers ask questions or circulate forms which could be construed as indicating an intention to discriminate, they may offend the provisions in the HRA. For instance, questions or forms which require candidates to provide details of illnesses or conditions which are not relevant to a proposed position are likely to fall foul of the HRA.

Similarly, sweeping questions regarding a candidate's health are unlikely to be justifiable where they are broadly framed and the purpose of the question is not objectively clear. The best way for employers to avoid liability in this regard is to prepare objective criteria for a position, and only seek information in connection with that criteria. If employers use the privacy principles when considering this information, and only seek the minimum information required to fulfil the required purpose, it will assist with this wider compliance.

Candidates should be made aware of the reason for which their personal information is being collected, who will hold the information, to whom the information may be disclosed, and how long the information will be retained. The candidate should also be made aware of their right to access their personal information which the employer collects. Application or information forms circulated by an employer are good methods for conveying this information to candidates.

Employee checks

Assessing a candidate's character is an essential element of an effective selection process. In some cases, this may require an employer to inquire about a candidate's criminal history. Once again, an employer must be clear as to why they seek this information and disclose this purpose to the applicant prior to obtaining their consent for a search (where it is necessary to obtain consent).

Under the Criminal Records (Clean Slate) Act 2004 (Clean Slate Act), certain minor offences committed by a candidate need not be disclosed after the individual has completed the necessary rehabilitation period (being seven years without further conviction). The Clean Slate Act also requires that government agencies conceal information about qualifying offending. Therefore, search requests made by employers will not disclose offending which qualifies under the Clean Slate Act.

Candidates seeking employment in certain fields of employment will not fall within the ambit of the Clean Slate Act, nor will candidates who have committed serious offences. For instance, candidates seeking employment in a role which involves caring for children will be required to disclose their full criminal history.

It is very common for employers to conduct referee checks of candidates by contacting individuals nominated by a candidate in their application. The Privacy Act requires that personal information should ordinarily be collected from the candidate. However, where personal information is collected from another party, the employer should first obtain the candidate's consent. Therefore, good practice dictates that an employer should first seek consent before consulting with referees nominated by the candidate. Indeed, this is particularly important when contacting past or present employers of the applicant.

When obtaining information from a referee, it is also important to ask the referee on what basis they are providing the information about the candidate. The basis on which information is offered will influence whether the information is capable of being disclosed if subsequently requested by the candidate. Moreover, it is good practice to record the referee's wishes in order to remove any future doubt as to whether the employer is entitled to withhold the information at some future date.

Right to Work in New Zealand

Another important piece of information that may need to be obtained by an employer during a selection process will concern a candidate's immigration status where the applicant is a foreign national. It is illegal for an employer to employ a foreign national who is either not entitled to work in New Zealand, or who is not entitled to work for the particular employer. Employers need to be prudent in their approach to determining whether a foreign national is eligible to be employed. In the first instance, the candidate should be asked about their eligibility to work in New Zealand, and for the employer. Evidence of eligibility should then be procured and recorded by the employer.

It is important for employers to bear in mind that the only defence to a charge for employing or continuing to employ an ineligible foreign national is to demonstrate that the employer took reasonable precautions and exercised due diligence in ascertaining whether the person was entitled to work. Employers who fail to take the steps mentioned above are unlikely to meet this standard and may, therefore, be liable for fine or more serious sanction.

Offering terms of employment

After selecting a candidate, an employer will need to turn its mind to the terms and conditions on which the candidate will be employed. The express requirements for any individual employment agreement (IEA) are set out in the Employment Relations Act 2000 (ERA). IEAs must be in writing and contain the minimum standard of information prescribed under the ERA. These relate to matters such as the agreed hours of work, the services which are available to the employee for the resolution of disputes between the parties and employee protection provisions.

Trial clauses are useful where an employer is hiring an individual who is new to an organisation. These clauses prohibit an employee from raising a personal grievance for unjustified dismissal if their employment is terminated within the first 90 days of employment.

One of the proposed changes to the ERA, currently before parliament, is to remove the ability to include such clauses where the employer employs more than 20 employees. Although this is not yet law, it is expected that trial periods will be removed by the new law, once passed. If this occurs, employers with 20 employees or more could use a probationary period as an alternative.

A major difference between trial and probationary periods is that a personal grievance will still available to employees under a probationary period. Also, if an employer wishes to dismiss a new employee at the end of a probationary period, the employer is required to follow a full process before dismissing the employee. So, there are greater protections and processes for employees with probationary periods, however, they can still be useful as they set the scene for assessment from the outset, and the employee is on notice during this time.

Once the terms of employment are finalised by an employer, it is important that an employer then gets the successful applicant to sign the agreement. To be binding, an employment agreement needs to be signed, or otherwise agreed to. Where an employment agreement is not signed, it is particularly difficult for an employer to establish that an employee has accepted the terms and conditions contained in an employment agreement and it can lead to difficulties at later stages. Also, some types of clauses, such as restraint, will not be enforceable if not signed. Of course, while trial periods are still applicable, the employment agreement must be signed before the employee performs any work for the employer, in order to be enforceable.

It is also important to bear in mind that, once an employee has accepted an offer of employment, the employee acquires rights under the ERA. An employee intending to work falls within the definition of "employee" under the ERA. This includes someone who has been offered, and accepted, work as an employee. This is true even if the terms of employment have not yet been finalised or the employment agreement has not been signed. This is particularly important where an employer either seeks to withdraw an offer for employment or vary the terms of an offer. Advice should be sought if these issues arise to avoid a personal grievance.

There are many pitfalls with recruitment and offering. If you would like assistance with any of the matters discussed in this article, or with issues in employment more generally, please feel free to get in touch.

Amanda Douglas leads the Employment and Health and Safety practice at Wynn Williams. She acts for employers and employees on a variety of Employment Law matters, with a particular focus in the dispute resolution area. She regularly presents on employment and health and safety matters and can be contacted at [email protected] or 03 3797622.

Pullquote:

Once an employee has accepted an offer of employment, the employee acquires rights under the ERA

A personal grievance is still available to employees under a probationary period