Below are selected highlights from the first chapter of Joydeep Hor’s new Labour and Employment Law Manual – 2nd Edition, which deals with the complexity of Australian HR legal issues in a highly practical way.
Getting the recruitment and selection process right is crucial to building a strong team and culture within any business. This Chapter highlights the legal issues and risks that an employer must consider in recruiting and selecting employees including those relating to:
- designing a role
- drafting advertisements
- shortlisting applicants
- conducting interviews
- selecting successful applicants, and
- formulating appropriate employment
In focusing on the legal issues and risks in the recruitment and selection process, we do not intend to detract from other issues and risks to which an employer may be exposed in connection with recruitment and selection, including financial, commercial and reputational risks.
The legal risks referred to in this Chapter therefore should not be considered in a vacuum.
This Chapter also addresses the important distinction between engaging an employee or an independent contractor to perform a particular role. The decision as to whether an employer engages a successful candidate for a role as an employee or an independent contractor is one that should be made early in the recruitment and selection process. There may be significant ramifications for a business if the intention is to engage an independent contractor and that relationship is not established effectively.
Legal risks in recruitment and selection
There are a number of significant legal risks attaching to the recruitment and selection process that an employer should be aware of and seek to manage at each stage of that process.
These risks include, but are not limited to:
- discrimination claims under the relevant discrimination legislation
- misleading representation claims under the Competition and Consumer Act 2010 (Cth) (Competition and Consumer Act), and
- general protections (adverse action) claims under the Fair Work Act 2009 (Cth) (FW Act).
These risks, how they may arise in each step of the recruitment and selection process and how they may be managed, are discussed in further detail below.
Federal, State and Territory anti-discrimination laws prohibit an employer from engaging in discriminatory conduct when advertising for positions, determining who should be offered employment and the terms and conditions on which any offer of employment is made.
The grounds on which it is unlawful to discriminate against a person vary from state to state, but generally include:
In addition, employers should be aware that there are a range of ‘‘other’’ prohibited grounds of discrimination under Federal, State and Territory anti- discrimination laws. These grounds are set out in the table below.
‘‘OTHER’’ GROUNDS OF DISCRIMINATION
CASE EXAMPLE: Competition and Consumer Act claims
Rakic v Johns Lyng Insurance Building Solutions (Vic) Pty Ltd (2016) FCA 430
The applicant was employed by Johns Lyng as a General Manager. During pre- employment negotiations, the applicant was offered a significantly reduced base salary in exchange for a 2.5% share of the business’ profits. The applicant alleged that she left her previous job, in which she was earning close to $100,000 more than the base rate offered by Johns Lyng, in reliance upon the representations made by the business concerning its profitability. The applicant alleged that Johns Lyng had engaged in misleading and deceptive conduct in breach of s 18 and 31 of the Australian Consumer Law.
The Supreme Court found that the business had engaged in misleading and deceptive conduct. Johns Lyng had made representations that it was likely to ‘‘meet or exceed its profit or sales’’ from the previous two financial years. The court rejected the submission that the business would escape liability if it demonstrated that employees acted reasonably in passing on information they believed to be correct to the applicant. Johns Lyng was ordered to pay $333,422 in damages in respect of the representations it made to induce the applicant’s entry into the contract. Additional damages of $16,529 were ordered in respect of the net profit clause.
TIPS: Developing Selection Criteria
- To the extent possible, base selection criteria on objective facts, such as an applicant’s work experience and qualifications for the
- Ensure the selection criteria and the position description created in respect of the role are consistent.
- Be clear on the purpose of the role, including how it is intended to fit within the organisational structure and what strategic objectives attach to
- Be clear on the inherent or essential requirements of the role. Only the inherent requirements of a role should be considered in determining an applicant’s ability to do the job, subject to ‘‘reasonable adjustments’’ being made where relevant.
- Consider whether application of, or reliance on, the selection criteria will or may result in discriminatory outcomes. If there is likely to be a discriminatory outcome, is the criteria an inherent requirement of the role or, alternatively, are there exceptions under anti-discrimination legislation that would apply?
- Ensure that the qualifications and experience attaching to the role can be justified with reference to the inherent requirements of the role.
This second edition of the Labour and Employment Law Manual includes a new Chapter dealing with the collection and management of employee information.
Through the use of case examples, flowcharts and checklists, in addition to a comprehensive legal commentary, the Manual provides anyone dealing with people-related issues, with the means to do so in a strategic and legally compliant manner.