References and Privacy

By Paul Brown

Supplying references or information about a former employee may breach the Privacy Act 1993 and see you out of pocket.

In a recent case, Director of Human Rights Tribunal v Katui Early Childhood Learning Centre Limited (Katui ECC), the tribunal found the Privacy Act had been breached when Katui ECC disclosed information about a former employee without permission. It awarded $3000 to the former employee.

It was Principle 11 of the Privacy Act 1993 that caused Katui ECC problems. This section states any agency that holds personal information about an employee should not disclose it unless the disclosure has been authorised by the employee.

Ms Gin-Cowan was working at Katui ECC in 2010 as an early childhood teacher. Various issues arose during the employment relationship, and four years later, in January 2015, Ms Gin-Cowan applied for another job at a childcare centre in Waatea, called MUMA. She was offered employment the following day and signed an individual employment agreement. At this stage, MUMA had not signed the employment agreement. Rather too quickly, Ms Gin-Cowan resigned from her position with Kaitui ECC and that evening was contacted by MUMA asking for a referee. She supplied the name of a colleague at Katui ECC.

Unauthorised referees

When Katui ECC were contacted, MUMA were told the referee was on sick leave. The acting centre manager who answered the phone was then asked to provide a reference for Ms

Gin-Cowan. She said no because the two of them did not "get on”.

The conversation continued and MUMA's staff member asked if Kaitui ECC would re-employ Ms Gin-Cowan and the acting centre manager said 'no'. The MUMA staff member was then given contact details for the directors of Kaitui ECC and the conversation continued. The directors made various comments about Ms Gin-Cowan and her late arrival at work, unreliability and unsatisfactory work habits.

Meanwhile, Ms Gin-Cowan travelled to Auckland to start her new job with MUMA. It was there she was advised that her references had not been favourable and that MUMA would not be proceeding with her employment offer.

You can understand that Ms GinCowan would have been more than a little annoyed….

Human Rights Tribunal proceedings 

Ms Gin-Cowan made a complaint to the Human Rights Tribunal about an interference with her privacy. The tribunal found that Katui ECC had provided personal information to MUMA without her permission.

All remedies within the tribunal are discretionary, but ultimately they found a very minor part of the injury to Ms Gin-Cowan's feelings were attributable to the breach of Principle 11 of the Privacy Act 1993 by Kaitui ECC. The remainder was due to the confusion and errors in the MUMA employment process.

What should an employer do when asked for a reference?

If you do not want to give reference: say that under the Privacy Act, that information is private and confidential and unfortunately you do not have permission (from the employee concerned) to release it.

you do want to give a reference: say what you like but stress your comments are only given on the condition they are confidential.

Employers have a defence under section 29 (1) (b) of the Privacy Act i they clearly state to the person requesting the information that their comments and any information provided is given on the condition that it is confidential. The person collecting this information is collecting "evaluative material", which does not need to be disclosed to a successful or unsuccessful job applicant.

It is worth noting that this section can also protect other information given under circumstances where it is expected to be confidential. For example, some employers use "360 peer reviews" where other employees are encouraged to give a very honest opinion of a work colleague. In these circumstances an employer car argue that the comments are protected by either an implied or express condition of confidentiality.

What other information could be called confidential?

It is common when investigating a complaint of bullying or sexual harassment to receive confidential statements, for obvious reasons. While this information is often given on the condition it is confidential, if this information is likely to be used in disciplinary action against another employee then it should be disclosed.

In this situation, there are two conflicting principles: one is about confidentiality under the Privacy Act, and the other is about good faith under the Employment Relations Act, which includes the need for a fair and transparent process during a disciplinary process.

My advice is to give me a call before you go very far down either track.