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Guilty as charged: when considering a criminal record might amount to discrimination

By Alex Millman and Lucy Coogan

The Federal Government has offered employers some clarity around recruiting applicants with criminal records, after the Australian Human Rights Commission (‘AHRC’) found that Suncorp discriminated against a job applicant with a record.

The Australian Human Rights Commission Regulations 2019 (‘the new regulations’) [1], which commenced on 1 October 2019, have replaced the Australian Human Rights Commission Regulations 1989 (‘the regulations’). The changes are intended to ensure the regulations are in line with modern community expectations.

In particular, the new regulations allow employers to exercise “reasonable discretion against prospective employees if their criminal record is relevant to the position being applied for”.

What prompted the change?

The announcement follows a report published by the AHRC in relation to the matter of BE v Suncorp Group Ltd [2], in which the AHRC determined that Suncorp had discriminated against Mr BE on the basis of his criminal record.

In March 2008, Mr BE was convicted of accessing and possessing child pornography. In 2015, he was convicted of failing to comply with his reporting obligations. Later that year, Mr BE applied for an at-home ‘insurance claims assist consultant’ role with Suncorp.

When Mr BE initially applied for the role, he failed to fully disclose the extent of his criminal record, however provided consent to a criminal history check being carried out. Suncorp interviewed the applicant, and conditionally offered him employment.

Upon receiving a copy of Mr BE’s criminal history check, Suncorp withdrew its conditional offer, quoting the nature of Mr BE’s convictions and the availability of an alternative candidate.

The AHRC noted that withdrawing an offer of employment on the basis of a person’s criminal record will amount to discrimination unless the refusal is based on the inherent requirements of the job. Suncorp argued that Mr BE’s criminal record meant that he did not possess the trustworthiness and good character necessary for multiple aspects of the role.

The AHRC found that while Mr BE’s convictions were serious, they were not for offences of dishonesty and were therefore unrelated to his ability to perform the role. As such, Suncorp’s withdrawal of the offer amounted to discrimination.

This decision attracted criticism from the Federal Government who promised to review the regulations, and specifically the constraints of the ‘inherent requirements’ provision.

What are the changes?

Prior to 1 October 2019, an employer’s refusal to employ a person based on their criminal record would amount to discrimination unless the refusal was based on the inherent requirements of the job. The new regulations remove the ‘inherent requirements’ aspect, and instead allow employers to consider the relevance of the record to a position.

The change aims to strike a balance between recognising that people with criminal records have likely repaid their debt to society, and allowing employers, particularly in small business, to exercise discretion around applicants’ suitability for the roles they are applying for.

Industrial Relations Minister Christian Porter has said that the changes bring the regulations in line with common sense. He has suggested that under the new regulations Suncorp could not be found to have discriminated against Mr BE, as his convictions and failure to disclose were relevant to Suncorp’s business culture and requirements.

What difference does it make?

These regulations are new and are therefore untested, however it is possible that the new regulations have not made a material difference to the rights of employers.

Under the regulations in their previous form, an employer had to demonstrate that the criminal conviction prevented the employee from satisfying the inherent requirements of the role.

This requirement arose out of case law rather than legislation, and consequently a key element of such an argument was whether the criminal conviction created a relevant impairment on the employee’s ability to perform their role.

By and large, the new regulations simply legislate the specification that an employer cannot discriminate against an employee or prospective employee on the basis of an “irrelevant” criminal record.

A means of assessing what is “irrelevant” is not provided for in the new regulations, nor is this concept traversed in any detail in the Explanatory Memorandum to the new regulations.

We would not be at all surprised if, in the absence of further legislative guidance, the AHRC determines that a person’s criminal history is only “relevant” if affects the person’s ability to perform the inherent requirements of the role.

It is therefore entirely possible that even under the new regulations, Mr BE’s case would have reached the same result.

Implications for employers

It is important to note that discrimination arising under the new regulations cannot be taken further than conciliation before the AHRC. When the AHRC makes a finding of discrimination, it is empowered to make non-enforceable recommendations. This may include the payment of compensation and taking steps to prevent similar conduct occurring again.

Employers in Tasmania and the Northern Territory should note that criminal record discrimination is unlawful under state and territory legislation, and may attract penalties. Additionally, employers in some industries may be obliged to conduct a criminal history check where there is a legal requirement that an employee should not have a certain criminal record. This is unlikely to be the case in the retail industry.

In instances where an employee has already been hired and subsequently dismissed upon their criminal record being discovered, the Fair Work Commission has held that merely having a criminal record does not constitute a reason for dismissal. In these instances, employers should consider the relevance of the criminal record to the employee’s role.

Generally, the AHRC advises that employers should only ask applicants and employees to disclose criminal record information if they have identified that certain convictions are relevant to the position.  

If you have questions about how the proposed change can impact your recruitment procedures, contact one of our dedicated workplace relations specialists on 1800 RETAIL (738 245) for advice.

[1] Australian Human Rights Commission Regulations 2019 (Cth)

[2] BE v Suncorp Group Ltd [2018] AusHRC 121

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