The Importance of Due Diligence in Recruitment Processes

by Breda O’Malley Partner, Head of Employment Law, Hayes solicitors LLP

Various studies available online suggest that over 70% of job applicants have embellished and/or falsified their CVs. If discovered, this can have serious consequences both for employees and employers, as was evident in Genockey v The Governor and Company of the Bank of Ireland[1], where the High Court determined that the Bank of Ireland was entitled to rescind a job offer after it came to light that a job applicant had lied about her Leaving Certificate results on her CV.

One recent ruling of the UK Supreme Court involving so-called “CV fraud” highlights once again the importance of setting clear pre-employment conditions and conducting thorough due diligence during the recruitment process.

R v Andrewes[2]

Mr Andrewes, a 63-year-old NHS hospice Chief Executive, was jailed for two years in 2017 after claims he made about his qualifications and experience when applying for his role were exposed as untrue.  Among his fake claims, he professed to have degrees from three universities and a PhD. In reality, Mr Andrewes had a Higher Education Certificate in social work and spent most of his career as a probation officer, customs officer or youth worker.

Following sentencing, prosecutors obtained a confiscation order in the amount of £96,737.24 under Proceeds of Crime Act, 2002 to recoup “the difference between the higher earnings…obtained and the lower earnings that he would have obtained had he not used fraud and hence had not been offered the particular job”. Mr Andrewes successfully appealed this ruling before the Court of Appeal, which considered the confiscation order for £96,737.24 to be disproportionate because Andrewes had “given full value for the remuneration he had received” when performing the services he was paid for. Prosecutors raised a subsequent appeal to the Supreme Court arguing that the value of the services Mr Andrewe’s performed “should not be offset because they were equivalent to the costs of the criminal enterprise”. The Supreme Court ultimately held that “the fact that there was a legal bar to the appointment does not mean that the law cannot place a value on the services provided”. They did note, however, that confiscation of full net earnings would not be disproportionate in cases “where the performance of the services constitutes a criminal offence”.

The SC concluded that in CV fraud cases, it is generally proportionate to make confiscation orders as otherwise “the fraudster would be profiting from his crime”. This was despite the fact that it was acknowledged by the Supreme Court that Mr Andrewe’s had made “significant progress” at the hospice and had “not actively done any damage”.

This is an extreme example of an individual grossly falsifying their CV and obtaining a highly paid, senior position as a result. Technically, whilst several individuals have received prison sentences for CV fraud in the UK, it seems there have not yet been any criminal cases in this jurisdiction, nor is this judgement legally binding in Ireland. However, falsifying a CV is still considered serious misconduct and can lead to summary dismissal, once discovered.

Takeaways for employers

1. Pre-employment criteria should be clearly communicated to candidates prior to making any offer of employment. Ideally, pre-employment checks should be carried out before a job offer is made. However, where this is not possible, any offer, whether verbally or in writing, should be made conditional on reference and qualification checks, and that any offer may be rescinded on foot of the completion of these checks.

2. Where an employee provides false information in a CV, this is a clear breach of the term of mutual trust and confidence implied into the relationship between every employer and employee, and this could give an employer the right to dismiss the employee, with or without notice, depending on the circumstances. In general, where an employee has one year’s service, and falls within the scope of the Unfair Dismissals Acts 1977 – 2015, employers are advised to follow a fair disciplinary process and avoid knee jerk reactions.

3. Employers must ensure that background checks are compliant with GDPR and the Data Protection Act, 2018. Employers should, for example (where practicable):

1. Carry out background checks lawfully, fairly and in a transparent manner. Let candidates/employees know you are carrying out checks (in particular social media screening) and if/how data will be stored.
2. Identify a legal basis for data processing, i.e. compliance with legal obligations and/or legitimate interests. Consent is not considered an appropriate legal base due to the imbalance of power in the employer-employee relationships.
3. Limit the collection of personal data to what is relevant and necessary. Ask candidates to provide the information to support their claims to avoid unnecessary data collection.
4. Retain personal data for no longer than necessary.

4. HR professionals are on the front line of protecting organisations and proper due diligence should be carried out for each candidate. This may require specialised training for HR professionals involved in recruitment. Whilst many employers use recruitment agencies, do not rely solely on what recruitment agencies tell you. The more senior the role, and the riskier the environment the employee will work in, the more due diligence checking prospective employers are advised to carry out.

[1] [2017] IEHC 498.

[2] [2022] UKSC 24.

About the author

Breda O’Malley practises in Employment law and leads the Employment Law team at Hayes solicitors. She advises both employers and employees on all aspects of the employment relationship. Breda adopts a commercially pragmatic approach to dispute issues, avoiding litigation for her clients where appropriate, and using her skills as an accredited commercial mediator.

Breda is a prominent adviser in the area of the Transfer Regulations (TUPE), where she has advised employers outsourcing and changing service providers. Her previous legal practice in commercial law work strongly influences her pragmatic business focused approach to the clients she advises. Breda acts for a broad spectrum of clients from multinational corporations, large public entities and European Works Councils to indigenous Irish businesses, charities and private clients on the employer side. She also acts for C-suite executives in PLCs and multinationals.