A recent decision by the Fair Work Commission presents an excellent case study for employers, but much of the commentary around this case appears to have missed the point.
The case in question was an application by Charles Tham for an unfair dismissal claim against Hertz Australia Pty Ltd. Hertz had dismissed Mr Tham after nine months in the position following their investigations into his past in light of concerns about his job performance.
Hertz discovered that Mr Tham had not been honest in his job application and resumé. While he had claimed a previous employment period of 5 years, the facts were that Tham was dismissed by his previous employer, the Conrock Group Pty Ltd, after only one year on the job.
Shutting the gate too late
The Fair Work Commission found that Tham had intentionally misled Hertz and the errors in his resumé were not inadvertent mistakes. While this finding is a win for common sense, the object lesson for employers is not the legal precedent.
Despite the win by Hertz in this case, the outcome is not truly a successful result for the employer. The best-case scenario for Hertz would have been that they successfully hired a valued employee who was an asset to their business in the first place.
This result falls a long way short of that. Winning this case at the Fair Work Commission would have involved many hours of administration, management time, legal costs and emotional heartache and stress for all of the parties concerned. Hertz could have directed their efforts towards running their core business and serving their staff and customers instead.
A reality of such legal action is that many smaller employers, without the same resources as Hertz, may not have been able to afford the time or the expense of contesting such a case. Employers with limited budgets could be forced to settle the dispute before a hearing so that they could get back to operating their business.
The cost of hoping for the best
While we don’t know the particulars around the hiring of Mr Tham by Hertz, many employers make the mistake that Hertz apparently made in this instance, by taking the resume or job application at face value.
Not everybody lies. In fact, most people want meaningful work for which they are appreciated and fairly compensated. Most of us also want to work with people in an environment of mutual respect, and many employees go the extra mile for their employer and their customers.
However, employers can’t afford to leave themselves vulnerable to the small percentage of job applicants who don’t share these values. Detecting a lie in person or on paper is hard to do using intuition alone. Making a poor hiring choice is a double loss with costs compounded by the opportunity costs. The employer is left with managing a problem employee who shouldn’t have been there in the first place and the business misses out on the valuable contribution of another, more suitable candidate who was not hired.
Risk-based hiring management
At CVCheck, we promote a risk-based approach to hiring. We recommend that hiring managers assess:
· The positive qualities and values that they expect candidates to demonstrate such as honesty and integrity;
· The skills and experience required of the role, such as formal qualifications, on the job experience, or licenses;
· The various risk factors that the role, or that employee could pose for the company. These include; legal liability, financial mismanagement, malpractice or other damages claims arising out of professional services.
The purpose of pre-employment screening is for the employee to verify and positively validate that the candidate meets the character and skills requirements, and mitigate any future risks.
When hiring Mr Tham, for example, Hertz could have requested a police check, verified his employment history against what he reported in his resume, and obtained employment references.
As an employee of a car rental company, it’s also possible that Mr Tham would have had a need to operate and drive the company’s vehicles. In this case, Hertz could also have obtained records of his driving history and current license status to ensure he was legally entitled to drive and avoid legal exposure if he was not.
For around $100, the company would have been alerted to the significant problems in their candidate’s application, and they would have completely avoided the cost, time, stress and disruption to their business. Hertz is clearly the injured party here, but there’s a very good chance that they would have preferred to make a small investment up front to avoid the cost and disruption they had to endure to win this case.
The most important lesson is not the legal precedent or the reasoning that was applied by the Fair Work Commission, as sensible as that may have been. The point is that prudent, preventative measures are available, inexpensive and simple to apply.
Bad hiring decisions are costly, stressful and easy to avoid using a simple, risk-based approach. Eliminating unsuitable candidates is also fairer for honest applicants who compete squarely on their merits.