Lies in recruitment: no longer little or white

Recent research conducted by the CIPD indicates that as many as a quarter of job applicants deviate from the truth on their CV, the most common embellishments relating to current salary (23% of applicants questioned), levels of previous experience (14%), educational qualifications (13%), dates of former employment (10%), and job titles in previous roles (9%).  With the days of a little fib about playing the recorder to professional level now seemingly behind us, what protection does the law provide to employers faced with an applicant or employee who has lied during the recruitment process?

The most significant cases in this area in recent years suggest that employers need to tread carefully when seeking to rely on alleged misrepresentation by applicants/employees during the recruitment process.  In Cheltenham Borough Council v Laird [2009] EWHC 1253, the High Court rejected the Council's claim that a former senior employee, in failing to mention her history of stress and depression in a pre-employment medical questionnaire, had made fraudulent and negligent misrepresentations - and that had it known the truth, the Council would not have entered into an employment contract with her.  To an extent, the decision rests on the particular facts of the case, with Court ruling that no misrepresentation took place as the employee did not give false or misleading answers to the questions asked: for example, she answered ‘yes’ to the question of whether she normally enjoyed good health, which the Court did not consider misleading as the employee had only been depressed for limited periods and this was not her ‘normal’ state of health; and she answered ‘no’ to the question of whether she had an ongoing medical condition that would affect her employment, which again the Court considered truthful (or, at least, not misleading) on the basis that, whilst the employee’s vulnerability to depression was ongoing, the depression itself was not.  However, it does highlight the need to consider the precise facts of each situation carefully.

The case of Bouabdillah v Commerzbank AG ET/2203106/12, meanwhile, concerned an employee who did not reveal that she had brought sex discrimination and equal pay claims against her former employer when applying for a job with Commerzbank.  The employee had completed a pre-employment application form that asked (amongst other things) whether she had ever been the subject of civil proceedings in the UK, to which question she had replied ‘no’; and she failed to disclose the litigation on a number of subsequent occasions during the recruitment process where she had the opportunity to do so.  On discovering the litigation, Commerzbank dismissed the employee, alleging that the repeated failure to disclose the litigation had caused a breakdown of the relationship of trust and confidence. However, the Tribunal held that, rather than her failure to disclose the proceedings during the recruitment process as alleged, it was the fact that the employee had brought proceedings of the nature she had (and the accompanying trepidation that caused at Commerzbank) which had led to the "emotionally driven" decision to dismiss her. The Tribunal directed further criticism towards Commerzbank by reasoning that the litigation was a private matter and the publicity surrounding the claims did not affect Commerzbank’s reputation as alleged.  The nature of the judgement in this case highlights the need to consider very carefully the actual rationale behind any decision relating to perceived pre-employment misrepresentations.

The above cases notwithstanding, what are the options available to employers?

If the misrepresentation is discovered after the employment commences, the employer can:

• dismiss without notice where the dishonesty is significant enough to amount to a serious, repudiatory breach entitling the employer to treat the conduct as a breach of trust and confidence which brings the employment relationship to an end.  Clearly, this course of action involves the most risk for the employer, and as indicated by the cases set out above requires careful consideration of each case on its facts (particularly if there may be any discrimination implications); or
• dismiss with notice (in accordance with the terms of the employment contract) where the breach is not clearly repudiatory.  From a pragmatic perspective, this option also may be preferable as a means of facilitating a smooth departure.

If the misrepresentation is discovered before the employment commences, on the other hand, the employer is (as a basic rule) in a stronger position – retracting an offer (subject to any relevant terms of the offer letter, and in the absence of any discriminatory intent) may be easier to defend than dismissing an employee once they are in post. 

The key message, therefore, is that prevention is better than the cure.  Understandably, in a climate of pressure to reduce costs there is a risk that pre-employment checks may slip through the cracks in the melee of satisfying recruitment needs.  However, the implications for an organisation of hiring the wrong person into a role potentially can have not only financial but also serious reputational and (in relevant industries) regulatory consequences.  It is therefore essential to verify applicants’ identities and, at the very least, the key information provided in their application – namely, previous employment and qualifications.  Whether that is through rigorous checks conducted internally, or the use of pre-employment screening offered by professional providers (the use of which, incidentally, has been shown to result in around a 15% drop out rate when communicated to applicants in advance), can save a lot of heartache – as well as money – in the longer term.