Powerchex - Pre-employment screening newsletter

ISSUE 48 AUGUST 2009	www.powerchex.co.uk

Welcome to this month's Powerchex update:


	Also in this issue • Articles of interest • FSA News • Conferences & Events

This month we are delighted to have Shazia Ali-Webber as our featured author. Shazia is a very experienced employment lawyer with Mills & Reeve, and in her article she is revisiting the legal aspects of referencing. An excellent writer, Shazia, has taken a practical, yet thoughtful approach to her subject. Read on.

As the summer heats up, so does the regulatory pressure from the FSA. The big news this month is the large fine that was handed to HSBC for breaching data security as was laid out in the FSA’s Data Security Report. Also the information commissioner has made some changes on their guidance regarding privacy statements, which need to be looked at by all data controllers. It is becoming clear that all organisations that work with sensitive personal data, must revisit their data security processes as well as those of their third party suppliers.

The perils of providing a reference
By Shazia Ali-Webber, Senior Solicitor,
Mills & Reeve LLP

In the employment market a reference from a former employer can either make or break a candidate’s career. However in an increasingly litigious society, employers must be aware that their legal obligations may extend both to providing a reference and what should go in it. There is a good deal of mythology surrounding what can and cannot be said in a reference. Here are some key factors to consider before providing a reference.

There is no general duty to provide a reference for an employee or ex-employee. However this does not apply to those in the financial services industry who may be obligated to do so under the terms of the Financial Services and Markets Act 2000. In general it is best to have a company policy about whether or not a reference will be provided. Even where there is no policy or other legal obligation to provide a reference, failure to provide a reference can give rise to liability. Where it is the employer’s normal practice to provide references but he / she refuses to do so in a particular case, the individual concerned could claim that failure to provide one is discriminatory (if they fall into a category protected by discrimination legislation) especially in the absence of an adequate explanation from the employer.

If an employer does provide a reference then the “golden rule” is that it owes duties towards both the ex-employee and the recipient of the reference to take reasonable care to ensure that the information contained within it is true, accurate and fair.

Read this article in full

		About Shazia Ali-Webber Shazia has extensive experience of acting for commercial clients including SMEs, multi-nationals and US companies. Her recent experience spans public sector and higher education clients. She specialises in post termination matters, corporate support work and managing employment relations. Shazia’s recent work includes advising on the TUPE implications of business transfers; conducting litigation in respect of race and disability discrimination including advocacy and preparation of witness statements, advising on the merits of individual claims, advising on post employment matters such as references, conducting training seminars and advising on termination of employment. Shazia Ali-Webber is a Senior Solicitor for Mills & Reeve LLP read full biography

Articles of interest

Commercial Briefing Privacy Notices: New guidance from the Information Commissioner Clyde&Co, July 2009 Lloyds job cuts blight IT contractor recovery Contractor UK, 22 July 2009 Spoilt for choice on ex-banking employees FT.com, 20 July 2009 Contractors' Questions: What checks should I expect? Contractor UK, 17 July 2009 Things are better, but it’s still not really that good eFinancialCareers, 16 July 2009 Poe-litician's licence' -- Selective information is fair and accurate under the DPA Bristows, 15 July 2009 Has contractor recruitment turned a corner? eFinancialCareers, 15 July 2009 Financial services in recruiting drive CITY AM, 13 July 2009 Financial services recruitment increases after long slump Press release, 10 July 2009 White Lies in the City HERE IS THE CITY, 08 July 2009 Woman given $500k sexual harassment payout admits Centrelink fraud The Australian, 06 July 2009 Cases of fraud in the country soar in 2009, but even that isn't the full picture. Forbes.com, 03 July 2009 Landlords subject tenants to rigorous checks FT.com, 03 July 2009 Powerchex say pre-employment screening is a “must” as FSA hand out fine for poor practice Press release, 03 July 2009

FSA News

FSA confirms changes to the rules for approved persons The Financial Services Authority (FSA) has confirmed an extension of the approved persons regime for those that perform a ‘significant influence’ function at firms. In its supervisory enhancement programme (SEP) the FSA stated that it would place greater emphasis on the role of senior management, including non-executive directors (NEDs). Today’s policy statement sets out changes to the approved persons regime which improves FSA’s approach to ‘significant influence’ functions by ensuring that those likely to exert a significant influence on a firm fall within the scope of the approved persons regime. In particular, the FSA has: • Extended the scope and application of CF1 (director function) and CF2 (Non- Executive Director) to include those persons employed by an unregulated parent undertaking or holding company, whose decisions or actions are regularly taken into account by the governing body of a regulated firm; • Extended the definition of the significant management controlled function (CF29) to include all proprietary traders who are not senior managers but who are likely to exert significant influence on a firm; and, • Amended the application of the approved persons regime to UK branches of overseas firms based outside the EEA. Graeme Ashley-Fenn, director of permissions, decisions and reporting division, said: “It is important that directors and senior managers at firms understand their regulatory obligations and have the relevant competencies and experience to carry out their roles with integrity. “Since October 2008, the FSA has carried out 115 interviews for ‘significant influence’ posts at high impact firms. Nine applications have been withdrawn as a result. Once in post, where individuals fail to meet the required standards the FSA will consider enforcement action.” These changes will come into effect on 6 August 2009 with a transitional period of six months. Firms should now begin assessing which individuals require approval and submit timely applications to comply with the end of the transitional period. Full Policy Statement: http://www.fsa.gov.uk/pubs/policy/ps09_14.pdf Powerchex say pre-employment screening is a “must” as FSA hand out fine for poor practice PRLog, 23 July 2009 CEO's speech - FSA Annual Public Meeting FSA, 23 July 2009 FSA bans director for inadequate control of his firm and winds up the business FSA, 15 July 2009 Powerchex warns financial institutions on poor data security FinancialPublicity.com, 24 June 2009 HSBC firms fined over £3m for information security failings FSA, 22 July 2009

Conferences & Events

Managing Underperformance
JSB Training and Development, London, 26 August 2009

Strategic Recruitment
JSB Training and Development, London, 27 August 2009

Strategic Recruitment
JSB Training and Development, London, 27 August 2009

Employment Law Hong Kong and Singapore
JSB Training and Development, London, 7 September 2009

2nd Annual Leadership and Talent Management Conference
Strategic HR Network, Radisson SAS Portman Hotel, London, 9 September 2009

Stress and Mental Health @ Work:
Proactive Solutions Forum 2009
Symposium Events, London, 10 September 2009

Employer Branding Summit 09
Symposium Events, London, 15 September 2009

TUPE law and practice
Croner Training, London, 17 September 2009

The Annual Strategic HR Conference:
Maximising Business Potential for 2010 and Beyond
JSB Training and Development, London, 23 September 2009

Effective HR assistant
Croner Training, London, 24 September 2009

Talent Management Summit 09
Symposium Events, London, 13 October 2009

Employee Wellbeing Forum 09
Symposium Events, London, 21 October 2009

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