Employment background checks are becoming increasingly common these days. The reasons for this include the fact that negligent hiring lawsuits that result from the actions of an errant employee can damage a company’s credibility and lead to hefty fines; companies have become more selective in their choice of employees following the threat of terrorist activities; accepting a resume at face value has resulted in many companies wasting time and money due to frequent hire-and-fire situations. Also, more companies are now conducting employee background checks as information from databases all over the world is available online. Employers are not bound to conduct an employment background check in all cases; however, federal and state laws make employment background checks compulsory for jobs that require interacting with children, the infirm, and the aged.

Information that can be included in an employment background check includes driving records, details of past employments, criminal records, military records, educational records, character references, and drug test records. However, background check companies that provide information to employers have to abide by the Fair Credit Reporting Act (FCRA) which regulates the type and amount of information that an external agency can provide to an employer. Bankruptcies that are more than 10 years old as well as civil suits and records of arrest more than seven years old cannot be reported. FCRA regulations vary with the state and agencies that carry out a pre-employment background check need to ensure that they comply with the state regulations.

Employment background checks can be conducted by companies in-house or can be outsourced to third parties that may include private investigators, H.R firms that screen applicants, and data brokers who are established online. Outsourcing an employment background check has its advantages but if a third-party is conducting a background check, consent from the applicant is required and under FCRA regulations the applicant should be provided with a copy of the investigations. If the employment background check is conducted in-house, the employer is not bound to obtain the applicant’s consent or apprise him in detail of the reason for rejecting his application.

In the case Saggar v Ministry of Defence [2005] , it was held that an overseas based employee of a British business, who was a UK resident when recruited or at any time during the course of the employee’s employment, is entitled to bring a discrimination claim in the UK . The claim can be brought even if the employee did no further work in Britain after the move overseas.

After 16 years at a Ministry of Defence base in Britain , Lieutenant Colonel Surinder Nath Saggar was permanently stationed in Cyprus from 1998 and was still there when he made a claim for race discrimination.

The Employment Tribunal decided that Lieutenant Saggar worked wholly outside Britain and could not file a race discrimination claim in Britain . He appealed against this decision to the Employment Appeals Tribunal (“EAT”).

The EAT dismissed the appeal and held that:-

In order for Lieutenant Saggar’s claim to succeed, the EAT would have to look at the whole of his employment from 1982 onwards, and that would be “absurd”;

The EAT was bound by the decision of the Court of Appeal in the case of Carver v Saudi Arabian Airlines [1999] where for the purposes of establishing whether or not a tribunal has jurisdiction to hear a claim, it is necessary to consider whether, at the time of the alleged discrimination, the claimant was wholly or mainly working in Great Britain;
Accordingly, at the time of the alleged discrimination, Lieutenant Saggar worked wholly in Cyprus .
The case went to the Court of Appeal and it was decided that: -

The relevant period for determining whether a claimant worked wholly or mainly outside Great Britain is the whole period of employment;
This approach was supported by the wording in s 8(1) of the Race Relations Act 1976; and
This decision applied equally to all employees even though a person serving in the Armed Forces is not an employee as there is no contract of service.
The matter was remitted to a different tribunal to determine the issue of jurisdiction in accordance with the Court of Appeal’s judgment.

Comment: This is a significant decision in favour of employees. This means that in many cases where employees are posted abroad they are entitled to bring employment claims in the UK . In practice, as well as complying with the rules of the country where employees are working, it would be sensible for employers to apply English employment law standards as well.

In the case of Mark Hone v Six Continents Retail Limited (2005), a pub landlord having collapsed due to overwork successfully sued his former employers in the County Court for breach of duty of care.

Mr Hone, the claimant, started working for Bass (now Six Continents) as a pub manager in 1995 and in 1998 was awarded “Pub Manager of the Year”. However, in 1999 he started working at The Old Moat House where he found himself working 13 hour days.

He repeatedly complained to his employers that he was overworked but the employers took no action. He had no assistant manager and other staff members, who left, including two chefs and an administrative worker, were never replaced.

Mr Hone, who had refused to sign a clause opting out of EU legislation that limits the number of hours an employee works, began suffering from headaches and insomnia. In May 2000, he collapsed at work suffering from an anxiety disorder. In 2004, Mr Hone sued Bass for breaching the duty of care owed to him as an employee.

The first instance court ( Swansea County Court ) held that:

Bass had not taken reasonable steps to ensure that Mr Hone did not work over 48 hours, which was likely to cause injury to his health, and that resources were available to employ more support staff for him; and
Bass should pay Mr Hone £21,000 in damages.
Six Continents (formerly Bass) appealed this decision to the Court of Appeal who upheld the Swansea County Court’s judgment