Name of weekly column: Speechly speak

This week's contributor: Matthew Whelan, solicitor, Speechly Bircham

A controversial new register, introduced last month, may give rise to as many problems as it seeks to solve.

The National Staff Dismissal Register allows members (mainly in the retail industry) to access a database containing personal information of ex-employees who have been dismissed due to, or left while under suspicion of, theft and dishonesty.  No criminal conviction is necessary before a registration is made, although it appears certain procedures that purport to protect individuals must have been followed prior to the registration.

So why has the register proven so controversial? Significant concern has been expressed about the adequacy of the safeguards surrounding it. There is a clear potential for abuse of the system and an individual can be registered on the basis of the employer’s suspicion of an offence. An individual could find his career blighted by the registration. Some have described the scheme as an Orwellian nightmare while others say the innocent have nothing to fear and the register is needed to prevent dishonest employees remaining in the industry.

Abuse

One can see the potential for abuse. This could be used as a stick to beat employees and employers could act maliciously and record the individual’s name on the register out of spite where no dishonesty existed. For example an employer could encourage an employee to sign a compromise agreement containing a promise not to register them. 

Even in the absence of any such abuse, mistakes do happen. There is no way that any organisation can guarantee that people will only be registered with good cause. Who will take responsibility if those mistakes happen and an ex-employee suffers? Once a registration is made the damage may already have been done. 

Employees who are at risk are likely to be those who need protection, because for example they may not be aware of the register, or how to find out if they have been registered and if they find they are on the register and do not believe their name should be recorded they do not have access to legal advice to enable them to properly challenge or defend themselves. The protection afforded by having a right to make representations before a dismissal is registered may not be enough.

Reducing losses

The scheme is being introduced as part of an initiative to reduce losses caused by staff dishonesty. A laudable objective on the face of it. There must however be a balancing exercise between the objectives and the consequences. The potential for abuse is heightened by the disparity in power between the employers who are likely to be in the scheme and the employees whose details will be registered. There are alternatives, and indeed employers may only be considering using this system given the reluctance of employers to give meaningful references and to complete thorough checks on the employees work history.

It also stands contrary to the government’s stated objective of discouraging litigation as it will encourage people if dismissed to take their cases to the tribunal to clear their names.

Should you use the system?

All this begs the question should employers be using the system? If as an employer you are a member of the system and you register an individual, there could be legal consequences. One can imagine situations where an employer could face allegations of discrimination. If successful, this could lead to an uncapped award for loss. The registration will inevitably make it more difficult for an employee to get another job, meaning that an employee could be entitled to a higher level of loss in respect of ordinary unfair dismissal, subject to the cap on compensation which is currently £63,000. An employee may also have recourse in other areas of law, including defamation, misrepresentation and under the law governing data protection. There could also be human rights based challenges.

You need be less concerned about relying on the register when making recruitment decisions, although there are still risks. If, for example, a job applicant has been registered and claims that such registration is discriminatory, then this could lead to an allegation of discrimination against you if you rely on it.

Taking advice

At the very least, legal advice should be taken before becoming a member of the scheme and before relying on the register. There is a clear concern about the scheme which has led to significant criticism of it. Some larger employers have distanced themselves from the scheme as has the Home Office who funded some of the research. 

Unions have openly declared their concern and will be watching how things develop. As the unions have always fought against employers operating a blacklist of employees they may well seek ways in which the register can be challenged. Given the difficulties that employers and the operators of the system may encounter to ensure they do not fall foul of the data protection laws we may see a legal challenge as to its legality in due course.

So, be careful and, if you are thinking of joining, obtain full details of the scheme and take legal advice.

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