A recruiter has been successfully sued for representing a reference check supported a candidate as “outstanding” when no such check had been made.
In the case of Driver Recruitment v Wedeco the NSW Court of Appeal dismissed an appeal against a district court judge who awarded damages of $164, 224 against the recruiter primarily under s 52 of the Trade Practices Act 1974.
The candidate, was employed on the basis of the reference check as the Sales Manager for South East Asia. He committed credit card fraud against his new employer and had a reference check been carried out – it would have been revealed he was close to termination at his prior employer.
The lesson for employers is two fold. One – the best reference checks are carried out by you. You know the job, you know the questions that should be asked (i.e. skills, competencies and experience), you know your own culture and the fit needed. Second, if you decide not to do it yourself – get appropriate detail from the recruiter to satisfy yourself of all of the above. Winning damages is all a bit too late for your business. The damage is done.