Employee misrepresentation – what can you do when an employee lies on their CV/job application?

The last few years have seen several high profile cases of senior executives being ‘caught out’ providing fake or misleading information on their CVs/ job applications.

These include Andrew Flanagan (appointed as Myer’s GM Strategy & Business Development based on false claims about previous executive roles and false referees), Vish Nandlall (Telstra’s Chief Technology Officer who was dismissed after 21 months when it emerged he did not have an MBA from Harvard as claimed) and Veronica Theriault (the Chief Information Officer of South Australia’s Department of Premier and Cabinet who falsely claimed to have 20 years’ experience working for large technology firms including Wotif and used a photo of a supermodel on her LinkedIn profile).

Flanagan (who fell on his sword when questioned on his first day on the job) later pleaded guilty to four fraud-related charges concerning multiple false claims about his expertise and qualifications he had made to previous employers. Theriault also pleaded guilty to fraud and dishonesty charges.

These cases demonstrate the significant reputational damage that can be caused when a deficient recruitment process allows a candidate to (at least initially) get away with such blatant deception, and how even sophisticated and highly resourced organisations can be fooled. Regardless of the size of the organisation or the seniority of the role, the risks to a business of appointing (or continuing to employ) someone who lacks the necessary experience and skills/qualifications or whose honesty and integrity is thrown into question also cannot be understated.

The following recent NSW Supreme Court and Fair Work Commission cases provide further insight into how employers may respond when they discover they have been duped

Stapleton v City of Parramatta Council¹

Facts

• Mark Stapleton was appointed CEO of the City of Parramatta Council (Council) on 27 June 2018, after approximately 12 months as its Director of Property and Significant Assets.
• Media reports emerged a few weeks later that Mr Stapleton’s CV was incorrect in material respects.
• On 7 September 2019, Council suspended him on full pay and appointed an external investigator to conduct a review to confirm the authenticity of his work experience, qualifications, references and other claims in his application for both roles (as well as the recruitment process which led to Mr Stapleton’s appointment to both roles).
• The external review was completed and, after considering the confidential report at a meeting on 4 February 2019, Council resolved to ‘negotiate’ with Mr Stapleton in relation to his employment contract.
• Mr Stapleton applied to the NSW Supreme Court for interim orders preventing Council from terminating his employment until the end of the maximum term specified in his employment contract (January 2021). His arguments included that Council had not followed the dispute resolution procedure in his contract and this case was an exception to the general principle that a Court will not grant specific performance of employment contracts because if he was dismissed it would be assumed it was because of an adverse finding in the external review (given the fact of the review was in the public domain) and the damage to his reputation could not be adequately remedied in damages.
• Mr Stapleton reportedly also issued separate defamation proceedings in respect of the media reports.

Decision

• A one-week injunction was granted on an ex parte basis, but at a subsequent hearing, the Court dismissed Mr Stapleton’s application for interlocutory relief and ordered him to pay the Council’s costs on an indemnity basis.
• The Court was not satisfied that there was a serious question to be tried as:

–  There was no evidence of any imminent threat to terminate Mr Stapleton’s employment or that Council had departed from its stated intention to negotiate with Mr Stapleton; and

–  Mr Stapleton had failed to disclose a cause of action (and his submissions regarding specific performance were also rejected) as Council had an express right under the contract to terminate his employment without cause on 38 weeks’ notice (or payment in lieu) and was not required to follow the disputes procedure before exercising this right.

• Two days after the Supreme Court’s decision, Council dismissed Mr Stapleton.

Tham v Hertz Australia Pty Limited t/as Hertz²

Facts

• Mr Tham was employed by Hertz as a casual Vehicle Services Attendant in November 2016.
• When applying for the role, Mr Tham submitted a resume setting out his employment history and signed an acknowledgement on the application form which stated “I understand that providing false information or withholding information relevant to my application for employment with Hertz may result in the withdrawal of an offer of employment or termination of employment”. He signed a further acknowledgement to that effect when offered the role.
• His employment contract (which he signed) included the following:

“You are required to…perform the responsibilities and duties honestly and in a proper and efficient manner.”

• Hertz developed concerns about Mr Tham’s character after he made a range of complaints and claims to various authorities including a workers’ compensation claim that Hertz considered was fraudulent. This led to Hertz making enquiries regarding his previous employment history and discovering that he had been employed by a previous employer for eight months, not five years as he had claimed.
• Hertz notified Mr Tham that he was required to attend a disciplinary meeting the following day regarding allegations of dishonesty and meanwhile he was suspended without pay. Mr Tham requested more time to prepare for the meeting and arrange a support person, which Hertz refused.
• Mr Tham immediately went to the doctor and was certified as unfit for work for the next week. He also made a police report alleging that the HR Manager had assaulted and racially abused him in the carpark that day (which the HR Manager later denied).
• Mr Tham did not attend the disciplinary meeting or provide prior notice of his non-attendance, but later that day emailed certificates of capacity to Hertz. Shortly after this, Hertz’s HR Manager (to whom Mr Tham did not send his certificates) emailed him a termination letter.
• Mr Tham lodged an unfair dismissal claim in which he claimed, amongst other things, that he had advised Hertz prior to and at his interview that there was a ‘mistake’ in his CV and they told him not to worry. He also argued his shorter prior work history did not impact on his capacity to fulfil the inherent requirements of the role.
• At the hearing, Hertz produced evidence of numerous other inaccuracies in Mr Tham’s CV regarding his previous employment and argued that he had deliberately falsified information to disguise the fact that he had been dismissed by his previous employer and had taken legal action against numerous previous employers.

Decision

• In dismissing Mr Tham’s application, Commissioner Harper-Greenwell found Mr Tham was not a credible witness in that he ‘feigned ignorance when it suited him, was prone to exaggeration and [she] found much of his evidence to be inconsistent and self-serving.’ She preferred the evidence of Hertz’s witnesses who she found to be open and honest.
• The Commissioner rejected Mr Tham’s ‘implausible’ explanation for the numerous factual errors in his CV and did not accept that he had advised Hertz of this before he commenced. She found he had intentionally misled Hertz into believing he had a history of stable and long term employment. The gravity of his deceit put into question Hertz’s ability to trust him to perform his role (which included being the point of contact for returned vehicles which sometimes contained valuables) with honesty and integrity and therefore constituted a valid reason for dismissal.
• The Commissioner found that 24 hours’ notice was sufficient time to prepare for the meeting and arrange a support person, but Mr Tham was not given a sufficient opportunity to respond to the allegations as the HR Manager acted too hastily upon his failure to attend. However, this procedural deficiency would not have changed the outcome and other mitigating factors (including financial hardship as his termination due to misconduct resulted in the loss of his WorkCover payments) were also insufficient to render the dismissal harsh, unjust or unreasonable.

Tips for Employers

• Ensure any prerequisite qualifications/experience are clearly documented.
• Require job applicants to sign an acknowledgement similar to the one above.
• Ensure employment contracts contain an appropriate ‘duties’ clause and a warranty that the employee has disclosed all relevant information and all information provided is accurate.
• Ensure your reference check process is as robust as possible (and be wary of relying solely on third party providers who have a vested interest in the placement of the candidate).
• Conduct reference checks/verify key previous employment or qualifications before short-listing or identifying a preferred candidate and use published contact details (not those provided by the candidate).
• Require candidates to provide certified copies of any required licences/qualifications.
• Cross-check information provided by candidates with their LinkedIn profile (and if professionals don’t have one, this should raise a red flag).
• Keep records of interviews (Hertz did not have a record of who was present during Mr Tham’s interview when he claimed to have advised them of errors in his CV).
• Be mindful of defamation laws when making allegations or public comments (Parramatta City Council, Myer and Telstra sensibly all avoided publicly stating that the reason for the employee’s departure was due to fraudulent CV claims).

What can you do if you discover the truth before the candidate starts?

You may be able to safely withdraw the offer depending on the nature/extent of the misrepresentation(s), how they relate to the role offered and whether your prerequisites (and the consequences of providing inaccurate or incomplete information) were made clear to the candidate.

What can you do if you discover the truth after employment has commenced?

• If still during the minimum employment period, the employee cannot bring an unfair dismissal claim (but assess the risk of a successful general protections claim).
• Otherwise (and to mitigate the risk of a successful general protections claim):

–  follow the normal disciplinary process including giving the employee an opportunity to respond;

–   consider whether there is a valid reason for dismissal based on the nature/extent of the misrepresentation(s), whether it was deliberate, how the misrepresentations relate to the role and whether your prerequisites (and the consequences of providing inaccurate or incomplete information) were clear; and

–  consider any other mitigating factors including length of time in the role and employment record.

• Summary dismissal may be appropriate if the employee’s conduct³ constituted:

–    fraud (unless in the circumstances employment during the notice period would not have been unreasonable); or

–   ‘wilful or deliberate behaviour…that is inconsistent with the continuation of the contract of employment’; or

–   ‘conduct that causes serious and imminent risk to the health or safety of a person or the reputation, viability or profitability of the employer’s business’.

• Otherwise, dismissal with notice (or payment in lieu) in accordance with the employment contract and the NES may be appropriate.

If you would like advice or assistance with any of the above issues, please contact a member of our Workplace Relations team.

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¹ [2019] NSWSC 123 (18 February 2019)
² [2018] FWC 3967, upheld on appeal in [2018] FWCFB 5972.
³ Even if the misrepresentation was made prior to the employment commencing, the employee’s failure to correct this during the employment can amount to a continuing misrepresentation such as to bring it within this definition in Regulation 1.07 of the Fair Work Regulations 2009.

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