Background Verification of Employees: Does It Cover The Secrets?

Recently, Uber fired its Senior Vice President of Engineering, Amit Singhal after his non- disclosure of sexual harassment charges while he was at Google. He had failed to disclose the precise circumstances amid which he left Google. Uber executives found about the situation after Recode informed them of the chain of events between Singhal and Google. [1] Uber maintained that the company did extensive background checks of Singhal and did not uncover any hint of circumstance of his departure from Google. Infosys terminated employment of hundred employees due to discrepancies in their resumes and TCS fired twenty employees when their resumes were found to be fudged.[2] Carrying out through background checks is not merely a routine HR procedure but forms an important part of pre-employment screening. backgroundcheck To curb hiring employees who overstate their skills in the resume, lie about previous employment and academic qualification, companies and organizations not only carry out internal background checks but outsource the work to background screening agencies. Interestingly, there is no statutory requirement of background screening under Indian laws. The Indian Association of Professional Background Screeners[3] lists address verification (authenticating address of the candidate), employment verification(verifying dates, designation, salary, breach of contract, reason for leaving), education verification (verifying date of graduation, qualification, marks), reference checks (verifying professional references provided by the candidates), global data base check (check against various high risk databases available), local criminal background check (checking with relevant police departments for any criminal records), drug test (test for drug abuse) and credit checks (CIBIL) which could be carried out to authenticate the antecedents of a candidate. The RBI issued notices to banks requiring them to conduct a background check of personnel recruited as dealers from other banks. RBI has formulated guidelines for banks to conduct a background check of personnel recruited as dealers from other banks and not employ persons with a criminal background as recovery agents. NASSCOM in 2005 set-up the National Skills Registry[4] (NSR), a database of IT professionals in India which is maintained by National Securities Depository Limited. Unlike India, US has Fair Credit Reporting Act (FCRA) that promotes the accuracy, fairness and privacy of consumer information contained in files of consumer reporting agencies. It regulates collection, dissemination and use of consumer information including consumer credit information. In Europe, Safe Harbour Actwas declared invalid on October 6, 2015 and EU-US Privacy Shieldhas taken its place providing for strong obligations on companies handling Europeans’ personal data, clear safeguards and transparency on US government access, effective protection of EU citizens’ rights. As far as legal profession is concerned, Section 24 A of the Advocates Act, 1961 states that no person shall be admitted as an advocate on a state roll if he is convicted of an offence involving moral turpitude. In S. M. AnanthaMurugan v. The Chairman, Bar Council of India[5], the Madurai Bench of the Madras High Court directed that the State Bar Councils should get antecedents verified of all new law graduates compulsorily from their native place, place of study, from police for enrolment and not enrol any candidate convicted in any criminal case. To be on the safe side, third parties must carry out background verification with the signed consent of the candidates.[6] The Constitution of India does not patently grant the fundamental right to privacy. However, the Hon’ble Supreme Court of India included the right to privacy and freedom of speech and expression under Article 19(1)(a) and right to life and personal liberty under Article 21 respectively. Also, there is no restriction or prohibition against employers requiring medical examinations as a condition of employment but should be relevant for the purpose of services to be rendered. Correctly HIV test is not a precondition for employment.[7]There is no specific restriction against drug and alcohol testing of applicants but generally it is not carried out as a prerequisite for employment in India. For entities engaged in the collection and maintenance of personal data relating to individuals’ credit histories, the Credit Information Companies (Regulation) Act, 2005 attributes liability upon leakage or alteration of such data. For companieswhich collect personal information[8], Section 43A of the Information Technology Act, 2000 imposes the liability of paying damages as compensation to the person affected if there is wrongful loss or wrongful gain to any person. Companies and Organizations invest in their employees for growth and success. Companies provide employees access to privileged information making it susceptible to risks and threats. As employees impact the reputation, customer satisfaction and the revenue of the company, employee background check ensures that credentials of hires are verified. Author: Apurba Kundu, Senior Associate

[1]See Last visited March 9, 2017. [2] [3] See [4]See [5]2016(1)MLJ(Crl)53 [6]See the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011. [7]See Mr. X v. Chairman, State Level Police Recruitment Board) MANU/AP/0939/2005. [8] See Rule 3, The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011

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