8 min read

Legal and Ethical: How to Handle Background Checks Legally

In Australia, background checks must balance due diligence with privacy and fairness. This guide explains how to conduct legal and ethical background checks through clear consent, compliance with key laws, and best-practice hiring steps.

When you recruit, you want the right people walking through your doors. But in Australia, you cannot simply peek into someone’s history without following the rules. If you skip steps, you might find yourself with more than just a bad hire—you could be in hot water legally. That is why you need to handle background checks legally. It protects your business, your candidates, and your reputation.

This guide will walk you through background check laws, consent, and legal obligations in Australia, with clear and practical advice.

Why Background Checks Matter

Hiring is not a guessing game. You want to know if a candidate’s past matches what they say on their resume. A background check can confirm skills, check for risks, and give you peace of mind. Think of it like checking under the hood of a car before you buy it—you would never just drive off the lot without lifting the bonnet first.

But here is the catch: you cannot just check anything you like. Laws in Australia put guardrails around what you can and cannot do. These laws are designed to protect candidate privacy and make sure everyone gets a fair chance.

Know the Background Check Laws in Australia

Australian laws do not take a back seat when it comes to privacy. You need to follow specific rules when conducting checks. Key frameworks include:

Privacy Act 1988 – Sets the standard for how you handle personal information.
Australian Human Rights Commission Act 1986 – Prevents discrimination during recruitment.
Fair Work Act 2009 – Guides workplace practices and fairness.
State and territory laws – Cover additional requirements, like police checks.

These laws mean you cannot dig for irrelevant details or use information to unfairly treat a candidate. For example, if a police check shows something minor from years ago that does not relate to the job, you need to think carefully before making it a deal breaker.

Consent is Non-Negotiable

Consent is the golden rule. You must ask candidates for permission before you run any background check. That means a clear, written request that explains:

What information you will check.
Why the check is needed.
How the information will be used.

Think of it as knocking on someone’s front door before stepping inside. If you skip this, you are trespassing. Not only is it disrespectful, but it also exposes your business to legal risks.

RefHub makes this process simple with easy-to-follow consent forms and guides. You can find templates and hiring resources at RefHub’s free guides and templates.

Your Legal Obligations as an Employer

When you handle background checks, your legal responsibilities do not stop at getting consent. You must also:

Use the information fairly – Only consider details that relate directly to the role.
Keep data secure – Protect personal information from misuse or leaks.
Give candidates a chance – If negative information comes up, allow them to explain.
Avoid discrimination – Do not use irrelevant history as a reason to reject someone.

Imagine you are fishing. The goal is to catch the right fish, not to scoop up everything in the ocean. Narrow your checks to what is relevant to the role. For example, if you are hiring for a finance position, credit history may be relevant. If you are hiring for a forklift operator, it is not.

Types of Background Checks in Australia

There are several types of background checks you may use, but each comes with its own rules.

Police Checks – Confirm criminal history. Required for many sensitive roles.
Employment History Checks – Verify past roles and responsibilities.
Reference Checks – Gather insights from past supervisors or colleagues.
Education Checks – Confirm qualifications and training.
Credit Checks – Used in financial services or roles with money handling.
Working with Children Checks – Required if the role involves children.

Remember, just because a check exists does not mean you should run it. Always connect the check to the job requirements.

Common Pitfalls to Avoid

Even with the best intentions, employers often stumble. Here are mistakes you should steer clear of:

Skipping consent – A guaranteed way to land in trouble.
Asking for irrelevant information – Leads to claims of discrimination.
Not securing data – Exposes sensitive information.
Failing to give feedback – Candidates have the right to respond if negative results appear.

If you cut corners, you might save time today but pay for it tomorrow with legal issues or reputational damage.

Best Practices for Handling Background Checks Legally

To stay compliant and ethical, follow these steps:

Define the purpose clearly – Know why you are running the check.
Get informed consent in writing – Always.
Limit the scope – Only check what is relevant.
Cozmunicate openly – Keep candidates informed.
Secure the data – Protect privacy with safe storage.
Review results fairly – Allow candidates to respond.
Document everything – Keep a record of consent and results.

RefHub provides clear workflows and tools that support these best practices, making compliance easier to manage.

Why Ethical Practice Matters

Even if you can do something legally, that does not always mean you should. Ethics are about fairness, respect, and trust. A transparent approach builds credibility with candidates and helps you attract talent that values integrity.

Think of it as gardening. If you plant seeds in poor soil, do not expect strong roots. The same goes for recruitment: if you start with unfair or unclear practices, you will not build long-term trust.

Internal Resources to Support You

If you want a clear roadmap for hiring, RefHub offers free guides and templates. These resources will help you prepare documents, structure your process, and stay aligned with background check laws.

Conclusion

Handling background checks is not just about ticking boxes. It is about following the law, respecting candidates, and protecting your organisation. When you commit to handle background checks legally, you shield your business from risk and show candidates that fairness matters.

RefHub can support your hiring journey with tools that simplify compliance, guide you through legal obligations, and give you peace of mind.

Recruit with confidence. Make your process fair, legal, and ethical with RefHub. Access free hiring resources today at RefHub’s guides and templates.

‍