Some employers have rules about the employment of spouses and relatives of existing employees. Are these rules legitimate?
This is a topic we regularly receive questions about. Here are some of the key issues to consider in your recruitment policy.
Q: We have been asked by our parent company in the US to introduce a policy prohibiting the employment of a current employee’s spouse or a relative of a current employee.
This is based on removing any perception of nepotism on the company’s part, regarding the hiring or promotion of a spouse or relative, and the detrimental effect this may have on workplace morale.
Although this may be a valid policy in the US, can we implement a similar policy in Australia, or is the company potentially liable for a breach of anti-discrimination legislation?
A: There are legal concerns with any company policy which prohibits the employment of a spouse or relative, purely on the grounds of being a spouse or relative of a current employee.
Such a policy could be deemed discriminatory — on the ground of marital status, for example.
As with any company policy or procedure, the employer must have an objective (unbiased) reason for implementing such a policy.
For example, there would be legitimate reasons for ensuring a current employee cannot be directly involved with, or influence the selection of, a relative or spouse for work at the company, or the performance of work under the supervision of a relative or spouse.
The objective reason justifying such a policy is that a person is hired or promoted on their merits, otherwise it could be perceived as a conflict of interest, with the hiring or promotion of a spouse or relative being financially lucrative for the individuals concerned.
An employer could not justify such a policy on a subjective proposition based on a stereotyped view of how people of a particular marital status behave, eg that married people cannot work together, or that any criminal activity of one partner will affect the other.
While discrimination against an existing employee because of who their spouse is won’t be against the law in every situation, it would be more appropriate that an employer deals with each individual case on its merits, rather than having a specific company policy on the issue.
Similarly, there would also be problems for an employer in the context of unfair dismissal laws, if the reason for dismissal was because of the employee’s marital status or family relationship.