VIC New Business - Privacy and Defamation Risks Providing Job References Online?

Australia's #1 for Law
Join 150,000 Australians every month. Ask a question, respond to a question and better understand the law today!
FREE - Join Now

Jase L

6 June 2015
We are in the process of launching a website and would like to ask some legal questions under this commercial law legal advice forum.

Our vision is to streamline the job referencing process using the power of the internet. Our website will provide potential employers with the opportunity to create and view candidates’ references online.

The website works as follows:
  • Any registered user who knows the individual is able to give them a reference. We also encourage people to invite former employers and other people of interest with whom they have a good relationship to give them a reference.
  • By default, a reference can be seen only by the author (who wrote it) and the owner (who it is about). Others can be given access which is controlled solely by the owner.
  • The owner controls who can see their references, but they cannot pick and choose which references to share. This will prevent people from sharing only glowing references.

We understand that providing information about somebody to a third party can be risk to privacy and subject to Slander and Defamation Laws, however our website provides the references only to the person whom the reference is about - it is then up to them to distribute to potential employers or recruiters etc.

In saying that, we still have some queries in relation to the above.
  • Can you identify any issues with this venture?
  • What can we do to protect ourselves and limit liability?
  • Are there any specific clauses that you would recommend to be included in the Terms & Conditions?

Sarah J

Well-Known Member
16 July 2014
Melbourne, Victoria
Hi Jase,

Here are some of my thoughts:

Can you identify any issues with this venture?

You've correctly identified that your idea leaves people vulnerable to having their reputations tarnished. However, if the candidate themselves choose who to send their references to, then they are the ones publishing the information. There would be no defamation in this case. However, it might still leave candidates unhappy with their reputations being tarnished. From a business perspective, have you thought about mechanisms to minimise untrue reviews from being published? Example: is there any way for the website to verify the positive/negative references? Is there any way for a candidate to dispute a negative reference? Do negative reviews expire after a number of years?

If there is a possibility that negative reviews will be sent to potential employers without the candidate's consent, then this may leave your business open to defamation.

What can we do to protect ourselves and limit liability?

Have a good T&C and Privacy Policy. Make these easily assessable to users, make these easy to read and highlight any important parts in these documents on the main webpage.

Make sure users know exactly when:
  • It's Their private information will be seen by third parties;
  • How to change their privacy settings;
  • What privacy information is being seen under each setting;
  • It data is being collated on user behaviour, disclose this.
Make sure your users understand that by signing up and using your service, they are agreeing to having negative reviews published along with positive reviews. If your website does not verify the reviews, or the people who write them, then disclose this to your users. The key to minimising risk to disclosure, making sure your users understand, and making sure they consent to this before using your service.

Are there any specific clauses that you would recommend to be included in the Terms & Conditions?
Almost every term is important in a T&C. Otherwise they would not be included. However, some important terms to alert users to are:

  • What actions count as "accepting the T&C";
  • Making sure they understand the concept of your website and the review system;
  • Linking them to the Privacy Policy;
  • Giving them an option to fully delete their profile if they do not agree with the T&C;
  • Disclaimer to employees (and users) that information on your website has not be independently verified and may not be accurate or complete;
  • Limitation of liability clause;
  • If information is being sent/disclosed to third parties, you need to disclose this in your Privacy Policy (and preferably, also your T&C).