Employment Reference Check Questions: Legal Guidance For Employers

Employment reference checks can be the difference between a great hire and a costly misstep. Done well, they help you confirm a candidate’s experience, spot red flags early and make a confident, fair decision.

But there are legal guardrails you need to know. Not every question is fair game, and how you collect and store reference information matters under Australian privacy and anti-discrimination laws.

In this guide, we’ll walk through what you can ask, what to avoid, and a practical, compliant process you can use for reference checks in Australia.

What Is An Employment Reference Check?

A reference check is when you contact a candidate’s nominated referee (often a former manager or supervisor) to verify employment details and get insight into their performance, conduct and suitability for your role.

Unlike personal references (friends or mentors), employment references should focus squarely on job-related behaviours and outcomes. The aim is to test key claims in a CV or interview, understand working style and reduce the risk of a poor fit.

Reference checks shouldn’t stand alone. They’re most useful when combined with interviews, skills assessments and verification of qualifications.

What Laws Apply To Reference Checks In Australia?

There’s no single law that “requires” reference checks. However, several legal frameworks shape what you ask and how you handle the information you receive.

Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs)

• Consent: There isn’t a blanket legal requirement to obtain consent before contacting a referee. That said, obtaining clear consent is best practice and, in many cases, helps you meet notice and transparency obligations. If your business is subject to the APPs, you should also provide an appropriate Privacy Collection Notice covering reference information.
• Collection: Under APP 3, personal information must be collected by lawful and fair means and be reasonably necessary for your functions (such as recruitment). Collecting sensitive information (for example, health information) is subject to stricter rules and typically requires consent.
• Notification: APP 5 requires you to take reasonable steps to notify candidates about what you’re collecting (including reference information), how you’ll use it, and who you may disclose it to.
• Storage and access: APPs require secure storage, limited use and disclosure, and a process for access/correction requests. Your Privacy Policy should reflect how reference information is handled.
• Small business exemption: Some small businesses under $3 million in annual turnover may be exempt from the APPs, but many employers still adopt APP-aligned practices as good governance and customer/employee expectation.

Anti-Discrimination Laws

Federal and state anti-discrimination laws prohibit discrimination during recruitment on protected attributes such as age, disability, sex, pregnancy, family responsibilities, race, religious belief and more.

This means your reference questions must be job-related and avoid topics that could reveal protected attributes unless strictly necessary to assess the inherent requirements of the role.

To keep interviews and reference checks on solid ground, align your questions with the same principles that apply to avoiding illegal interview questions.

Fair Work Act 2009 (Cth) – Adverse Action

The Fair Work Act prohibits adverse action (including refusing to employ someone) for certain unlawful reasons, such as exercising a workplace right or due to protected attributes. A consistent, documented process for reference checks helps demonstrate that your decisions are based on job-related criteria, not prohibited reasons.

Defamation and Related Risks

Referees should provide accurate, defensible information. Untrue statements that harm a candidate’s reputation can create defamation risk. Qualified privilege defences may apply to honest, job-related references given without malice, but they’re not a licence to speculate.

For employers receiving references, be mindful that a single negative comment shouldn’t decide the outcome without context. Consider corroboration and give the candidate a chance to respond. Claims like “misleading or deceptive conduct” typically arise in trade or commerce contexts; in most reference scenarios, the more relevant risks are defamation and (less commonly) negligent misstatement.

What Questions Can You Ask (And What Should You Avoid)?

Good reference questions are targeted, consistent and clearly tied to the role’s inherent requirements. They confirm facts and draw out specific examples of performance and conduct.

Compliant, Job-Focused Questions

• Can you confirm the candidate’s job title, dates of employment and reporting lines?
• What were their key responsibilities and typical workload in that role?
• How would you describe their reliability, attendance and time management?
• Can you share an example of how they handled pressure, competing deadlines or change?
• How did they collaborate with colleagues, clients or stakeholders? Any strengths or common challenges?
• How did they respond to feedback and coaching?
• Were any performance goals set? How consistently were those met?
• Were there any performance concerns addressed formally? If so, what was the outcome?
• Would you rehire them for a similar role? Why or why not?

If the role involves people leadership, safety-critical work or regulated duties, tailor questions to competency in those areas (e.g. WHS leadership, safeguarding processes, compliance with procedures).

Questions To Avoid

Avoid questions that touch on protected attributes or unnecessarily invade privacy. Steer clear of:

• Age, marital/relationship status, pregnancy or family responsibilities
• Race, cultural background, religion or political opinions
• Sexual orientation or gender identity
• Disability, medical history or mental health (unless strictly relevant to the inherent requirements of the role and handled lawfully)
• Union membership or lawful industrial activity

A simple rule of thumb: if the question isn’t necessary to assess whether the candidate can perform the role, don’t ask it.

How To Run A Compliant, Practical Reference Check Process

You don’t need a complex system to do this well. A short, consistent workflow protects privacy, reduces bias and gives you comparable data for each candidate.

1) Get Clear Permission And Set Expectations

While consent is not always legally mandated, we recommend obtaining written permission to contact named referees and explaining what you’ll ask and how you’ll use the information. This transparency aligns with APP principles and candidate expectations.

Let candidates know you’ll keep information confidential, and that it will be used solely for assessing their suitability for the role.

2) Use A Consistent Question Set

Create a standard question set for each role type, with room to probe based on the referee’s answers. Consistency helps you compare like-for-like and demonstrate a fair process across candidates.

Keep questions objective and linked to the job description and selection criteria.

3) Schedule The Call And Keep It Professional

Arrange a short call at a time that suits the referee. Introduce the purpose, confirm their relationship to the candidate and stick to work-related topics.

Avoid gossip or asking for off-the-record commentary. If the referee wants to provide sensitive information, guide the discussion back to specific, job-related examples.

If you plan to record the call, obtain consent and check your obligations under relevant phone call recording laws. In some jurisdictions, all parties must consent before a recording is made.

4) Document Accurately And Neutrally

Write up what was said in a neutral tone. Avoid editorialising or making sweeping conclusions. Note examples, dates and objective indicators where possible.

Keep notes focused on the agreed question set, and store them securely with other recruitment records.

5) Address Negative Or Inconsistent Information Fairly

If something material emerges that conflicts with the candidate’s account, consider:

• Asking the referee a follow-up question to clarify specifics
• Checking a second referee to corroborate
• Giving the candidate an opportunity to respond, especially if the issue may affect your decision

This balanced approach helps you make a defensible, evidence-based decision.

6) Avoid Unnecessary Intrusion Into Sensitive Areas

If a referee volunteers sensitive information (for example, medical details), steer back to the inherent job requirements. Assess fitness for the role based on capacity to perform duties, reasonable adjustments (if applicable) and objective performance history, not protected attributes.

7) Close The Loop And Maintain Transparency

Where appropriate, let the candidate know when the reference stage is complete. You don’t need to disclose specific comments, but a simple status update keeps the process respectful and transparent.

Tip: Be Careful With Recordings And Surveillance

If you’re considering recording reference calls or using transcription tools, make sure your approach is lawful and consistent with your privacy settings and any relevant recording laws in Australia. Always get consent if required.

How Should You Store And Manage Reference Information?

Reference notes are personal information. Treat them like any other sensitive recruitment record.

• Security: Store notes in a secure HR system with access limited to those involved in hiring decisions.
• Retention: Keep them only as long as you reasonably need them for recruitment purposes. Align this with your document retention policy and any business needs, then securely destroy them.
• Transparency: Ensure your Privacy Policy and Privacy Collection Notice reflect that you collect and use reference information during recruitment.
• Access and correction: If your business is subject to the APPs and a candidate asks to access their personal information, consider the request under APP 12 (subject to any applicable exemptions).

Good data hygiene isn’t just a legal compliance issue; it builds trust with candidates and protects your brand. If you’re building out your broader approach to storing HR records, it’s worth reviewing your obligations under data retention laws that may apply to your business.

Should You Rely Solely On References?

No. References are one input among several. Combine them with interviews, practical assessments and verification of qualifications or licences (where required for the role). A well-rounded process reduces the risk of over-weighting a single referee’s perspective.

What Internal Policies And Documents Help?

Documented, repeatable processes make reference checks easier and safer. Consider:

• Recruitment policy and procedure that sets out when and how reference checks are done
• Workplace Policies (including privacy and data handling expectations)
• Standardised reference question templates tailored to role families
• Clear offer process and a robust Employment Contract once you’re ready to hire

These tools help your team apply the same high standard every time, reducing the chance of errors or inconsistent treatment.

Common Pitfalls To Avoid

• Contacting referees without telling the candidate (even if not unlawful, it can undermine trust and transparency)
• Asking questions that reveal protected attributes without a lawful, job-related reason
• Sourcing references from social media or informal channels without verifying accuracy
• Recording calls without proper consent or in breach of surveillance laws
• Keeping reference information longer than necessary or storing it in unsecured locations
• Letting a single negative comment dictate an outcome without corroboration or candidate input

Key Takeaways

• Keep reference questions job-related, consistent and evidence-based; avoid topics that could reveal protected attributes unless genuinely necessary for the role.
• Consent to contact referees isn’t always legally required, but obtaining clear permission and providing privacy notices is best practice and supports transparency.
• If you’re subject to the APPs, collect reference information lawfully, notify candidates, and store it securely in line with your Privacy Policy.
• Be cautious with recordings and sensitive information; check recording laws and keep the discussion focused on inherent role requirements.
• Treat negative or inconsistent feedback fairly: clarify, corroborate and give the candidate an opportunity to respond before deciding.
• Support your process with simple templates, solid workplace policies and a clear Employment Contract once you’re ready to hire.

If you’d like a consultation on designing compliant reference check questions or refreshing your recruitment policies, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.