Consequences for an Employee of Providing Fraudulent Recruitment Information.

An employer who provides a reference for an employee is obliged to provide one that is true, fair and accurate.  If an employer steps outside permissible boundaries they can be sued by the employee, if the reference causes them loss.  Employees will frequently polish their CV but what are the bounds of what an employee can say and what are the potential consequences if an employee does embellish their CV to given themselves an unwarranted qualification or work history?

An employer’s most frequent reaction, where they have been misled into appointing the individual will be to dismiss an employee who has lied about their previous career history.  However, in R v Andrewes the Supreme Court was required to consider whether it was appropriate to make a confiscation order under the Proceeds of Crime Act 2002 against a former employer who had committed CV fraud.

Mr Andrewes applied for and was appointed to the position of Chief Executive at St Margaret’s Hospice in Taunton.  The original job advertisement indicated that a degree was essential and an MBA desirable.  It was also indicated that 10 years of management experience with three years in a senior position was essential.  Mr Andrewes’ CV indicated that he had a BA from Bristol and an MBA from Edinburgh and was studying for a PhD in Ethics and Management.  He also claimed to have occupied several senior positions either as Chief Executive or Managing Director level.  Sadly the reality was very different and he had not occupied any of the positions he claimed.  During the course of his employment he was appointed a non-executive director of Torbay NHS Trust.  Prior to his appointment Mr Andrewes highest paid role was around £55,000.

Despite this he was offered the role of Chief Executive in 2004 of the Hospice, at a salary of £75,000, a position he held until 2015 when he was dismissed.  It was clear that but for his experience he would not have been offered the role.  Despite his lack of experience he received positive annual reviews and there were no concerns about his performance in role until the truth began to emerge, when his employment was terminated.

He was prosecuted under the Theft Act and Fraud Act and pleaded guilty.  In sentencing the Crown Court judge noted that it was only on account of his lies that he had secured the position.  A Confiscation Hearing took place where it was agreed that the benefit he had derived from his lies was almost £650,000 but that only £96,000 was available and an order was made for that amount.

In the Supreme Court the argument was about the correct amount of the award - should it be for the whole sum or just that amount which was practically recoverable?  The Supreme Court rejected the argument that it would be right to order repayment of all the sums earned because Mr Andrewes had performed the services.  If that were the approach taken by the Court it would effectively constitute double disgorgement.  Equally it rejected the argument that no repayment should be made, whilst Mr Andrewes had performed a valuable service, it had been provided whilst those for whom he worked were under a misapprehension as to his qualifications.  If no confiscation order were made Mr Andrewes would be profiting from his own wrongdoing.

The correct approach is to assess what the difference is between the higher earnings that have been paid and the lower earnings he would have obtained if the fraud had not been committed.  It was submitted that this could best be achieved by looking at the fraudsters earnings in his previous role (£55,000) and that paid in the current role £75,000.  There was a 38% difference in pay, which would amount to a gain of £244,000.  However applying the test of proportionality the Supreme Court concluded that it was proportionate in this case to make a confiscation order in the sum of £96,000.

 

The case is important for employers who are faced with having appointed an employee to a role that they would not otherwise have done, had the employee not fraudulently misrepresented their education qualifications and /or career history.  It provides clear guidance on how much may be confiscated from an employee who has carried out the fraud.