In the clutches of long-term unemployment

19:29, Jun 02 2014

Right now there is a buzz emanating from the United States about discrimination on the basis of unemployment.

The long tail of the recession flowing from the global financial crisis continues to afflict millions of people who are out of work. Since December 2009, the unemployment rate of those considered to be "the long-term unemployed" (those that have been unemployed for at least 6 months) has been at an all-time high. There are currently 4 million people in the US in this category.

An unusual situation has arisen, however. Jobs are becoming available but the unemployed are not filling them. This is because employers are refusing to consider candidates who have been out of work for long periods of time. A recent study has shown that having experience for a given role but being out of the workforce for a long period, is more damaging to job prospects than being out of work for a short period but having no experience.

On its face this situation suggests a pervasive bias against people who have been unemployed for a lengthy period - there "must be something wrong with them". There would appear to be a drop dead point along the unemployment continuum, where unemployed becomes synonymous with unemployable.

This vicious circle is both a cultural and a legal problem. President Obama's State of the Nation Speech in January announced that major US firms had signed a pledge not to discriminate against the long-term unemployed. Many states are now debating and passing legislation to ban discrimination on the ground of unemployment. These legislative responses range from fully amending laws to provide for unemployment as a discriminatory ground, to simply banning discriminatory job advertisements, although the latter would seem to be little more than a sticking-plaster response.

In relation to actual discrimination, there is a fine line between having a real and legitimate need for current skills and knowledge, particularly in fast-paced industries such as IT, and decisions motivated purely by assumptions about people who are out of work. For software developers for example, 12 months in the wilderness might genuinely cause concern to a prospective employer wanting an employee who is up-to-date with the latest industry developments.


In New Zealand, discrimination on the basis of employment status has been unlawful under the Human Rights Act since it was enacted in 1993, along with other grounds such as disability, age, political opinion, family status, and sexual orientation.

The human rights and employment tribunals have not often considered this type of discrimination. This is because such discrimination is likely to be difficult to prove or may be bound up in discrimination under another prohibited ground, most likely disability or age.

In one recent case, 62-year-old job applicant Kevin Waters brought a claim in the Human Rights Review Tribunal against Alpine Energy for discrimination on the basis of both age and employment status. Waters unsuccessfully applied for an engineer's role in 2012, but he had worked for the same employer in similar engineering roles from 1975 to 2008, when he resigned. Alpine Energy denied that Waters' age or period of time away from employment were relevant factors in deciding not to appoint him.

Not buying this argument, Waters applied for, and successfully sought, disclosure of information about the other job applicants, including their CVs, qualifications, experience and their employment history. This decision is an important reminder that recruitment processes may be subject to close scrutiny where discrimination is raised as an issue. It will be interesting to follow this case and find out whether Alpine Energy's disclosed information does point to a discriminatory reason for not appointing Waters.

For employers, the simplest way to avoid claims of discrimination is to avoid any questions or comments about an employee's current employment status. Practically, this can be difficult given that most employers will of course be interested in an employee's current work situation, including why they left and what they have done since. Where it is clear from a candidate's CV that they have been in continual employment - more or less - this is unlikely to be an issue.

However, where there are gaps in an employee's CV employers should resist the temptation to ask questions and comment. The simple fact is that the employee was not working during the period in question - the why is not really relevant to their current skills and experience, and whether they are the right fit for the job.

Likewise, employers should be careful about the reasons they give for employment decisions. A rejection on the basis that "there are better candidates for the position" - while bland and potentially unhelpful - is always a safe option. Where an older employee like Waters is involved, especially one who is returning to the business and is known to it, this poses a particularly difficult situation.

Employers who seek to explain too much - "I was concerned about the fact that you have not been employed for over a year and therefore lack current, relevant, experience" - may find themselves with a discrimination claim.

Susan Hornsby-Geluk, Partner, Dundas Street Employment Lawyers,

The Dominion Post