Negligent Hiring: The Expensive Reason to Avoid Bad Hires

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Many businesses are no strangers to bad hires. These are the job applicants that are accepted only for the company to find out that this person is not a good fit for the company. This results in wasted resources as well as a negative effect on the workplace culture, team morale, and productivity. This also means having to repeat the recruitment process to find someone else to take on the job role.

For the most part, bad hires end up becoming a nuisance for the company. Thanks to these new employees, the company will have to spend more time and money on resources in training, recruitment, and other tangible and non-tangible resources. The best-case scenario is that bad hires have a minimal negative effect on your business.

But the worst case scenario: your company can be legally liable for negligent hiring, which could be a much larger blow against your business.

Here’s what you need to know about negligent hiring and why you should avoid bad hires as much as possible.

What Is Negligent Hiring?

Negligent hiring is a legal claim made by either an employee or a customer against a company and its erring employee who has a history of repeating incidents or a high risk of bringing harm to the employee or customer.

Let’s say that you are the owner of Business A and have hired Mr. X, who starts a physical fight with his supervisor, Mr. Y. Mr. Y’s arm is broken in the process and later files for negligent hiring as a thorough background check would have shown that Mr. X has a history of arrests due to assault.

In this case, a background check would have proven what a liability Mr. X would have been in your office. Because you did not perform due diligence researching Mr. X’s background, your business is liable for negligent hiring and putting your employees in danger.

This makes it a company’s duty to ensure that the people they hire do not have a history or background that suggests their employee may be a liability against the company. Although there is nothing illegal about hiring someone with a history that is less than perfect, should they repeat their actions it is on your company should they affect your employees and customers.

For more information and inquiries about pre-employment tests, don’t hesitate to contact Aptitude today.

Negligent Hiring in the Philippines

Employees and customers are protected against negligent hiring through Article 2176 of the New Civil Code of the Philippines. Under this article, whenever a person harms another due to fault or negligence, even if there is no relation between the parties this is called a quasi-delict that the former is liable of.

Protection against negligent hiring comes from Article 2180, which states that not only is the person who committed the quasi-delict liable, but also those that are responsible for this person, i.e. their employer. Employers are responsible for the damages caused by their employees when the employee was doing something related to the company.


Protection for Customers

Negligent hiring applies to both customers and employees.

In a real-life example explained by Attorney Persida Acosta, a woman died after her car collided with a bus that was speeding at 70 kilometers per hour. The deceased woman’s husband is seeking compensation from the owner of the bus company, but the owner demands he accept a smaller settlement. The owner claims that they have exercised due diligence in hiring their employee and have a policy regarding hiring professional drivers, so the case will be dismissed should the husband decide to take the claim to court.

According to Acosta, having a hiring policy and selection is not enough to absolve the company from its liability. They would also need to prove its diligence during the selection and how it supervises the work of its employees. Because the driver’s negligence killed a person while operating on behalf of the company, both the driver and the employer are liable, so this case could hold water in court.

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Avoiding Bad Hires

So if your employee ever did something to warrant a case of negligent hiring or a liability, the company will be liable for the actions of their employee. This means that if you get a particularly bad hire that is unequipped or unsuitable for a job, you are legally liable should anything happen to your employees or your customers.

This is one of the reasons why companies try to avoid bad hires that could become an even bigger liability. This includes involving practices like:

  • Double-checking the CV and resume – It may seem redundant, but asking your applicant questions that can be answered through reading the CV is a good way of detecting if an applicant is lying. Philippine PI found that around 40 percent of resumes contain false information, so it helps to be thorough and weed out fabricated CVs from a well-crafted CV.
  • Ask what the applicant knows about the company – An applicant interested in working for the company would have done their research about the company’s services, business growth, and culture. An applicant that barely knows anything (or worse, nothing at all) about what the company they’re applying for does, it’s a red flag that your applicant may simply be trying to find any job they can take.
  • See what the applicant asks. During the question portion, observe what the main theme of their questions are. Detailed questions about their job and responsibilities, career growth, and future opportunities are a green flag, but questions limited to what they gain suggests that they are only concerned about what they earn from your company.
  • Add an Integrity Test to Your Hiring Process Pre-employment integrity tests are not just limited to background checks. These tests determine non-criminal but still undesirable traits in employees like poor attendance, low productivity, and inability to work in a team. This can also determine positive factors like trustworthiness, honesty, and productivity in an employee.

Bad hires can lead to expensive negligent hiring cases, so it’s best to avoid bad hires at all costs. Not only do you have to be able to trust your employees with doing their daily tasks, but you must also trust them not to harm anyone else. Because even if your business had nothing to do with your bad hire’s accident against a fellow employee or customer, their actions can affect your business, your expenses, and your overall reputation.

I’m In! What Do I Do Next?

Reach out to Aptitude for a free trial of our online recruitment tests today and take advantage of our introductory promo. You’ll get a full overview of our recruitment tests as well as a sample report.