Like many millennials, the Criminal Records (Clean Slate) Act 2004 (Act) remains widely misunderstood. It seems that people either grossly exaggerate its power and scope, or reduce its operation to a twink pen for drink driving convictions.

Misconceptions about the Act have made both reliance and compliance a fraught process. This article attempts to clear up some of the ambiguity around the Act and give some practical guidance on its effect in some common scenarios. In particular, we have focused on its interaction with commercial assignments such as a directorship or trusteeship from the perspective of both the hopeful applicant and the vetting agent.    

Overview

Dealing with the first (and perhaps most frequent) misconception, the Act does not expunge a person's criminal record. Rather, it grants a person the right to deny the existence of certain criminal offending (eligibility is defined in section 7).    

The way this operates in practice is an eligible person can answer "no" to a question regarding the existence of any criminal history or simply ignore screening criteria covering their criminal history. A standard criminal history check on that person from the Ministry of Justice will also return a clean record.    

Unless one of the exceptional circumstances at section 19(3) applies, an eligible person is entitled to exercise this right of non-disclosure against any person within New Zealand, despite any legislation, rules of law, contracts, agreements, instruments, or application forms (and so on), to the contrary.    

The effect of the Act is "all or nothing". This means that where an individual re-offends or does not otherwise qualify under the Act, the entirety of that person's criminal history will be unveiled. It will remain visible until such time as the person becomes eligible once again.    

Who is an eligible person? (section 7)    

An "eligible person" must have:

• had no convictions within the last seven years;
• never been sentenced to a custodial sentence (such as prison, prison commuted to home detention, corrective training, or borstal);
• never been convicted of a 'specified' sexual offence;¹
• fully paid any fine, compensation, reparation or costs ordered by the court in a criminal case;
• never been banned from driving until further notice (indefinite disqualification); and
• never been held in hospital by the court in a criminal case instead of being sentenced, due to their mental condition.

The above mechanism operates automatically. Where a criminal history check is requested and the person is eligible, the Ministry of Justice will release a clean record. The caveat to this entitlement are the exceptions contained in section 19(3) which are set out at the end of this article.²

How does the Act apply?    

Given the limited carve outs described in section 19(3), the question arises - what if the Act entitles an individual to conceal their criminal history, but the nature of the position for which they are applying still demands a candidate of "good character"? This situation might arise, for instance, where someone is applying to be a trustee of a charity or a director of a large well-respected company.    

Firstly, the clean slate scheme is subject to section 31(3) of the Vulnerable Children Act 2014. This means that people employed or engaged in work that involves regular or overnight contact with children cannot rely on the clean slate scheme for the purposes of that engagement and they must disclose all of their criminal history. The Vulnerable Children Act also has its own list of specified offences which trigger a presumption of disqualification for the person.    

For all other situations, section 21(2)(a) applies. This section holds that all "provisions" (defined as all legislation, rules of law, contracts, agreements, instruments, application forms, or documents) relating to an individual’s criminal record or an individual's character or fitness must be interpreted in a way that is consistent with the individual’s rights under the clean slate scheme.    

The broad application of this section means that those undertaking a vetting process cannot request that an individual disclose matters they would otherwise be entitled to withhold under the Act. Any provision or policy that purports to do so must be read down so as to align with that individual's entitlements under the Act. This section applies equally to questions in job application forms, representations of fitness recorded in employment agreements, or any other enactment.    

It is unsurprising that older documents often have screening criteria that are inconsistent with the Act. For example, a trust deed may purport to disqualify a trustee from appointment "if they have ever been convicted of an offence of dishonesty". Since the Act came into force in 2004, that provision must be read down to comply with section 7. The effective version would disqualify only those who have committed an offence of dishonesty and:  

• they were convicted within the last seven years; or
• they were sentenced to a custodial sentence; or
• they failed to pay the fine, compensation or costs ordered by the Court.  

An applicant trustee candidate who does not trigger one or more of the above conditions can safely ignore the disqualifying provision entirely or, if phrased as a question, answer in the negative.

The same approach applies to directorships. Although the Companies Act 1993 has established its own set of criteria for disqualification of directors based on criminal history (at section 151, and 382-383) , these rules are more narrow than the Act. For the most part, the Companies Act only disqualifies a person for five years from the moment of conviction for certain offences (or from judgment, as the case may be). There are longer disqualification periods available for more serious criminal offending, though these can only be made by Court order. In that case it is not the nature of a person's criminal offending that bars them from acting, instead it is the presence of the order.  

In this regard it is clear that there is no conflict between the Companies Act and the Act. If there was a conflict, the Act would prevail.    

What happens if you breach the Act? (section 18)    

Under section 18, if a person without lawful authority (meaning outside of the section 19(3) circumstances) requests that an eligible person disregard the effect of the clean slate scheme when answering a question about his or her criminal record, they commit an offence against the act. The penalty is a fine not exceeding $10,000.    

It is significant that section 18 can be breached simply by "requesting" someone's criminal history. There is no need for the question itself to demand full disclosure.    

Clearly, where an inquirer expressly refers to the Act and asks the eligible person to ignore its effect, they will have committed an offence. However, it remains to be seen whether the offence is triggered simply by asking about criminal history generally, where it would otherwise be concealed by the Act. For instance, a question simply asking if an individual has "any" criminal history.    

Notwithstanding the uncertainty around the above, legal commentators have suggested that inquirers should take a cautious approach. One safety measure to avoid breaching the Act is putting clear parameters around the question (or screening criteria) so as to avoid triggering a request for full disclosure by implication. For example:

Do you have any criminal convictions [not including any concealed under the Criminal Records (Clean Slate) Act 2004 eg convictions over seven years old not resulting in custodial sentence etc?] Refer to the Ministry of Justice website if you are unsure.    

If you are aware that your application form or empowering documents (such as a trust deed) contain disqualifying criteria or requests for criminal history that go beyond the Act, then an update is recommended.    

It is still not clear whether the Act puts any limits on the actions that an employer may take when it subsequently learns of the criminal history of an eligible employee. The Act does not expressly rule out acting on information regarding a person's criminal history. Rather, it seeks to restrict how that information is obtained in the first place. However, in an employment situation at least, given the Act has set down the circumstances where a person's criminal history ought to be relevant in section 19(3), some legal commentators observe that it would be difficult for an employer to prove that this information is now relevant to that person's ongoing employment to the point that dismissal is justified.³ In any event, acting on this information would not constitute a breach of the Act. If it does have application then it may give rise to claim for unjustifiable dismissal under the Employment Relations Act.

Takeaways

• Any inquiry into someone's criminal history (no matter how earnest the purpose behind it) must be interpreted through the lens of the Act.
• If one of the exceptions at section 19(3) (or the Vulnerable Children Act) applies then the inquirer can demand full disclosure of that person's full criminal history, notwithstanding their eligibility under section 7.
• For all other circumstances, the default position is that any questions or screening criteria which go further than the Act must be read down to comply with the Act (section 21(2)(a)). A standard criminal history check will also reveal a clean record for an eligible person.
• An eligible person is under no requirement to consent to a full criminal record check (currently activated by ticking a box in Step 3 of the current standard criminal history check form).
• Inquirers who:
  1. request a full criminal history check without fitting within one of the section 19(3) exceptions; or
  2. request that the candidate make a voluntarily disclosure of their criminal history which is wider than the Act; or
  3. insert screening criteria into their policies or application documents that is more expansive than the Act;

flirt with breaching section 18 and may be liable for a fine of up to $10,000.

• Employers that rely on an eligible employee's lawfully concealed but subsequently discovered criminal history to dismiss that employee do so at their peril and may invite a challenge for unjustifiable dismissal.

Exceptional circumstances (section 19(3))

The Act does not apply out of New Zealand or to employment/engagements covered by the Vulnerable Children Act 2014. As a result, foreign immigration services and border patrol are entitled to know a person's full criminal history irrespective of their eligibility under the Act. Similarly, agencies that employ or engage people in work that involves regular or overnight contact with children are entitled to "full disclosure" of that person's criminal history.

A person who would otherwise be eligible to deny any criminal offending will be required to disclose it if:

• the eligible individual's criminal record or information about their criminal records is necessary for:
  1. the exercise of the prevention, detection, investigation, or prosecution functions of a law enforcement agency or an overseas agency or body whose functions correspond to those of a law enforcement agency; or
  2. the administration of sentences or the management of remand inmates by a law enforcement agency; or
  3. the New Zealand Security Intelligence Service under section 11 of the Intelligence and Security Act 2017; or
• disclosure is relevant to any criminal or civil proceedings before a court or tribunal (including sentencing) or proceedings before the New Zealand Parole Board; or
• the person has made an application under the Arms Act 1983; or
• the person has made an application for employment:
  1. in a position that involves the national security of New Zealand; or
  2. as a Judge, Justice of the Peace, or Community Magistrate; or
  3. as a Police employee, prison officer, probation officer, or security officer; or
• the person has applied to act in a role predominantly involving the care and protection of, but not predominantly involving the delivery of education to, a child or young person (for example, a foster parent or a caregiver of children or young persons); or
• disclosure is relevant to an investigation under section 17 of the Oranga Tamariki Act 1989 of a report of ill-treatment or neglect of a child or young person; or
• disclosure is relevant to the undertaking of research approved by a controlling public office.

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[1] These are mainly sexual offences involving children.    

[2] Applicants will need to tick a certain box on the application form to override the automatic non-disclosure process. That tick-box will used when the exceptional circumstances at section 19(3) arise, or if the person concerned consents to it.    

[3] See, for example, Mazengarb's Employment Law (NZ) (online looseleaf ed) at [CRA18.5.5]; Noting that employers are constrained by the provisions of the Employment Relations Act when dealing with employees and the relevance of any historical criminal offending is likely to be viewed against the Clean Slate Act's employment exceptions. Other roles such as trusteeship are not similarly constrained, though removal of an eligible person based on historical contravention of criteria in the trust deed may encounter similar difficulties.