Privacy issue on employment | Inquirer Business
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Privacy issue on employment

To further protect the integrity of the Philippine banking system, the Monetary Board (MB) recently ordered the Bangko Sentral ng Pilipinas Supervised Financial Institutions (BSFIs) to closely examine the credentials of their employees.

Dubbed the “Know Your Employee” rule, BSFIs are required to “adopt a risk-focused screening process, which considers sensitivities of certain positions that may require more stringent procedures.


“Adequate understanding of a candidate’s personal background and character, conflict of interest, as well as propensity to commit fraud or irregularity shall be considered in the recruitment process.”

Simply stated, those measures are aimed at ensuring that rogue bank employees are not placed in positions that would give them the opportunity to monkey around with depositors’ money.


Although local banks have, by and large, safeguarded the money entrusted to them by depositors, there were instan­ces in the past when key bank executives were caught sticking their dirty fingers in the banks’ coffers.

The vetting process for applicants for bank positions who just completed their college education is relatively easy.

A review of their curriculum vitae would quickly give the bank an insight into their academic qualifications and, based on their extracurricular activities, their ability to interact with other people.

If the bank wants to know more about an applicant’s character, it can talk to the acade­mic staff or people that he or she had interacted with.

When all the facts are in, the bank, with the assistance of an industrial psychologist, can decide whether the applicant is qualified for the job and has the moral fitness to handle other people’s money.

The situation, however, is different if the applicants are already employed or had prior employments.

Their employment records are usually embellished to make them look good so they have to be validated for accuracy.


Note that it is common practice in the business community that when an employee does something nasty that justifies his or her dismissal, employers would opt to make him or her resign rather than go through a formal disciplinary process.

The resignation saves the employer’s time and effort, and the expense of engaging the services of a lawyer in case the dismissal is contested at the labor department.

Besides, if the labor arbiter rules in favor of the employee, the employer may be ordered to pay a separation pay or put him or her back to work.

That resignation is what will appear in the employment record. What’s more, as part of the deal, all references relating to the incident that gave rise to the resignation are removed.

Going beyond the employment record or getting more information about the character of that applicant could be difficult.

With the strict enforcement of the Data Privacy Act of 2012, employers are averse to disclosing confidential information about their former employees without the latter’s written permission or unless ordered by a competent government authority; otherwise the employers may find themselves in serious legal trouble.

Rightly or wrongly, data privacy has become the convenient excuse in refusing requests for information about former employees.

Given this scenario, if, for example, an applicant for a bank position who earlier committed an act of dishonesty to a former employer was made to resign rather than dismissed, that moral deficiency would not appear in his or her employment record.

And in the event that person is given a position of responsibility in a bank, it would be like making a fox guard the chicken, or setting the stage for a bank fraud to happen when the opportunity presents itself.

Going back to the MB order, BSFIs have to go beyond the traditional vetting process for applications or appointments to sensitive bank positions to avoid “inside jobs” from happening.

Hopefully, BSFIs are able to satisfactorily comply with that order.

It would not be good for the banking industry’s image if the BSP has to expand its existing policy on requiring its confirmation on the election or appointment of BSFI directors and officers with the rank of senior vice president and above. INQ

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