As someone involved behind the scenes in the development of British Columbia's Freedom of Information and Protection of Privacy statute, I was conscious that the results of proclamation and the inevitable interpretation of law by implementing organisations sometimes caused unexpected consequences. I explored with risk management experts the impact of privacy legislation on bonding of staff for risk, insurance and security purposes.
The experience drawn from the effect of Canadian national legislation may indicate implications for other jurisdictions in the Pacific Rim and Asia, especially those sharing a foundation in the parliamentary system of government. Of course, every organization should seek its own legal counsel in any specific regard. That counsel should be considered in context.
In this case, we found that:
- The Bond process is typically used when staff of Company A handle monies and funds for Company B. If the staff of Company A should steal the funds, the bonding organization will pay Company B for that loss.
- The bond process, as described, is considered cost effective for bonding one's own staff against the risk of internal theft or loss.
- As a result of various privacy protections under law (variable across jurisdictions) it may be impossible for a bonding firm to perform a thorough security check. Therefore, these firms may bond individuals without an adequate knowledge of whether they are "bondable" in the sense of the general expectations understood prior to the advent of privacy laws.
- Contrary to management belief and instruction, it is not cost effective to bond individuals hired as temporary back-fill for staff on leave (or due to other staffing need) or to bond the outsourced service staff of other companies that handle one's own valuable goods as is increasingly common.
- If the security of bonding applied to temporary or sub-contractor staff is deemed necessary in relation to valuable itmes, cash or negotiable instruments, then such temporary staffing or back-filling may be pursued through a placement agency or sub-contractor which takes on responsibility for bonding. Then, it may be established through contract that the agency is required to supply bonded workers and that the agency is in any case liable for any losses. These losses would presumably be reimbursed through the agency's bonding agent, a separate matter of direct concern to the agency).
- Easily overlooked implications of such action include limitations of union and workforce agreements, judicial assessment of processes to monitor sub-contracted resources, the actual arrangements and financial coverage available to a sub-contractor through its bond agent, etc.
- What value can be ascribed to information?
