This is definitely something I saw prevalent in the hiring world: if it isn't outright illegal, use it to prevent someone from being hired. In many cases we had clients that'd tiptoe the line and ask if certain reasons would be valid for rejecting a person, and some HR managers were upset when they learned it was against the law to disallow someone who had admitted their criminal history from being hired. So they found another reason.

There is still a massive amount of hiring discrimination. It's just not the "official" reason anymore since that'd be illegal. That job was soulbreaking.

I'm not sure if you are in the US, but that's not true here. As a specific example: if the crime involved money and the position is with a financial institution. We have a big problem in the US where felons can't get jobs which can obviously lead to a lot of recidivism.

Source? As far as I know, it's legal, but you have to show a good reason to do so, and finely tailored policies, that aren't simply a broad "we don't hire anyone with a criminal record."

There are plenty of cases in which you may, or even may be required by law, not hire someone based on particular crimes on their criminal background check, such as sex offenders for jobs involving children or felonies for people who need to get a security clearance.

http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm

The main reason someone gets rejected from criminal reasons, in my experience, is having an old record that's been cleared or expunged, and then answering "No" when the employment application asks a specific wording of "Have you ever been convicted of a crime?" - The answer would be yes, and a criminal check would reflect something had happened, but that the record has been expunged due to enough time passing for that particular crime. It sounds convoluted, and it is. Not sure it really should, but I only worked in the industry. Whether or not the industry followed the letter of the law is much, much different.

I'm not saying that all HR departments should have such a policy (in fact, in some cases it can be illegal to request criminal background information, at least on the initial application form). But there are some cases in which a policy like that could be necessary and final.

Sure, but HR generally shouldn't be setting that policy, and whoever is setting that policy is logically making the decision, HR is gathering an input to that decision (a potentially decisive input, but that's because of decision criteria set outside of HR.)