The former chairman of the Ulster Bank said he was worried a bill to place restrictions on ex-prisoners applying to be special advisers to Stormont ministers would be taken as a precedent to deny employment elsewhere, on 28 November 2012.
Sir George Quigley was giving evidence to the Finance Committee on the proposed Civil Service (Special Advisers) Bill.
TUV leader Jim Allister's private member's bill aims to ban those convicted of an offence carrying a sentence of five years, or more, from holding the post of special adviser.
"If everybody with a conviction of five years or more was going to be automatically denied employment elsewhere outside the special adviser range in Northern Ireland, that would concern me very considerably and the message that would send out," Sir George said.
"Is it sensible to deny these people the opportunity to contribute, and is it reasonable for society to expect them to espouse peaceful democratic means to shape the future, but at the same time refuse them any place in that future?"
He, along with former head of the Northern Ireland Civil Service head, Sir Nigel Hamilton, explained that they had been asked to co-chair a working group to examine the problems facing ex-prisoners and their reintegration back into society.
Sir Nigel said the party was made up of representatives from ex-prisoners and all paramilitary groups, trade unions, the Confederation of British Industry and government departments.
The DUP's Peter Weir raised concerns that there were no victims' representatives within the group.
Sir Nigel also explained that an offence could be expunged from a record, but a similar offence committed in a conflict-related context would remain.
He said the working group was set up to produce guidelines so that both were treated in the same way.
"I was surprised at the range of issues and blockages there were to reintegration," he said.
Sir George said the group had recommended that those convicted of a conflict-related offence should be able to compete with other applicants for employment on a totally level basis and the employer's decision should be made solely on the basis of an applicant's skills and experience.
He added that only after an applicant had been recommended for a position, and only where relevant to a specific position, should a record check be taken.
He said that the conviction would have to "materially relevant" to the position and the onus would then be on the employer on whether or not to deny the person the position.
Committee members also heard evidence from groups representing ex-Republican prisoners.
"We see this bill as another piece of discrimination which seeks to pick out and demonise ex-prisoners," Thomas Quigley from Tar Isteach said.
The committee agreed to write to groups representing loyalist ex-prisoners to invite them to give evidence.