Employment reference requests from prospective employers are almost universal. Generally an employer makes an offer of employment conditional upon a ‘satisfactory’ reference from at least one person, preferably the employee’s former employer.
References can be of two types: a personal reference (provided by an individual in their personal capacity) or a corporate reference (a reference provided by the former employer). Usually, the primary or only reference is required to be from the former employer.
The giver of the reference is legally responsible for the contents.
This guide focuses on corporate references.
Is it obligatory for employers to provide an employment reference?
No, there is no legal obligation to provide a reference. There are limited exceptions to this rule, the most common being those employed in the financial services sector. Or, rarely, where there is a contractual obligation to provide a reference (eg after a settlement agreement).
In addition, an employer who refuses to provide a reference when the employee has made allegations of discrimination risks a claim of victimisation, which can cost thousands in an injury to feelings award.
What should an employers’ reference contain?
Where a reference is given employers have a duty to ensure that any reference contains only information that is true, accurate and fair, and does not give a misleading impression.
They should therefore refrain from asserting any statements/opinions that cannot be backed up by facts. Often it can be difficult to separate ‘perception’ from facts, and so the safest thing is for employers to give what’s called a data statement or factual reference (which includes basic information such as the employee’s job title, start date and end date.
Whilst employers must ensure all information is true, accurate and fair, the actual information that is disclosed is up to the employer. Employers may choose to disclose different types of information dependent upon the sector. For example, in the healthcare and education sectors, employers might comment on the employee’s behaviour towards pupils or residents. Often, the prospective employer asks for this and the former employer declines to do so.
The disclosure of criminal convictions is a tricky subject because of the potential data protection implications, especially in light of the GDPR and other privacy laws. The best course of action is to let the prospective employer do their own DBS and other checks of their own.
Can an employer provide a bad reference?
Employees often think the answer is no, but in fact there is nothing stopping an employer giving a negative reference, as long as it is true, accurate and fair.
What are the consequences of giving a misleading reference?
Giving a misleading reference can lead to one or more of the following claims:
- Defamation – this is where an employer deliberately provides a reference that contains an untrue statement, that damages the reputation of the employee.
- Malicious falsehood – where an employer provides a reference that contains falsehoods, and they can be shown to have been made maliciously by the employer (i.e. the employer knew the statements were false or reckless as to the truth).
- Negligent misstatement – this is where an employer can be sued for an inaccurate reference. This could lead to compensation for lost salary from the new job that was lost.
- Breach of contract (rarely, and the consequences are the same as number 3. above).
Tips for employers
Employers should be mindful of discrimination when providing an employment reference e.g. an employer should be careful when commenting on performance or sickness absence in relation to a disabled individual).
A reference should contain a statement that it is given in good faith and that no liability is accepted for accidental inaccuracies.
It is always a good idea for employers to have a policy governing when references are given. This can also help avoid allegations of discrimination and gives clarity on the contents of any references.
Tips for employees
Employees who are concerned about what kind of reference they might be given on departing where there has been a dispute (eg about performance or misconduct) could try:
- Negotiating an agreed reference. This is an agreement on a form of wording, with a promise not to depart from it ‘orally or otherwise’ (in case the prospective employer picks up the phone and tries to weasel more information out of them).
- Getting a friend who is in HR or who owns a business to make a reference request so that you don’t find out that a bad reference is being given at a time when that job you really want is riding on it.
An employee who finds themselves in this position might find it advantageous to raise a grievance before leaving, setting out the dispute in the resignation letter and taking legal advice as soon as possible.
Acas have recently produced a guidance in relation to references, which can be found here.
By Zahid Reza