Your reference questions answered

Am I obliged to provide a reference for my employees or ex employees?

Generally speaking, there is no legal obligation to provide a reference for your employees or ex-employees. However, it is important that your policy with regard to providing references is consistent or it could lead to allegations of discrimination. You should also keep in mind that a refusal to provide a reference for an employee or ex employee who has made an allegation of discrimination or been involved in an allegation of unlawful discrimination could lead to a claim of victimisation.

You may also owe a contractual obligation to provide a reference, for example if it is agreed in to the employee’s contract of employment or more usually in a settlement agreement. An obligation to provide a reference may also be implied by custom and practice if it is your standard practice to provide a reference. Failure to provide a reference in any of these circumstances could lead to a claim for breach of contract.

This general rule is also tempered by the sector in which you work, for example, if you work in an FSA Regulated sector then you will be under a duty to provide a reference to the new employer and to report to the FSA any issues that could question the employee’s honesty, integrity and reputation, competence and capability, or financial soundness.


Do I owe any duties to the employee or ex employee who is the subject of the reference? Could I be held liable for giving a bad reference?

You must ensure that any reference you give is not discriminatory. For example, you must take care when commenting on performance, attendance or sickness absence where there is a risk that this could be construed as discriminatory on the grounds of disability.

If you make an untrue statement that disparages the reputation of a person in the estimation of right thinking members of society, this could amount to defamation. If the statement is made in a permanent form, (for example a written reference) then this would be libel and in a transitory form (for example in an oral reference) this would be slander. You may be able to defend such a claim on the basis of qualified privilege if you make the statement in accordance with a legal, social or moral duty or interest and the person in receipt of that statement has a corresponding duty or interest to receive it. Therefore to ensure that the statement is only made to the appropriate recipient you should always mark references as “Private and Confidential” and “for the addressee only”. You must also be able to show that you honestly believed that the information contained in the reference was true.

An employee may be able to claim for malicious falsehood if they can show that the reference was untrue and was made maliciously (i.e. that you knew it was untrue or were recklessly indifferent as to the truth).

The most common action brought against employers with regard to an inaccurate reference is that of negligent misstatement. In the case of Spring v Guardian Assurance [1994] it was established that employers who provide a reference owe a duty to the employee to take reasonable care in the preparation of the reference otherwise the employer will be liable if the employee suffers damage as a result of the reference. There have subsequently been many cases in this area, in McKie v Swindon College [2011] the High Court found that the former employer was liable for making careless and fallacious comments about a former employee in an email to the employee’s new employer which resulted in dismissal. The relationship was held to be sufficiently proximate even though the employee had left their former employer over six years previously and the damage was held to be foreseeable. Another case is that of Jackson v Liverpool City Council [2011] in which the Court of Appeal held that a former employer was not in breach of its duty of care to an employee when it made reference to allegations made against the former employee which they made clear they had not investigated. The employer was not found to be negligent as the reference was true, accurate and fair.


Can I be held liable to the new employer who sought the reference?

You owe a common law duty of care not to make a negligent misstatement to the recipient of the reference and if you knowingly include false information with the intention that the new employer rely on it then you will also be liable to the recipient for the tort of deceit.


Top 10 Reference Tips

  1. Have a clear policy on references and stick to it.
     
  2. Ensure that unauthorised staff members do not give personal references in relation to their colleague’s performance at work as you could be held liable for the same.
     
  3. Be mindful of your duties under the Data Protection Act. Do not provide a reference unless the subject consents to this and be particularly careful about sensitive personal data (for example, information relating to the subject’s health).
     
  4. If it is your policy to give a simple factual reference containing only details of the employee’s start and end dates and their job role, ensure that a statement is made that this is your policy so that you do not give a misleading impression by omission.
     
  5. There is no obligation to provide any detail in the reference or for it to be comprehensive but if you provide one that is more than a factual bare minimum ensure it gives a balanced overview of the employee and is true, accurate and fair. The employee should be aware of any complaints or performance concerns referred to.
     
  6. A Disclaimer may in some circumstances protect you against claims from the recipient of the reference but not usually from the subject unless you have their prior agreement to the reference and it is reasonable.
     
  7. Do not include details of spent convictions without the subject’s consent unless the job is covered by one of the exceptions to the Rehabilitation of Offenders Act 1974.
     
  8. Ensure the reference is consistent with the real reason for dismissal and any written reasons provided.
     
  9. Comments about the suitability of a new job should be given with care as they are more speculative and harder to justify.
     
  10. Ensure it is marked “Private and confidential for the addressee only”.
Andrew Dekany
Partner
London
020 7766 5629
Kerrie Hunt
Partner
Bristol
0117 930 9564
07816 270475
Jeremy Nixon
Partner
London
020 7766 5607