Employers are not obliged in law to provide references for employees or former employees (aside from in the financial services industry) but, if they do so, they are under a duty of care to the employer who is requesting the reference and the employee/ex-employee who is the subject of the reference.
Most employers take up one or two references when they recruit a new employee because factual information about that person’s recent past performance and experience is usually a good indicator of their likely performance in a similar role.
Some employers seek to sidestep any potential problems by not giving references at all or just providing basic information, like the employee/ex-employee’s job title and dates of employment. If that is the employer’s policy, then it has to be applied consistently and any reference given should clearly state the Company’s policy in order to avoid a future employer drawing a negative inference from the refusal to provide a detailed (or, indeed, any) reference.
Content of the reference
Great care needs to be taken when providing a reference. Nothing should be said about the employee’s performance or conduct that cannot be backed up by fact. Employers should also ensure that they include only information that is known to the employee.
Any reference given by an employer for a current or past employee must be true, fair, accurate and not misleading. If information is provided which is not fair or accurate then either the prospective employer or the subject of the reference can seek damages.
Employers should keep the information as factual as possible, covering such issues as:
- Dates of employment with the Company;
- Job title;
- Short job description and outline of the employee’s level of responsibility;
- If applicable, why the employee has left the Company e.g. redundancy, resignation etc.
If the subject of the reference has been dismissed, an employer can state this in the reference, provided that the employee is aware of the facts surrounding the termination of his/her employment and the facts are stated objectively and truthfully.
Requesting a reference involves processing personal data under the General Data Protection Regulation (GDPR). Employers must ensure that they have a legal basis for processing data and, in this context, the most likely basis is that the employee has consented to process the data. This is because the employee is likely to have a genuine choice about whether or not to consent to data processing for employment reference purposes.
Employers should comply with data protection requirements by ensuring that a reference request is genuine and that the employee/ex-employee wishes the reference to be provided.
In theory, an employer could be liable for damages if he/she does not tell the truth about an employee/ex-employee and the new employer subsequently suffers financial losses as a result of, for example, the individual’s misconduct.
Some employers seek to limit potential liability issues as a result of providing the reference by including a disclaimer at the end of the reference. This usually states that the reference is given in good faith and that the person giving the reference does not accept responsibility for any errors in the information given, or any loss or damage incurred. It should be noted, however, there is no guarantee that a disclaimer will be effective.
Who should write the reference?
Because of the duty of care issues stated above, it makes sense for a Company to specify that only named managers (and/or the HR team) can give references on behalf of the Company.
The risk of discrimination claims
It is possible for a former employee to bring a claim of unlawful discrimination when his or her ex-employer has refused to provide a reference, or provided a bad reference.
This could happen if, for example, the reason for refusing to give a reference or giving an adverse reference was that the ex-employee, while employed, had brought a claim for race discrimination against the employer. In those circumstances, this would be an act of victimisation and could be considered unlawful race discrimination.
Similarly, this could happen where an employer usually provides references but fails to do so for a particular employee/ex-employee for a reason related to a protected characteristic under the Equality Act 2010 e.g. age or disability. Here, again, the individual may have a claim against the employer for unlawful discrimination.