Out-Law Guide | 10 Mar 2019 | 5:00 pm | 4 min. read
From time to time, organisations are asked to give references for current or former employees, or they request references from others to find out more about prospective employees.
When recruiting new employees, most employers will want to make a job offer expressly conditional upon receipt of satisfactory references. To avoid disputes, the employer must make it absolutely clear to the prospective employee in any offer letter that his employment is conditional upon receipt of a satisfactory reference. Ideally, the employer should also make it clear that it is for the employer alone to determine what is "satisfactory".
Generally speaking, employers are not under a duty to provide a reference for a current or former employee, so if they don't want to provide a reference they usually won't have to. However, employers should adopt a consistent reference policy to avoid discrimination claims or breaching the reciprocal duty of trust and confidence.
There are five exceptions where an employee may be abole to establish a legal right to a reference.
The first, which is uncommon, is where the employment contract has an express term stating that the employee is entitled to a reference. The second possibility arises where a term is implied in the contract, for example because the employer has traditionally given references in the past for employees of a similar level. The third is where a manager, or someone with authority, has assured the employee that a reference will be provided. The fourth is the fairly common situation where an employee leaving after an internal dispute gets a reference as part of a settlement agreement. Finally, there may be a regulatory requirement on the employer to provide a reference and this may require specific information.
Employers who give misleading or inaccurate references could find themselves facing claims from either the employee or from another organisation which has relied on the reference to its detriment. An employee may be entitled to see his or her reference as part of disclosure in an employment tribunal claim. An employee who has been the subject of an inaccurate reference can sue the employer for negligence or breach of contract. This is because the employer had a duty to take reasonable care in the preparation of a reference.
To succeed in such a claim the employee must be able to show that:
Employers should be particularly wary not to fall into the trap of giving "off the record" references, perhaps over the telephone. If the employee can prove that a reference was given (for example, by asking for the employer's phone records during the course of litigation) and contained misleading or inaccurate information, the employee might be able to bring a claim against the employer.
Similarly, a third party employer that relies upon a misleading or inaccurate reference to its detriment might be able to sue the party that gave the reference for the loss which it suffers as a result. Again, this is because the duty was on the person providing the reference to make sure it was fair and not misleading.
Employers should always bear in mind that it is possible that a departing employee for whom they are writing a reference might bring an Employment Tribunal claim. The contents of a reference should be consistent with the real reason for dismissal and any written reasons provided. For example, if the real reason the employee was dismissed or felt he had to leave was because of his poor performance, but the reference is favourable and does not mention poor performance, an employer may find it difficult to explain why it gave a good reference if it has to defend a constructive or unfair dismissal claim.
Employers should avoid contravening the Employment Relations Act 1999 (Blacklists) Regulations 2010 which prevent compiling lists of trade union members and activists in order to discriminate against workers on grounds of trade union membership or trade union activities.
Employers should have clear policies in place about who can provide references in what circumstances and what they can include.
If a reference is received that is unsatisfactory or causes concern, the employer can terminate the employment provided the job offer or employment contract allows for this. If not, notice to terminate the contract will have to be given and the employer will be liable to the individual for notice monies due under the contract of employment.