An employer’s duty when giving a reference is to be fair, truthful, and accurate. Therefore, the reference must reflect the individual in question and be realistic, not too glowing if this is unjustified, and not too negative is this would leave a misleading impression.
References are a tough legal area for employers as getting it wrong can lead to liability for negligence, discrimination, defamation, or data protection breaches. Due to this, many employers give basic and factual references as this can limit the risk of a claim being brought against them by the former employee.
Are employers obliged to provide a reference?
In general, the answer is no. However, some circumstances would create a certain obligation such as if not giving one would amount to discrimination, or they can be contractually obliged for example as part of a settlement agreement.
Some sectors have regulatory rules which require and govern the writing of references. These include financial services and education.
We recommend that an employer has a policy in place regarding references, how they are written and who has the authority to write them. The policy should be covered in the staff handbook so that employees are aware and understand the process too. By putting this in place, there will be a consistency to approaching references and both employers and employees will know what to expect.
Employers should not give one employee a full reference and another just a basic one as this leaves them open to discrimination claims.
Are employees allowed to just provide a basic reference only?
A basic reference can contain as little as job title and dates of service. Whilst employers do this to mitigate the chances of legal action, they aren’t very helpful for new potential employers as they don’t talk about the individual’s skills and personal qualities.
However, employers are well within their rights to do this, so long as they provide the same type of reference to all employees who request one.
If an employee is leaving under the terms of a settlement agreement, then a full reference could be included in the terms of the agreement.
New employer is claiming negligence over reference
New employers can claim for financial loss caused to them if a reference has not been fair, truthful, and accurate. The reference does not have to be fully comprehensive and include every detail, but it should give an overall impression of an individual without being misleading.
As a result of this, we suggest including a disclaimer in the reference that protects employers from any potential negligence claims.
Can an employer give a “bad” reference?
The answer to this question is dependent on your definition of “bad”. A reference may include what are perceived as negative statements about a person or their abilities, but the question is whether they are true and can be justified.
Speculation and conjecture should not be included. However, employers can lawfully express negative opinions providing they have underlying material to justify them.
When providing a reference employers must follow the law on discrimination, for instance it is important that any criticisms about performance or attendance are not formed from a disability.
It’s recommended that employers stick to the facts that they know they can prove if questioned. Sometimes, a new employer will ask whether the previous employer believes the individual is suitable for a certain role, which is considered an inappropriate question as the old employer is being asked or an opinion on something they don’t know anything about.
It all comes back to whether a “bad” reference is:
- Fair (in the circumstances)
- Truthful (does it contain anything obviously wrong or misleading?)
- Accurate (has something been left out which may alter the perspective if it was included?)
What can employees do if they get a negative reference?
If an ex-employee believes that their former employer has discriminated against them in a reference, then they are able to make a claim in the Employment Tribunal. Please note, there are strict time limits for bringing a claim in the Employment Tribunal. In general, you have three months minus a day from the date the discrimination happened.
If the reference is misleading or inaccurate and led to the ex-employee suffering a loss, then an ex-employee may be able to make a claim in the county court. If the reference contains a disparaging statement and has no justification or evidence, there may be a basis for the employee to bring a defamation claim.
For more information or if you have any questions, please contact our Employment Solicitor, Katie Bowen Nicholas.