Receiving a reference request from an employee leaving to join a new company can sometimes be challenging, especially where there have been conduct or performance-related issues. It is hard for employers to know how honest to be. Similarly, you may be wary of giving a too positive a reference lest it reflects badly on you or leaves you open to liabilities.
This month we outline an employer’s legal duties and obligations in respect of providing references and offer some practical suggestions as to how to manage any risks associated with giving employment information.
Am I Obliged to Provide a Reference?
As a general rule, there is no legal obligation to provide a reference.
That said, it is still good practice to provide some sort of reference and many employers will do so to maintain an amicable relationship with the employee.
There may also be circumstances in which you will have to provide a reference; for example, the written employment contract says that you will or when it is your usual practice to give references for staff. You may also have to provide one for regulatory reasons where an employee works in the financial services sector.
What Risks Do I Need to Be Aware of?
If you decide to provide a reference, you need to be mindful that you owe both your employee and their potential employer a duty to take reasonable care to ensure that the information offered is accurate and fair. It should also not give a misleading impression or be inaccurate or discriminatory.
You should limit information to your specific knowledge of the employee and avoid speculating on their suitability for a new role. If the reference is excessively negative or positive, it is likely to be inaccurate and could be found to be negligent if a prospective employer puts faith in it when determining whether to offer a job.
Failure to provide an accurate and fair reference could result in the employee challenging it and suing you for damages, such as for any losses from a job offer being withdrawn. Similarly, a potential employer could also claim damages, such as wasted recruitment costs, against you if they can show that they wouldn’t have taken on the former employee but for your misleadingly positive reference.
You should also avoid making any defamatory statements about your employee that disparage their reputation – otherwise, you risk a claim for libel or malicious falsehood, being brought against you.
If you opt not to give a reference, you must ensure that any refusal is not discriminatory. Furthermore, in providing a reference, you should also be careful to avoid any discrimination. For example, be mindful of making comments about your employee’s performance, attendance or sickness absence where there is a risk that these may give rise to disability discrimination.
You should also ensure that you comply with your obligations under the UK’s data protection legislation as providing a reference will usually involve processing personal data. This is particularly so when giving special category data, such as information on sickness-related absences. As a result, you should avoid giving confidential references about your employees unless they consent.
What Can I Do to Reduce The Risks Associated with Giving a Reference?
Given the many risks involved, several employers now only provide basic factual references that just set out the date of employment, their employee’s job title and salary with no detail as to the employee’s job performance. In addition, it is sensible to include disclaimers of liability to cover negligent misstatements, errors and omissions.
You should also have an internal set of guidelines on how to deal with references. This is helpful for consistency and should set out;
- who within the organisation can provide a reference and in what circumstances,
- whether only factual references with dates of employment and job roles should be given or whether more detailed information about an employee’s character, strengths and weaknesses and periods of absence can be provided.
Dos and Don’ts of Providing References
Providing references can be a legal minefield for employers and can result in costly legal claims if they are not handled correctly. We have set out a reference checklist below for you to follow to help you stay compliant with employment law requirements and minimise the risks involved.
Do
- make sure you are consistent in the treatment of employees when providing a reference. Providing a reference to one employee but not another could result in an unlawful discrimination claim.
- if you are only providing factual information with dates and job titles, do explain to the potential employer that it is your policy to provide references only in this format
- include a disclaimer of liability to cover negligent misstatements, errors and omissions
- if you provide a more detailed reference, be sure that the employee is aware of any complaints or performance concerns that you are referring to in the reference
- ensure that any information provided about absence complies with your data protection obligations under the UK data protection legislation
Don’t
- include any inaccurate or misleading information in the reference
- include subjective or irrelevant information or information on performance issues where only a factual reference is being given
- don’t include details about absences related to parental leave or any disability
- don’t provide specifics about any poor performance, or any disciplinary measures or dismissal unless you can back this up with clear supporting documentary evidence
If you have any issues relating to reference requests or would like help putting together a reference policy for your workplace, contact our experienced employment law team on 0330 173 3980 or email us.
