When writing references for current or former employees, employers are often faced with a number of concerns. How honest should I be? How much detail should I include? If I give a reference which is too positive, will this reflect badly on us and could we be liable? And at the same time, am I limiting the leaver’s job prospects by being lukewarm? This article reminds employers of their legal rights and duties, and provides some practical do’s and don’ts when providing references.
Legal rights and duties
Unless an employer is specifically obliged to give a reference under regulatory rules or has agreed to provide one, you may refuse to do so. That said, most employers do provide references as it is good practice, helps maintain an amicable relationship with the employee and refusing could be alleged to be discriminatory.
If a reference is given, the employer owes two duties:
1. Reasonable care must be taken to ensure that the information in the reference about the person, their role and performance is true, accurate and fair – this is a duty owed to both the employee and their potential employer.
A reference should therefore not be misleading, inaccurate or discriminatory. Overly negative or positive references are inaccurate and could be found to be negligent if a prospective employer relies on them when deciding whether to offer a job.
If an employee believes a reference is inaccurate, negligent or deliberately misleading, they have a right to sue their employer for damages, such as for any losses from a job offer being withdrawn. A future employer can also claim damages, like wasted recruitment costs, against you if they can demonstrate they wouldn’t have hired the former employee but for your misleadingly positive reference.
Given these risks, many employers opt to provide brief factual references. Such references simply set out the employee’s dates of employment and job title. However, as factual references don’t provide future employers with much of a sense of the employee’s ability, performance or personality, a future employer may contact the employee’s line manager for further details about the employee. Employers should be wary that any additional verbal information they give will still be subject to the reasonable care duty.
2. Duty not to make defamatory statements – this is a duty owed to the employee.
A reference should not make an "untrue statement that disparages the reputation of a person in the estimation of right-thinking members of society".
If an employer makes a defamatory statement in a reference, the employee could potentially sue the employer for libel under defamation law. However, employers cannot successfully be sued for a statement in a reference provided they believed it was correct, the reference was given without malice and it was marked “Private and Confidential” and “for the addressee only”.
Do’s and don’ts
We have set out below a brief reminder of the do’s and don’ts when providing a reference:
- Create a policy for how to deal with references, given an employer will be legally responsible for any references provided by staff on its behalf. This should set out who can give a reference and what sort of information it should include (ie detailed or factual).
- Carefully consider making it your policy to only give factual references and state in the reference that this is your policy. This ensures that your approach is consistent and allegations about inaccurate, negligent or deliberately misleading references are avoided.
- Mark the reference “Private and Confidential” and “for the addressee only”.
- Include a disclaimer of liability in respect of negligent misstatement, errors and omissions.
- Ensure that the employee is aware of any complaints or performance concerns which are referred to in the reference.
- Bear in mind that the employee may see the reference. Provided it is clear the reference was intended to be given in confidence, an exemption under the Data Protection Act 2018 will be available both to you (in giving the reference) and the new employer who receives it, in the event that the employee makes a subject access request under UK GDPR. However, whether the new employer decides to apply the exemption may be out of your hands. Moreover, if the employee brings a claim to which the reference is relevant, the court will order that it is disclosed.
- Depart from your policy to provide a factual reference if the reference is part of a settlement agreement, as this might leave you open to allegations of inconsistency or even discrimination. It is generally better to stick to the policy regarding what information a reference should contain and who should provide it, even in the context of a settlement agreement.
- Include inaccurate statements in the reference. For example, if an employee:
- Did not meet the standards expected, the reference should say so if their performance is raised. (Please note, a factual reference would not need to include this information).
- Was fired, and this information is given in the reference, it should state the reason and not invent another in order to improve the employee’s job prospects. (Again, a factual reference would not need to include this information).
- Was the subject of an investigation where the allegations against them were not upheld, the reference should not refer to the investigation as this would be misleading (N.B. schools and colleges should refer to guidance in Keeping Children Safe in Education in relation to how to deal with safeguarding allegations in references).
- Include irrelevant information. For example:
- Subjective opinions, for example the employee’s suitability for a new job. Remember that where you give an opinion, evidence should be provided to support it and a balanced overview of the employee should be presented.
- Irrelevant personal information, like mentioning an employee’s race, sex, age or other protected characteristics, because this is potentially discriminatory. However, where a protected characteristic is crucial to doing a job, an employer can mention the characteristic, for example stating that a priest is Christian.
- Information about an employee’s poor performance, if your policy is to give factual references only. The employee will wonder why you’ve been inconsistent with the policy and may potentially bring a discrimination or victimisation claim or claim a breach of the implied term of trust and confidence.
- Refuse to give a reference or give an unfavourable one in response to an employee doing a ‘protected act’ under the Equality Act, such as bringing a discrimination claim. That may amount to victimisation.
If you require further information about anything covered in this blog, please contact Alice Cave or your usual contact at the firm on +44 (0)20 3375 7000.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, September 2021