References

Is there an obligation to give a reference?

Prior to making an offer of employment many employers will seek to obtain satisfactory references from previous employers of the prospective candidate.  Others will make any offer expressly conditional upon the receipt of satisfactory references.   As the "job for life" is now a rarity, the importance of a reference to a departing employee cannot be underestimated. 

Generally speaking there is no legal duty on an employer to give a reference although in certain regulated industries (e.g. financial services) employers may be obliged to provide references under the regulations of the particular governing body.      Rarely, there might be an express contractual obligation to provide a reference or, more commonly, this obligation may arise by implication as a consequence of the employer's usual practice of providing references.    A failure to supply a reference in such circumstances will be a breach of contract for which the employer would be liable to the ex-employee in damages.         Failing to provide a reference may also amount to victimization and result in a claim for sex, race, disability, sexual orientation, religion or belief discrimination if any employer refuses to provide a reference in circumstances where an employee has previously asserted rights under the discrimination legislation.  

When providing a reference employers have a duty of care  to the prospective new employer and also owe duties to the individual former employee.

Duties owed to the prospective new employer

An employer obliged to, or who agrees to, provide a reference for a current or former employee owes a legal duty to the new employer to make sure the reference is true, accurate and fair and does not give a misleading impression.  Failing to mention, therefore, that an individual employee was incompetent or dishonest may mean that the new employer is potentially able to sue the former employer for any loss suffered as a result of relying upon that reference.  

Duties owed to the employee

An employer owes a duty to its former employee to take reasonable care in the preparation of any reference and must not be unduly selective about the information provided if that information is likely to give an overall misleading picture.    A former employee may be entitled to sue for damages if he or she suffers financial loss as a result of a misleading or inaccurate reference.

Recent case-law on references

Coote v Granada Hospitality Limited (2) 1999

- Mrs Coote was dismissed by Granada in 1993 and pursued a sex discrimination claim.    Granada agreed a settlement of that claim with her.     Later, Mrs Coote applied to Granada for a reference which was refused.    She alleged that not providing the reference was an act of victimization under the Sex Discrimination Act and that the refusal was as a result of her previous claim.      The European Court of Justice held that victimization could exist even though by this time Mrs Coote no longer worked for Granada and that withholding the reference did amount to an act of victimization.   

Khan v Chief Constable of West Yorkshire Police 2000

- When Mr Khan applied for promotion to Inspector and was rejected he submitted a claim for race discrimination.  Before the claim was determined he applied for a position as Inspector with another Force who applied for a reference to West Yorkshire Police.  The reference application was refused on the basis that it might prejudice the ongoing race discrimination claim. Mr Khan complained of victimization.     The Court of Appeal decided that Mr Khan had been victimized and that the race discrimination claim was the reason he had not been provided with a reference.     

TSB Bank Plc v Harris 2000

-  The Employment Appeals Tribunal held that the Bank acted in breach of its implied duty of trust and confidence to Mrs Harris by revealing complaints against her (of which she was unaware) in a reference to a prospective employer and upheld her claim of constructive unfair dismissal.      The EAT held that for the reference to have been fair and reasonable Mrs Harris should have had the opportunity to answer all the complaints against her mentioned in the reference.

Cox v Sun Alliance 2001

- A reference was provided by Sun Alliance for Mr Cox which suggested he had resigned following allegations of dishonesty and had been untruthful.    As a consequence, Mr Cox had his offer of new employment withdrawn and suffered a nervous breakdown.     The Court of Appeal decided that the allegations of dishonesty against him had never been properly investigated or proven and that the reference was misleading.    Mr Cox was awarded a substantial sum in damages.

Rhys-Harper v Relaxion Group Plc 2003

- The House of Lords decided that protection against discrimination (on grounds of sex, race or disability) does not end at the time employment finishes.    Discrimination legislation makes it unlawful for an employer to discriminate against a former employee on the grounds of sex, race, disability, sexual orientation, religion or belief by subjecting the former employee to a detriment closely connected with a relationship between the former employee and employer which has come to an end.

Practical points on giving references

• Ensure a clear policy exists as to who can and cannot provide references within the organizations.   
• Avoid oral references and, if given, ensure detailed notes are kept.
• Ensure a clear policy exists as to the content of references and whether they are simply to provide basic information about the employee such as length of service and position held or whether they will also provide an assessment of wider work issues including capability, attendance and the like.   
• Ensure that all facts given in a reference are accurate, fair and do not give a misleading impression of the employee.
• Avoid completing questionnaires from prospective employers and give a reference on your own terms.    
• Ensure consistency of treatment of all employees in relation to references.   
• Avoid subjective comments about employees which cannot be substantiated.
• Do not refer to allegations of misconduct or poor performance which have not been fully investigated and before mentioning disciplinary proceedings ensure that you genuinely believe the information being given is true, that reasonable grounds exist for that belief and that the matter has been fully investigated.
• Mark a Reference "Private and Confidential : for Attention of Addressee Only".
• This should provide protection from a libel claim provided there is a genuine belief that the content of the reference is true and that the information in the reference has not been given maliciously.
• Include a statement in the reference that it may not be disclosed to any third party without your written consent.
• Although the effectiveness of disclaimers is questionable consider inserting one to the effect that no liability is accepted for errors or omissions in the content of the reference.        This is particularly important if you are asked to express an opinion about the employee in response to a specific question from the prospective employer.

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