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The Dos and Don’ts of Employment References

Employers and employees alike will often ask for advice in relation to references after an employment relationship has ended. This is an issue we are often asked about and it is surprising how often some common misconceptions arise.

Firstly, clients often mistakenly believe that it is a legal requirement for an employer to provide a reference. Generally, there is no duty on an employer to provide a reference. Exceptions to this include where there is an express agreement, for example in an Employment Contract or a Settlement Agreement, or where there is a legislative duty to do so, for example in some regulated sectors (e.g. FCA).

However, outside of any express contractual or regulatory duty to do so, an employee cannot compel an employer to give a reference where it is not forthcoming.

In reality, however, most employers will give an employee a reference as they would expect other employers to reciprocate when they are hiring. Employers must therefore ask what information should they include and familiarise themselves with any potential pitfalls which may arise from issuing a reference for a former employee.

It has long been established that employers must exercise reasonable skill and care to prepare a reference which is “fair, truthful and accurate”. This duty is owed to the recipient of the reference as well as the worker about whom the reference is being written. Therefore, an employer providing an unfair, untruthful or inaccurate reference could open themselves up to potential claims from both the worker and the worker’s prospective employer for negligent misstatement.

This has led to a trend for many employers to provide a brief, factual reference which confirms dates of employment and the role the individual was engaged in. Whilst this is perfectly legal and sufficient, some employers choose to provide, and some regulated employers are required to provide, fuller and more detailed references. It is therefore crucial that employers understand extent of their duty to all parties.

Ensuring a reference is fair, truthful and accurate does not automatically mean that a reference has to be lengthy and comprehensive provided the writer has taken care to ensure that the reference is not misleading. It is important to note that a reference may be misleading either by reason of what is left out or by including facts which, although may be accurate, could create a misleading picture if not placed in context.

Employers should be particularly cautious where the former employee has been subject to some form of investigation or disciplinary proceedings. This came to light in the recent case of Hincks v Sense Network Ltd [2018] EWHC 533 {QB] where an individual, who had been subject to disciplinary proceedings, received a negative reference from their former employer. They then brought a claim of negligent misstatement arguing that the reference writer should have satisfied himself that the original disciplinary investigation had been procedurally fair before using its findings as the basis of the reference.

The Court disagreed and found that the standard of care to be exercised by a reasonable reference written should be expressed in broad terms. The Court went on to identify a list of common features of the duty:

  • the reference writer must conduct an objective and rigorous appraisal of facts and opinions, particularly negative opinions, whether those facts or opinions emerge from earlier investigations or otherwise;
     
  • the reference writer must also take reasonable care to be satisfied that the facts set out in the reference are accurate and true and that, where an opinion is expressed, there is a proper and legitimate basis for it;
     
  • where an opinion is derived from an earlier investigation, the reference writer must take reasonable care in considering and reviewing the underlying material so that s/he is able to understand the basis for the opinion and be satisfied that there is a proper and legitimate reason for it; and
     
  • the reference writer must take reasonable care to ensure that the reference is fair, in the sense that it is not misleading either by omission or by implication, nuance or innuendo.

The Judge noted that if there are obvious errors in the material available to the reference writer, or where he has information which casts doubt upon the reliability or integrity of the material, then he should check matters further before using this to form the basis of a reference. However, in the absence of any such “red flags”, there is no duty on the reference writer to examine the procedural fairness of any investigation involving the former employee.

Given the complex nature of the duty, it is understandable why some employers now opt for a matter of fact style of reference. However, for those who wish to give more detailed comments for whatever reason, the guidelines outlined above ought to be adhered to in order to prevent any repercussions arising from issuing a reference.

If you have any questions about giving or obtaining a reference, please get in touch with a member of our employment team.

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