Business Advice / Business Spotlights
References – what are the obligations of an employer to provide a reference and what are the risks if a reference is given?
Providing a reference for an employee who is leaving to start a new role can sometimes be difficult, particularly where there have been issues with their conduct or performance. Does an employer have a legal obligation to provide a reference? How should an employer deal with a reference request? In this article, Jo Cullen from Edwards Durthie Shamash Solicitors looks at the obligations of an employer to provide a reference, what it should contain, how risks can be managed and the key “do’s” and “don’ts” in providing employment information.
As an employer, do I have to provide a reference?
There are some circumstances where you will have to provide a reference, for example for regulatory reasons (for an employee working in the financial services sector) or there may be a contractual obligation. But generally, there is no legal obligation to provide a reference. In most cases, however, an employer will provide a reference as it is good practice to do so.
What should I include in a reference and are there any risks to the business?
Where you provide a reference, you owe your employee (and the potential employer) a duty to take reasonable care to ensure the information provided is true, accurate and fair, and does not give a misleading impression. If it is not fair and accurate, your employee can challenge it, and you may face a claim for negligent misstatement.
When giving a reference, information should be limited to your specific knowledge of the employee; it should not include speculation as to their suitability for a new role.
If you refuse to give a reference, care must be taken to ensure that any refusal is not discriminatory. In giving a reference, you must also take care to avoid discrimination. Care should be given to comments about your employee’s performance, attendance or sickness absence where there is a risk that these may give rise to disability discrimination. A reference must also not victimise your employee, for example, if they have previously complained of discrimination.
You are also under an obligation not to make defamatory statements about your employee i.e., make an untrue statement that disparages their reputation. Any breach of this duty could allow your employee to potentially sue you for libel under defamation law. Where a reference contains untrue words that are published maliciously, you could face a claim for malicious falsehood.
Given the many risks associated, employers are increasingly providing brief factual references only setting out their employee’s job titles and dates of employment. Further, disclaimers of liability are included to cover negligent misstatements, errors and omissions.
You should also take care to ensure you comply with your obligations under the UK’s data protection legislation as providing a reference will generally involve processing personal data. You should take care when giving special category data (such as details of sickness absence) and check that you do not provide confidential references about your employee unless you are sure that the employee consents.
When providing a reference, you should always bear in mind the fact that an employee may see it, although there is an exemption regarding references where personal data can be withheld where it consists of a reference given or to be given in confidence for the purposes of actual or prospective education, training or employment. The exemption also applies to the future employer. However, if the employee brings a claim around the content of the reference, a court will order disclosure.
How can our business minimise risks?
To minimise risk, you should have a clearly defined reference policy to ensure proper consideration is given to whether to provide references and what information to include.
Content to consider includes:
who within the organisation can provide a reference
Summary of key “dos” and “don’ts”
If you have any queries or need help with creating a policy for references, please contact Jo Cullen Head of Employment at Edwards Duthie Shamash for a free initial discussion – Josephine.Cullen@edslaw.co.uk or 020 8475 7401
The information contained in this article is provided for guidance. It is provided for your information only and should not be used as a substitute for obtaining legal advice that is specific to your particular circumstances. It is strongly recommended that you seek advice before taking action.
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