Employment References – beware!

A recent EAT decision is a reminder of the trouble an employer and former employer may face over a misguided or inaccurate reference. It’s a common myth that you can’t give a “bad” reference but in fact, employers have a legal joint duty of care to both the recipient of the reference and the employee/ex-employee that the reference given is truthful. Any employment reference given must be true, accurate and fair and must not give a misleading impression. This does not mean that the reference has to be full or completely comprehensive, but employers must take care not to be unduly selective about the information it provides if that information is likely to give a misleading picture overall.

Pitfalls

An employer giving an inaccurate reference ‎without giving due care to its preparation can give rise to a damages claim if it leads to an ex-employee being dismissed by a new employer or a job offer being withdrawn. Many employers wrongly believe that it is only a written reference that poses risks of a claim and so try to get around the problem by providing verbal references – however, verbal references present the same risks as written ones.

Where a reference is agreed as part of a Settlement Agreement with a departing employee, it is particularly important that its contents are not deviated from in any way.

Perhaps more worrying to many employers is the fact that a prospective employer receiving a reference making adverse comments or disclosures related to a candidate’s sickness absence and withdrawing a job offer on the basis of its contents, could find themselves liable to claim for disability discrimination.
It is important that any reference should include only information that is known to the employee. By law, statements made in a reference that are unfavourable to the individual should be included only if the relevant matters have first been put to the individual and there are reasonable grounds to believe that they are true. It’s therefore important than any new/prospective employer should not respond to anything negative in the reference unless they are sure he/she was fully aware of how the employer felt about it before he/she left.

Avoidance of risks

It is advisable for employers to have a policy on providing references, which should specify who can provide references on the Company’s behalf, in what format, and the type of information that will be included.

To avoid risks of claims from previous employees – and claims from prospective employers if the employer does not disclose relevant information – it is now common practice to give references that only provide basic employment details, such as name, role, dates of employment and (if appropriate) the reason for the termination.

A prospective employer receiving a reference making adverse comments or disclosures related to a candidate’s sickness absence should not necessarily just take it at face value and withdraw a job offer.  It may be better to consider what further investigations are necessary before the decision is made to withdraw a job offer, for example whether absences might be related to a disability.  If in doubt, seek our advice.

What’s the point of references then?

Whilst it is true that there is generally no legal obligation to provide a reference (except, for example, when dealing with approved persons in regulated financial roles) a refusal to provide a reference, or the provision of a poor reference, because an employee or former employee has complained of discrimination (or assisted another with a discrimination claim) is likely to amount to victimisation.  Furthermore, employers will of course want to check that the details given by a candidate are correct and most will be pleased to receive any additional information about the individual that can be legally given by his/her former employee.

If you are giving a fuller reference about an ex-employee, the inclusion of a disclaimer of liability arising from errors, omissions or inaccuracies in the information provided in a reference should be effective against a claim from the recipient of the reference if it satisfies the requirement of being “reasonable”. If you are not sure what may be considered “reasonable”, seek our advice.

Summary

• Ensure that anyone providing references on behalf of the organisation is aware of the need to take steps to ensure that the reference is true, accurate and fair.
• Have a written policy on how references should be handled and who within the organisation can provide references.
• On receipt of a request for a reference, check whether or not there is a settlement agreement in place in respect of the individual governing the contents of any reference.
• Consider carefully how to deal with negative information such as details of disciplinary or sickness absence issues.
• Include a disclaimer if providing more than a very simple facts-only reference.

Hopefully this will have provided you with some information and advice regarding references, but please be aware that this is only a very brief summary of some of the pitfalls and processes to help overcome them.

 

 

Su Allen HR helps employers by providing a range of HR support that includes advice on how to handle ‘live’ issues, writing clear policies which ensure fairness and consistency in all aspects of managing employees, and providing coaching and training where required. Contact us on 01582 883299 if you’d like to hear more.

Helen Skepper

Su Allen HR

The purpose of this information is to provide guidance only.  Reference has been made to various publications including People Management, Croners, Equality and Human Rights Commission, IDS and XpertHR. The information contained within this document is accurate, to the best of our knowledge. It is intended to provide general employment related information only and must not be relied upon as a substitute for legal advice from your Solicitor. Consequently we cannot accept any responsibility for this information or for any errors or omissions.