There is no specific obligation on an employer to provide a reference for a former/departing employee. There would however be such an obligation if the employer agrees to provide a reference or there is a specific obligation to do so within that particular industry e.g financial services. There are certain points which should be carefully borne in mind when drafting or agreeing to give a reference, especially if the employer has experienced some difficulties with the employee in question.
Duty of Care
It used to be that the only action to be taken by the employee was for defamation and the employee would have to prove malice in order to defeat the defence of qualified privilege. With the extension of the law of negligence, the employer may now be sued for damages for negligence i.e it has breached a duty of care.
Therefore, where the employer has agreed to provide a reference or is required to do so as stated above or chooses so to do, a duty of care is owed both to the prospective employer to whom the reference is being provided and to the former employee. The employer is under a legal obligation to use due care when providing the reference to ensure that it is based on accurate information. The reference must be in substance true, accurate and fair and must not give a misleading impression.
This can place an employer in some difficulties. Liability may arise not only for what is said in the reference but possibly for what is not said in certain circumstances. For example, if an employee is incompetent but the reference omits this crucial information and concentrates on other matters e.g timekeeping, sickness record, length of service etc, a future employer could in theory institute proceedings because the duty of care has been breached.
Similarly, if the reference refers to disciplinary proceedings being contemplated against the employee of which he/she was unaware, the duty of care has been breached because the employee would have no opportunity of being able to answer the allegations which were never put to him/her.
A case decided in the Employment Appeal Tribunal held that a former employee could succeed in a claim for victimisation, and claim losses sustained as a result of a job offer being withdrawn following receipt of the former employer’s reference as the employee had been able to establish that the former employer’s reference was motivated by victimisation.
References often end with a disclaimer stating that the reference is provided without any liability on either the company or the individual sending it. Under the provisions of the Unfair Contract Terms Act 1977, such a disclaimer may only be relied upon to the extent that it is reasonable and this will determined by reference to the circumstances in which the reference is given and to its content.
Some companies adopt the practice of not providing written references or providing non committal replies to a written questionnaire but may be prepared to provide more detailed references over the telephone. Such a verbal reference is still covered by a duty of care – the only difference being that it may be harder to prove what had been said verbally. For this reason, a verbal reference may be worse for the employer because something said over the telephone may be misconstrued or taken out of context and it becomes one person’s word against another.
References are usually stated as being confidential between the sender and the recipient. If the employee felt that the reference breached the duty of care owed by the employer, the employee could obtain a Court Order seeking the disclosure of the reference if it was not voluntarily disclosed by the company. Please note however that under the Data Protection Act 1998, an employee has the right to see and to be provided with a copy of any reference received by the present employer from the employee’s previous employers. However, under the Act, an employee does not have the right to see or be provided with a copy of any reference issued by the present employer and sent to a prospective employer.
Unless the employee agrees, the employer should not disclose spent convictions unless the job is covered by the Exemption Order of the Rehabilitation of Offenders Act 1974.
More and more companies are now coming to the conclusion that the only safe approach is to provide a purely factual reference, which sets out the dates of employment, job position and sickness absences. However, most companies offer jobs on condition that satisfactory references are obtained in respect of the applicant and if the references obtained prove to be unsatisfactory, the offer of employment can be withdrawn without the employer being in breach of contract.
So on the one hand, a company expects to receive a full and detailed reference to assist in recruitment but on the other hand, may only give out factual references which is of no real assistance to the prospective employer. With the law as stated above, factual references have become more widespread and the solution is for employers to offer employment conditional upon satisfactory conclusion of a probationary period and then ensure that the employee is very carefully monitored during that probationary period.