The dos and don'ts for employee references

From time to time, organisations may be asked to give references for current or former employees, or may request references from others to find out more about prospective employees. At a time when local authorities are expecting to have to make staffing changes Simon Horsfield offers some guidance in relation to employee references.

Asking for references

When recruiting new employees, most employers will want to make a job offer conditional upon receipt of satisfactory references. To avoid disputes, the employer must make it absolutely clear that this is the case and, ideally, should also make it clear that it is for the employer alone to determine what is "satisfactory". Provided that offers are expressly stated to be conditional in this way, if a prospective employee's reference turns out to be unsatisfactory, there will never be any contractual relationship between the employer and employee.

In situations where job offers are not made conditional on receipt of satisfactory references, a situation may arise in which an employer receives a reference for an employee after they start work which is unsatisfactory. In such situations the employer may wish to terminate the employee's employment. To do so, it must be expressly stated in the job offer or contract of employment that the employer may terminate in such circumstances. If the offer or contract does not contain such a statement, the employer will need to give notice to terminate the contract in the normal way and will therefore be liable to pay the employee notice pay under the contract.

Giving references

Whether to give a reference

Generally speaking, employers are not under a duty to provide a reference for a current or former employee so, if they don't want to provide one, they usually won't have to. However, there are six situations in which employees may be legally entitled to a reference:

1. Their employment contract or their compromise agreement on leaving the organisation contains an express term which entitles them to one
2. It is the employer's usual practice to provide employees with one
3. A manager or person with authority has assured the employee that they will be provided with one
4. There is a regulatory requirement to provide one (e.g. the employee is applying for a position which requires FSA approval)
5. Where to refuse to give one would be discriminatory on grounds of age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation, or
6. Where to refuse to give one would amount to victimisation of an employee as a result of their having previously claimed or threatened to claim that they had suffered discrimination.

Employers can sometimes defend their reluctance to give a reference if they can show that the real reason they did not give one was because they did not want to prejudice their defence in ongoing legal proceedings.

Basic rules for writing a reference

Employers must take reasonable care to ensure that the facts contained in a reference are true, accurate and fair. Generally speaking (except, for example, where industry rules or practice require a full and frank reference) references do not have to be full and comprehensive. Some employers make a policy of limiting their references to the bare facts, such as the dates of employment and the position which the employee held. Employers are also entitled to set parameters within which the reference is given, such as by stressing their limited knowledge of an individual employee.

Do

• ensure that references are always given in writing and are marked 'Private and Confidential' and 'for the addressee only'
• ensure that the opinions expressed are reasonable
• be able to justify and support any comments made and honestly believe them to be true
• avoid creating an unfair impression of the employee, for example by focussing on negative and omitting positive facts
• adopt and apply a policy on who can give references to avoid situations in which managers who believe themselves to be giving a personal reference are actually considered to be giving a reference on behalf of the employer, and
• adopt and apply a policy which ensures that the form and the situations in which references are given are consistent, to avoid discriminating against any employee or group of employees.

Don't

• give references over the telephone
• speculate on an employee's suitability for a role which is materially different from the role which they currently perform
• omit negative facts or comments if this would give a misleading impression of the employee's performance or capabilities
• refer to any disciplinary action to which the employee is subject unless the employer: genuinely believes in the truth of the facts which are being referred to; and has reasonable grounds for believing that the facts are true; and has carried out as much investigation into the matters referred to as is reasonable under the circumstances
• refer to an employee's performance levels, attendance or sickness absences which relate to a disability
• give details of an employee's medical conditions or personal circumstances without their consent
• make any statements which are untrue or which the employer has not made reasonable attempts to verify, or
• allow any grievance that the employee raised before leaving your employment to impact on the terms of the reference that you give or whether you give a reference at all.

The risks of getting it wrong

Employers who give misleading or inaccurate references could find themselves facing claims from either employees or organisations which have relied on those references to their detriment.

A former employee can sue for defamation if an employer gives an inaccurate reference that is unfairly critical of the employee. In addition, a third party employer that relies upon a misleading or inaccurate reference might be able to sue the former employer for the loss which it suffers as a result.

Consequently, it is normal practice to include a disclaimer of liability in a reference which should be effective in respect of claims for negligent misstatement by the recipient of the reference. However, disclaimers are unlikely to be effective in limiting an employer's liability to the subject of the reference itself. Under the Data Protection Act, an employee may be entitled to see his or her reference by making a subject access request and, if the reference contains something which the employee regards as unfair, this could lead to conflict and legal action against the employer.

Finally, a recent Employment Appeal Tribunal case has extended the possible liability of employers in this area. In Bullimore v Pothecary Witham Weld Solicitors and another (UKEAT/0189/10), the EAT held that the actions of a claimant's former employer and prospective new employer both amounted to unlawful victimisation and that both were liable to pay compensation to the employee concerned.

The case involved a firm of solicitors who had given a poor reference in relation to a former employee. The reference was critical of the employee because she had previously pursued a claim of sex discrimination against the firm. The reference mentioned the sex discrimination claim and cited it as an example of the claimant's "poor relationship" with the firm's partners. The claimant was also described as being "inflexible as to her opinions." As a direct result of the poor reference, a prospective new employer withdrew its job offer to the claimant. Although the claimant and the prospective new employer reached a settlement before the tribunal remedy hearing, the hearing nevertheless considered the level of compensation which the former employer should pay (if any).

The tribunal initially held that the former employer was not liable but, on appeal, the EAT held that it was "evidently foreseeable" that the prospective employer would withdraw its job offer as a result of the reference and, even though to do so was unlawful discrimination in itself, this was a "direct and natural consequence of the supply of the information." Consequently, as a matter of policy and fairness, the former employer should be liable to the claimant as well.

This case confirms that, if the reason for the inaccurate or critical content of the reference is that the employee has previously lodged a grievance or brought a Tribunal alleging discrimination, the employee could sue the writer of the reference for discrimination by way of victimisation. Even where the actions of the new employer are themselves unlawful (for example in considering an employee's past claims of discrimination when deciding whether to offer them a job), the employer which gave the reference will still be liable to the subject of the reference for their losses.

Simon Horsfield is a partner specialising in employment law at Pinsent Masons. He can be contacted on 0161 250 0213 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..