Daniel Isaacs, principal in the employment team at City law firm Withers LLP, explains the legal issues surrounding employee references.
Although it is not widely known, there is absolutely no obligation under English law to provide an employee with a reference. That said, it would be highly unusual to refuse to do so.
As with all rules, there is, of course, an exception. An employee who claims discrimination becomes protected from being victimised for having done so. Therefore, if an employer normally gives references to former employees but refuses to do so for a ‘troublemaker’ who raised a discrimination claim, it is quite likely that this decision would be regarded as unlawful victimisation.
Whether litigation is increasing or the fear of litigation is increasing, employers are much more nervous about writing references than previously. Many employers have expressed a view that it is unlawful to give a bad reference.
This is incorrect – it is only unlawful to give a false reference; employers simply owe a duty to take reasonable care in the preparation of the reference, and to ensure that it is true, accurate and fair.
However, if an employee cannot find alternative work as a result of an employer failing to fulfil his duty of care, the employee is likely to turn to the referee for redress.
Any such action would be based on a claim for negligence, in which an employee would have to show that the information contained in the reference was misleading, it would have a material effect on the recipient and that the employer was negligent in compiling it.
While it may seem tempting to give a good reference simply to avoid any backlash, It is worth bearing in mind that it is not just the employee who has a potential claim; a new employer could also sue the referee if they suffer as a result of relying on a reference that is misleadingly good or bad because it was carelessly drawn up.
There does not yet seem to have been a reported case of a new employer successfully suing over a reference which was too good, but it remains theoretically possible.
Putting a disclaimer at the end of a reference will not be enough to avoid liability, unless it contains an opinion about the employee’s suitability for a particular role that they have not filled in the past, in which case it may be considered to be reasonable.
One of the most difficult aspects of a negotiated termination of employment can be when a poorly performing employee is demanding a good reference. It is important to remember that a reference can be misleading by omission so, where an employer genuinely does not think it is possible to praise an employee’s performance truthfully, it is best to stick to facts such as detailing the employee’s responsibilities with any subjective comment as to whether performance was good, bad or indifferent.
Generally, people tend to go for the easy option – write nothing bad. This means that those seeking references will often follow up with a phone call – remember this is as much a reference as anything in writing.
Ultimately, as long as a reference is a true and fair representation of the employee, the employer should not have any cause for concern.
