An employer is under no legal duty to provide a reference, except in the financial services sector.
Whenever a reference is given, whether for employment or any other purpose, the referee has a duty of care to both the subject of the reference and the recipient. The employer must use reasonable care in the preparation of a reference to verify the information on which the reference is based. If the reference is inaccurate, the employer faces the possibility of being sued by the subject of the reference for negligence or defamation. There is also the possibility of being sued by the recipient of the reference for breach of the duty of care.
An employer is also under a duty of care to provide a reference which is in “substance true, accurate and fair”. The reference must be reasonable and not give an unfair or misleading impression overall.
Employers who are ‘economical with the truth’ in references should also beware. Even if everything said is true, if what is left out would change the references, it is negligent.
An employer could be excused for thinking that it may be simpler merely to confirm employment details. Although it is doubtful that this should be called a reference since it contains no assessment of work or character, as long as there is no duty to give a reference, this should suffice.
Dismissal references
An employer must take care not to dismiss for reason of poor performance/capability and then provide a satisfactory reference. It would be difficult to persuade an employment tribunal that an employee was fairly dismissed for being incapable of doing his/her job, if he/she had been given a glowing or even satisfactory reference.
Confidentiality
Under the provisions of the Data Protection Act 1998, if you give a reference about one of your employees in confidence to another employer, the employee concerned will not be entitled to access to the information.
Where you hold on file a confidential reference about one of your employees, which has been given by a previous employer, you can refuse to give the employee concerned access to the reference, without the author’s consent. If permission is refused, the employer has to decide whether the benefit of disclosure outweighs the duty of confidentiality.
Where oral references are given, the referee is less likely to make the reference confidential. There is also no control over any written notes that the recipient may make. If such notes are put on file and the employee asks for access, the employer will not be able to refuse on the grounds of confidentiality.
How to steer clear of claims
To steer clear of claims employers need to:
• Decide who can give a reference and set out a clear policy on references and who can give them. Ideally all references should be given by a manager of appropriate seniority in the company. Indicate whether the referee has personal knowledge of the employee.
• Decide whether simply to confirm employment details or give a full reference including an assessment of work and character.
• Never refuse to provide references as an act of retaliation against an employee who has previously claimed discrimination.
• Treat all requests for references equally and avoid discrimination.
• Ensure that all statements are based on fact.
• Mark all references as confidential.
• Do not give oral references.
• Establish prior to the ending of a worker’s employment whether or not he/she wishes the company to provide references or not