Top Tips for Employee References

Posted on July 7, 2015
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References are a delicate area for employers; you want to be helpful to staff by providing references for them but you do not want to be held liable if you get it wrong. Mark Rothman, employment law solicitor, clarifies whether you have to give a reference, your liability as an employer, what you can and cannot say and what to do when requesting a reference.

Do you have to provide a reference?

There is no legal obligation to provide a reference, except in the financial services sector.  You can refuse, but refusal could be seen as discrimination if you normally give references and the employee suspects that you did not in their case because of their sex, race, disability, sexual orientation, pregnancy or maternity, religion or belief, age, gender reassignment, marriage or civil partnership.

Where an employee has previously brought a discrimination claim, a refusal to provide a reference could lead to a further claim of victimisation.  In addition, if you have entered into a compromise agreement or settlement agreement with an individual, you may be bound to give an agreed reference and a failure to do so, or departing from the agreed wording, will be a breach of contract which could lead to court proceedings.

Your liability as an employer

As an employer, you are legally responsible for the contents of any reference given in your name. This includes personal references given on headed notepaper, sent from a company email address or any that give the referee’s job title.

You are potentially liable to the employee and the prospective new employer.  The employee can make a claim in the event of discrimination, victimisation, defamation, malicious falsehood, negligent misstatement, breach of contract and constructive dismissal.  Claims can arise any length of time after the employee leaves employment.  In a recent case, an employee brought a successful claim for negligent misstatement when an unfair and incorrect reference was given by his former employer six years after their relationship had ended.

Employees have the right to ask for a copy of any reference you provide so are able to find out what you say about them.

You can also be liable to the new employer for negligent misstatement, if any part of the reference is untrue, or for deceit if you knowingly include false information and intend the recipient to rely on it.

What you can say

A reference must be true, accurate and fair and must not be misleading.  You have two options:

  • a basic reference; or
  • a full reference.

A basic reference is limited to the dates of employment, job title and salary on leaving.  In the case of a limited reference, you should explain that this is your policy and is no reflection on the individual.

In a full reference, you should not leave out something that will be relevant to the new employer.  You must also be able to back up anything you say.  For example, if someone resigns while they are being investigated for theft, you cannot say that they were dismissed for gross misconduct. Equally, it would be misleading just to state that they had resigned.

Your reference should be marked ‘strictly private and confidential, for the addressee only’ and include a disclaimer stating that it is given on the basis of the information available at the time and that you do not accept liability for any loss or damage caused to anyone who relies on it.

The Data Protection Act 1998 applies to references.  If you are asked to include any sensitive information, such as the employee’s sickness record or the reason for any absence, you should discuss what you intend to say with the employee and obtain their consent.

A reference policy

You should consider having an employment policy on giving references, which will state:

  • whether you provide references or not;
  • if you give references, whether they are full or basic;
  • which employees or levels of management can give references;
  • if verbal references are permitted;
  • if personal references are permitted;
  • what should be included in references; and
  • to whom any reference requests should be sent.

Your policy should be applied consistently in order to avoid any allegations of discrimination.

Requesting a reference

Although there is normally no obligation to request a reference for a prospective employee, it is common to verify their previous work history and a job offer should be made conditional on references being provided that are satisfactory to you.  If you have done this and unsatisfactory references are received, you can withdraw the job offer or, if the employee has already started work, terminate their employment.

Instead of asking for a general reference it is better to ask specific questions that you would like the previous employer to answer, such as:

  • dates of employment;
  • job title;
  • responsibilities;
  • salary;
  • reason for leaving;
  • suitability for the new role and details of their performance; and
  • attendance and disciplinary record.

You should contact the previous employer if anything is unclear or you need further information.  It is often better to do this by telephone, as you are more likely to obtain additional information this way.

Lastly, you should check that the reference is genuine.  In a recent survey by the Federation of Small Businesses, nearly one in five small businesses said that they had discovered candidates with fraudulent references. Be on your guard and check candidates’ employment histories carefully.

If you have any queries on giving or requesting references or if you are interested in introducing a reference policy, please contact us.

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