When giving an employment reference, an employer treads a tightrope between possible claims of negligence from the prospective employer and claims from the departing employee if a reference is misleading or incomplete. We look at the responsibilities of an employer when giving a reference and some of the tricky situations to watch out for.
Q Do employers have a legal duty to provide a reference for an ex-employee?
Employers are generally under no duty to provide a reference (apart from specific cases, eg for regulatory requirements). If they do provide one, they owe a duty of care to the prospective employer and could be sued for damages if they breach that duty.
Spring v Guardian Assurance  ICR 596 established that an employer also owes a duty of care to the employee concerned and that an employee can sue his or her former employer if the employer fails to use reasonable care in preparing the reference. The House of Lords did not think this decision would affect employers' practices of giving references but the reality is that employers now exercise more care when providing them.
It is, therefore, important for a reference to be true, accurate and fair. It is also crucial for employers to make sure they have a consistent policy on references, so that those giving a reference are clear about what they should say and employees' expectations are managed in relation to what it might contain, to help avoid allegations of discrimination or victimisation if employees are treated differently.
Q What should a reference contain?
In practice, many employers simply provide a basic, factual reference comprising the employee's dates of employment, job title and sometimes the reason for leaving. If company policy is to provide only brief factual details, it should be explained in the reference that this is the case. It will be important to make sure that the reference contains only accurate statements and provides a balanced, fair overview of the employee.
References should be marked "private and confidential for the addressee only". The provision of a reference will usually be subject to the Data Protection Act 1998 and as such should be kept securely and disposed of when the employee leaves employment (unless it needs to be retained in accordance with statutory requirements). Particular care should be taken if a reference contains sensitive personal data, for example details of an employee's sickness absence record.
Q What should an employer do if allegations about an ex-employee's conduct or capability come to light after they have left?
The recent helpful and reassuring case of Jackson v Liverpool City Council  EWCA Civ 1068 found that an employer was not negligent when it provided a reference that referred to allegations against a former employee but made it clear that these allegations had not been investigated.
If an employee leaves when an investigation is ongoing but has not been concluded, or where issues arise after an employee leaves that have not been investigated, employers can disclose this information but should do so in a measured and fair way. This will be particularly important if to omit this information would mean providing a misleading reference. If the information is disclosed, employers should be careful to make it clear that the issues have not been investigated and therefore no assumptions should be made about what the outcome of the investigation might have been.
Q Are there any risks for the recipient of a reference?
A recipient of a reference needs to be careful about any action they take following receipt. In Bullimore v Pothecary Witham Weld Solicitors and another UK/EAT/0189/10 the actions of the prospective new employer (as well as those of the old employer) amounted to unlawful victimisation. The reference mentioned a sex discrimination claim and was critical of the employee because of this. As a result of the poor reference, the prospective new employer withdrew its job offer.
Q Can an employer owe a duty of care, even after a significant lapse of time?
Yes, in McKie v Swindon College  EWHC 469 the court held that a former employer was liable for making careless comments about an ex-employee in an email to the individual's new employer six years after the employee left. The comments resulted in the dismissal of the individual. This case also shows that comments made in emails or orally can be as damaging as those made in a formal reference, so care should be taken when commenting on former employees in any format.
Bernadette Daley, partner, and Laura Pharez, associate, employment group, Mayer Brown