Employer has duty to give a fair reference

Employers owe employees a contractual duty when providing a reference or
else they could find themselves the subject of a claim

Over the past couple of years there have been a number of cases concerned
with references, all of which have sought to clarify the duty an employer owes
to an employee or former employee when giving a reference. Most recent has been
the case of Cox v Sun Alliance Life, 2001, IRLR 448, clarifying, as it did, the
duty owed to an ex-employee.

This case highlights the tension between the duty owed to former employees
and the need to give new employers an accurate and fair picture of the
individual.

As Lord Justice Rix noted in Cox, the need to do justice to a former
employee and to be truthful about the circumstances in which he or she left
"may put the old employer in a difficult situation".

Employers owe current employees a duty both in contract and tort to provide
a fair and accurate reference. The case of Spring v Guardian Assurance, 1994,
ICR 596, established that employers owed employees a duty of care in negligence
when providing references. TSB v Harris, 2000, IRLR 157, took this one stage
further and confirmed that, when providing references for existing employees,
employers also owed employees a contractual duty. Failure to adhere to this contractual
duty would be a breach of the implied term of trust and confidence entitling
the employee to resign and claim constructive dismissal.

For a reference to be fair and accurate, the Court of Appeal in Bartholomew
v London Borough of Hackney, 1999, IRLR 246, held that it is not necessary in
every case for it to be full and comprehensive. It is not enough that the
constituent parts of the reference are accurate, but the overall impression
given must be fair.

Employers must also consider the question of discrimination when deciding
whether to provide a reference and, if so, in what form.

In Coote v Granada Hospitality (No. 2), 1999, IRLR 452, the employer was
held to have victimised Ms Coote contrary the Sex Discrimination Act for
failing to provide her with a reference after she had previously brought a sex
discrimination claim against them.

Employers must also be careful that, what goes into the reference, in
comparison with references given about other employees, does not amount to
discrimination or victimisation, as in the recent unreported EAT case of
Rooproy v Rollins-Elliot and another. Here a reference which differed from
references given to colleagues, in that it mentioned discrimination
proceedings, was held to be victimisation.

How much information to provide in a reference becomes even more complicated
when, as in the cases of Cox and Bartholomew, the employee has been the subject
of misconduct allegations before the employee’s resignation.

In Bartholomew the Court of Appeal found it was acceptable for his former
employer to have mentioned that he was under suspension for misconduct at the
time of his resignation, although the fact that he had applied for a job as a
social worker may have had some influence on its decision. Conversely, the Court
of Appeal did not accept that Sun Alliance should have told Mr Cox’s subsequent
employers that he had been suspended because, in this instance, Sun Alliance
made statements about the suspension which were not accurate.

Although some employers may seek to rely on "disclaimers" in order
to avoid liability, they are highly unlikely to be effective in overriding an
employer’s duty either to its employees, former employees or a new employer;
although this has yet to be tested in the courts. When giving a reference,
whether orally or in writing, employers should be fair, accurate and have
reasonable grounds to support any statements made.

By Paul White, a senior associate at Stephenson Harwood

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