Employment references: the legal issues

The
Daily Mirror’s success in getting an undercover reporter into Buckingham Palace
to expose shoddy security has put the royal HR team under scrutiny. The team
failed to secure adequate references. Employment lawyer Pattie Walsh spells out
the legalities of issuing references

Can
an employer refuse to issue a reference?

There
is generally no obligation on an employer to provide a reference about an
employee or ex-employee unless there is an express or implied contractual
obligation to do so. There are exceptions to this, such as where a reference is
required by a regulatory body – for example, the Financial Services Authority.
Further, discrimination legislation has been extended to protect ex-employees
so that the giving of references is now covered by the legislation. A refusal
to provide a reference may therefore create difficulties for the employer; such
as if an employee is able to argue that the failure to provide a reference is
for a discriminatory reason.  

What
are an employer’s obligations regarding the issue of references?

If
an employer does decide to provide a reference, legal implications arise both
in relation to the recipient and to the employee. The employer owes a duty to
the recipient not to make careless or negligent comments. The employer also
owes duties to the employee. An employer must take reasonable care and any
reference must be true, accurate and fair, and must not give a misleading
impression. If an employee fails to secure a job because of an inaccurate
reference, he or she may be able to sue their ex-employer. There is no
obligation on an employer to provide a full and comprehensive reference but
care should be taken to ensure that if information is omitted, the reference,
as a whole, is not misleading.

Can
an employer limit its liability in relation to the content of a reference?

It
is generally accepted that a disclaimer stating that the employer cannot accept
any liability for errors or omissions in the content of a reference is likely
to be ineffective if its content falls within the employer’s direct knowledge.
There is no disadvantage in including a disclaimer, however, as it may deter
litigation.

Can
an employee request to see the reference?

Pursuant
to the Data Protection Act 1998, employees are not entitled to have access to a
reference given in confidence by their employer if the reference is given for
the purposes of education, training or employment (present and prospective) of
the employee. An employee may request a copy of the reference from the
prospective employer, but this is not an automatic right where the reference
identifies the former employer giving the reference. In these circumstances, it
will only be disclosed if the former employer consents or it is reasonable to
disclose the letter without consent.    

What
should employers do to protect themselves?

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The
best way of covering an employer’s obligations is to implement a reference
policy establishing who can give references and how granting access to such
references is controlled.

By
Pattie Walsh, a partner at Richards Butler