Legal Q & A: Employee references

Q What is an employer’s duty concerning references?

A The general rule is that the employer has no duty to provide a reference. However, there might be a regulatory duty to provide one, or an implied contractual right to a reference – particularly where it is an employer’s custom to provide one.

Where an employer fails (despite its usual practice) to provide a reference, the failure could also potentially be for discriminatory reasons, or could constitute victimisation if a discrimination issue has already been raised.

If a reference is provided, an employer owes a duty of care both to the subject of the reference, and to the prospective employer.

Q What is the legal issue here?

A In the case of Spring v Guardian Royal Exchange Assurance, it was held that the employer had breached its duty of care to Mr Spring by negligently preparing an inaccurate reference that went on to harm his employment prospects. There was a concurrent liability in contract by virtue of an implied term requiring due care and skill in the preparation of references. Subsequently, cases have made clear that the reference must, in substance, be true, accurate and fair, and must not give a misleading impression. However, it does not always have to be full and comprehensive.

Q Can a disclaimer allow a reference to avoid liability?

A An employer can include a disclaimer in a reference, subject to a test of reasonableness determined in light of the circumstances in which the reference is given, and its content. It could be struck down by the Unfair Contract Terms Act if it is unreasonable in scope.

Q Is it safer to give oral references?

A No – the same rules apply to both written and oral references. If giving an oral reference, it is important to keep a note of what is said. Obviously, however, it is harder to prove negligent mis-statement in oral comments.

Q What if we are very careful about what is said?

A Liability may arise not only in relation to what is said in a reference, but also to what is not said. In Lawton v BOC Transhield Ltd, it was said in passing that a reference concentrating on the excellent time-keeping of an otherwise thor-oughly incompetent employee could be as actionable as a reference containing incorrect statements. The judge stated that the test was whether a reasonably prudent employer, on the facts as found, would have expressed the opinions stated in the reference.

Q How does the Data Protection Act apply?

A A reference given by an employer is likely to involve the disclosure of personal information for the purposes of the Data Protection Act 1998. Those giving references should consider whether they are doing so on behalf of the employer or in a personal capacity. If giving a reference in a personal capacity, an individual should not incur liability on behalf of the employer. As a result of data protection laws, it would be prudent to consider whether the person requesting the reference is genuine and also to specifically confirm with employees whether they want references to be given. A reference given can be obtained by the employee from the prospective employer (but not the employer giving the reference) by way of a subject access request.

Q How can we be legally safe when giving references?

A Methods of minimising potential liability include:

– Having a policy of not giving references at all or, perhaps more realistically, confining the reference purely to facts

– Taking reasonable care to ensure the accuracy of a reference and making proper enquiries to verify this

– Ensuring the reference is a balanced assessment overall

– Stating the nature and extent of the acquaintance of the referee with the employee and indicating the parameters within which the reference is given;

– Including a (reasonable) disclaimer of liability in respect of negligent mis-statement.

Q If the employee performs poorly in the new job, could we be sued for the reference we provided?

A An ex-employer should not be liable for the poor performance of an ex-worker in a new job, so long as the reference given was a fair and accurate assessment of the level of the employee’s performance throughout their period of employment.

By Russell Brimelow, partner, Lewis Silkin

Comments are closed.