Granada was recently forced to pay almost £200,000 compensation to an ex-employee for failing to supply a reference, highlighting the importance of getting it right. Veronica Dean answers some of your most frequently asked questions
Is an organisation obliged to provide a reference? As a rule there is no obligation on an employer to provide a reference to a prospective employer of one of its past or current employees. But as with all general rules there are exceptions - as Granada Hospitality discovered recently when an award of £195,000 was made against it.
Granada refused to provide a reference to a former employee as a consequence of her having brought a successful sex discrimination action against the company in 1993 (she was awarded £11,000). Granada refused to provide any of the organisations she applied to with a job reference, making it very difficult for her to secure new employment. The ex-employee, who had been the manageress of a bowling alley owned by the Granada Group, brought her second claim against the company in 1994. It took five years to pursue, including a referral to the European Court of Justice.
The Employment Appeal Tribunal in Coote v Granada Hospitality (No 2), 1999, IRLR 452, held that in light of the directions given by the ECJ, Coote was entitled to have an employment tribunal determine her claim that she had been unlawfully victimised, contrary to the Sex Discrimination Act 1975 when Granada refused to provide her with a reference. This was despite the fact that she was no longer employed by the company. Coote was ultimately awarded £195,000 in compensation.
This case is undoubtedly an extreme example. The law relating to references is constantly changing but despite the Granada case the general rule remains that there is no obligation on an employer to provide a reference.
What is our duty of care to the subject of the reference?
An employer may be liable to an employee for any economic loss he or she suffers as a result of any negligent misstatement.
In the case of Spring v Guardian Assurance, 1994, IRLR 460, the House of Lords determined that an employer has a duty to take reasonable care in compiling or giving a reference and in verifying the information on which it is based. Where an employer gives an inaccurate reference about an employee to a prospective employer and it is foreseeable that the employee