The thorny issue of whether to provide a reference, and if so, what to say,
was covered in a previous Letter of the Law (8 August). A new Court of Appeal
decision has changed the way in which employers should be looking at the issue
of references, once again making the easy option of not providing any
reference, or only a standard reference, look more attractive.
Current case law
In a case involving Sun Alliance Life, the Court of Appeal decided that the
approach employers should take in considering what to put in a reference is
similar to that developed by misconduct dismissal case law. Confused? I think
we are all a bit mystified. Essentially, Lord Justice Mummery’s view was that
only matters which have been properly investigated and which the employer has
reasonable grounds to believe are true, should be mentioned in any reference.
In the Sun Alliance Life case, an employee was thought to have been guilty
of dishonesty, amounting to corruption – potentially a gross misconduct
offence. Before the disciplinary hearing took place, however, the employee
resigned and thus the charges of dishonesty were never properly put to him. It
also seems that there had not been a proper investigation. In that case, the
employer was found to be negligent in stating in a reference that it had a
reasonable basis for dismissing the employee.
Conclusion
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In order to take reasonable care, therefore, employers should, in the view
of Lord Justice Mummery, confine unfavourable statements about an employee to
those matters into which "they had made reasonable investigation and had
reasonable grounds for believing to be true". He went on to say that where
an agreed termination takes place in such circumstances, the parties should try
to agree the wording of a reference, as commonly occurs. The problem many
employers will immediately see, however, is that in these circumstances, the
expectations of an employee are often quite unreasonable. They may have done a
good job in the past, but it is not open to an employer simply to refer to
previous good performance without also making a reference to the potentially
bad performance which resulted in the dismissal.
At its worst, the decision gives employees a way of avoiding a bad reference
by resigning and refusing to take part in any investigation of misconduct. At
its best, it is still a powerful incentive for employers to stick to the basic
facts, and avoid comment on more subjective matters. This is a shame since many
employers would agree that the reference system works to their benefit.
Employers should now, at the very least, be developing their own policy on
references.
