Although seemingly innocuous, the question of whether to give a reference for an ex-employee, and if so, what to say, has become the subject of some legal and practical difficulty. Concerns about potential liability to third parties have reached such an extent that many employers have a policy not to provide references at all, or, if they do so, only to provide basic facts about the employment, refusing to comment on the employee’s level of performance and other more subjective issues. This policy is, however, cautious and is not strictly necessary provided that the employer is careful when giving a reference.

Current legal position

The law relating to references was examined in detail in a recent case involving AXA Assurance. In that case, Mr Justice Burton confirmed there was no implied common law obligation for an employer to provide a reference, unless there was an express contractual obligation to do so. Furthermore, if one is given, there is no obligation for it to be full, fair and comprehensive.

The duty owed by the giver of a reference is to take reasonable care not to give misleading information about the employee, whether resulting from the unfairly selective provision of information or by the inclusion of facts or opinions in such a manner as to give rise to a false or mistaken inference in the mind of a reasonable recipient.

The Judge went on to say that in giving a reference, there is no duty to include all material facts in relation to the employment. Put another way, provided that the employer is careful to give a fair picture of the employee, no legal liability is likely to arise.

The onus is clearly on the employee to establish that:

1 The information provided in the reference is misleading

2 Providing such misleading information is likely to have a material effect on the mind of a reasonable recipient of the reference to the detriment of the employee, and

3 The employer was negligent in providing such a reference

Unless the employee proves all three, there will be no liability.

Practical points

Where an employee has performed to an unacceptably low level or has been dismissed for a reason which would cast doubt on his or her suitability to be employed by a new employer, the employer will be faced with three options: to provide no reference at all, to provide only a factual reference, giving the dates of employment at the job title only, or to give a fair picture, including a reference to the bad issues as well as good, using reasonable care not to give misleading information.

The failure by an employer to provide a reference in cases where a discrimination claim might have been alleged could give rise to a victimisation claim, in circumstances where the employee could show that references were commonly or routinely given. Otherwise, it would be difficult for an employee to complain about a reference not being given. However, the use of the reference procedure is so helpful to employers, in ensuring they do not make serious mistakes in recruiting, that it would be a shame for the whole system to break down due to a perceived problem of legal liability, which is, in fact, rather remote.

Employers should develop their own policy on references, in order to be consistent to avoid any victimisation claim or any non-legally-based allegation that they have acted unfairly or partially.

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