The days of reeling off references without thought are over. With so many legal traps surrounding the subject, employers are thinking long and hard about the process
With a myriad of potential pitfalls, employers providing references are now becoming more guarded than ever. Some take the view that it is easier, and safer, not to provide them at all. So have references lost their usefulness?
Duty of care
Employers are, by now, more than familiar with the concept that an employer who provides a reference owes a duty to take reasonable care with regard to its preparation, or else risk being sued by the prospective employer and the departing employee. Recent case law has built on this basic concept and highlights how important it is for employers to get it right.
There are two ways of looking at the effect of developments in this area. One view is that the law now inhibits employers from speaking frankly and leads to bland and unhelpful references. Another is that it encourages greater quality and value.
The fact that employers find it increasingly difficult to provide references which are helpful, informative and fair must surely mean that the value of references is now in question.
So, what are the main pitfalls? First, and most obviously, getting your facts wrong. An inaccurate reference may give rise to a claim for a breach of the duty of care from an employee or former employee. There may also be claims for negligent mis-statement from prospective new employers. If you are tempted to give a glowing reference to someone to help them on their way, the departing employee won’t object, but the new employer might well do if the new employee causes them loss.
If the employer is motivated by malice the employee may have further claims of defamation and malicious falsehood.
The employer needs to exercise particular caution if providing a reference for someone it has dismissed for, say, misconduct or capability. Good intentions on the part of the employer may lead to an unjustifiably favourable reference which could come back to haunt it in a subsequent claim for unfair dismissal.
The next pitfall – giving the wrong impression – is perhaps more tricky. Employers who think they are not exposed because their references are factual and accurate need to think again.
While references need not be full and comprehensive, the overall effect of references must not be misleading or unfair. Many may feel they cannot go far wrong by saying it as it is – this is not so.
Courts and tribunals are concerned more with the overall impression which a reference creates than whether each individual component is true. There is the added risk of constructive dismissal claims where references provided for existing employees mention matters (such as complaints) which have not previously been brought to the employee’s attention.
Employers are understandably nervous about references. So, are references really a reliable indicator of future performance or have they become bland, unhelpful statements which take a new employer no further forward?
It is certainly questionable whether references now form a valuable role in recruitment. For prospective employers there can be no substitute for a thorough selection and interview process.
Where employers are asked for references then, provided they have no contractual obligation, they may choose not to give these. Clearly, refusal to give a reference should not be related to sex, race or disability and as a general rule, a consistent approach across the workforce is best.
Otherwise, if continuing to give references then a potential solution to overcoming the pitfalls is to produce them centrally rather than on an ad hoc basis. Including a disclaimer is often a good idea as is input from somebody who knows the employee.
Louise Fairhurst is an employment lawyer at Wragge &Co