References – The Challenges Employers Can Face

What should you consider when providing a reference for a former employee?

The normal position nowadays with references is that an employer will only set out the length of time an employee has worked for them and the role they undertook. This is known as a ‘standard reference’.

Where an employee has been employed for a long time, the employer may be inclined to provide additional information, but in my experience this is rare. There is good reason for this approach, and I set out the issues employers can face below.

References where additional information must be provided

There may be some situations where additional information needs to be provided, such as where regulatory requirements necessitate this. In such situations, I would ensure that the individual providing the reference is aware of the employer’s position regarding references, and the reference is vetted before being submitted.

When are employer’s liable for the content of a reference?  

Where a reference is provided on behalf of the employer, the employer will be legally responsible for the content of it. It is therefore recommended that employers ensure those who provide a reference on behalf of the business or organisation are aware of the approach taken i.e. if only standard references are provided, they understand what this means.

I would recommend that only managers or the HR department (if you have one) are able to provide a reference on behalf of the employer to minimise the risk of a claim.

Are employers required to provide a reference?

There is generally no legal obligation on an employer to provide a reference, however, there are a few exceptions to this such as if the employer is contractually required to provide a reference or is required to by a regulator.

What to consider when providing a reference

Employers need to ensure that their approach to references is consistent to avoid any argument that their refusal to provide a reference or content of the one provided, is discriminatory. It is for this reason many employers only provide a standard reference.

In addition, if the reference is deemed to contain false or misleading information, an employee may also be able to claim negligent misstatement within the county court for any loss suffered as a result of the negligent misstatement.

Most references are provided once an employee has left the employers employment (although this is not always the case). Despite the employment relationship having ended, a former employee can still bring a discrimination claim under the Equality Act 2010 if they consider the poor reference has been given due to a protected characteristic. The characteristics covered by the Equality Act 2010 are:

• Age
• Disability
• Gender Reassignment
• Marriage and Civil partnership
• Pregnancy and maternity
• Race
• Religion or Belief
• Sex
• Sexual Orientation

In the circumstances, employers need to be mindful about including information in a reference relating to performance, sickness absence, and investigations, and need to be 100% certain that they have followed due process to reach a reasonable conclusion of performance issues or investigations if they are going to include in a reference.

Discrimination claims, following termination of employment, can be pursued under section 108 of the Equality Act 2010 where the alleged discriminatory act arises out of or is closely connected to an employment relationship which previously existed.

In addition, section 108 also covers post-employment victimisation, which means that a former employee could assert that the failure to provide a reference/content of a reference is due to them raising concerns relating to discrimination during the course of their employment (where applicable).

Given the potential claims that could be pursued, if a poor and/or inaccurate reference is provided, it is important to ensure consistency in dealing with reference requests and training is provided to employees who are able to respond to reference requests on behalf of the business. If you are in any doubt, the best approach to take is to provide a standard reference.

If you would like to discuss matters further, please contact us on 01983 897003 to see how we could protect your business.

If you have lost out on a new job role or offer because of the content of a reference, please do get in touch as you may have a claim for your loss as a result of that reference.