Providing a reference has become viewed as a legal minefield in employment law, with many employers refusing to give a reference or simply confirming the period of employment and position held, by providing a ‘certificate of employment’. This reluctance is understandable, but there might be circumstances when you are required or wish to provide a reference, so what should you do when providing a reference?
This employers’ guide will set out the key elements to bear in mind when providing a reference for an employee.
We’ll be covering:
- Is there a general duty on the employer to provide a reference for an employee?
- When is there a duty to provide a reference?
- What is best practice when providing a reference?
- Can employers refuse to give a reference for an employee?
- What are the legal requirements if you do provide a reference?
- Do you have to give a comprehensive or detailed reference?
- What is the potential liability for the employer in giving a reference?
- Do disclaimers work in employment references?
- Are there any Data Protection Act issues when giving a reference?
- How do you deal with outstanding disciplinary matters in a reference?
- Practical tips on providing a reference
Is there a general duty on the employer to provide a reference for an employee?
No. There is no general duty on an employer to provide a reference for an employee or former employee, but there are exceptions when there is a duty to provide a reference.
When is there a duty to provide a reference?
There is a duty to provide a reference:
- If there is an express term in a contract that a reference will be given.
Whilst this is uncommon, if it exists, you have an obligation to provide a reference. It is usual for there to be an express requirement to provide a reference in a settlement agreement and in those circumstances your duty and contractual obligation is to provide the reference, as negotiated and in the agreed terms set out in the settlement agreement. When you contractually agree to give a reference, it is advisable to take legal advice before agreeing the content of the reference to avoid binding your organisation to providing a reference that could expose it to legal liability.
- If there is an implied term in a contract that a reference will be given.
If your organisation has always given references for its employees or for employees at a certain level, then it is possible that the employee could argue that it was always implied that you would provide a reference if they left your employ.
- If there is an obligation to provide a reference set out in an applicable regulatory body for your organisation.
If your organisation is authorised by the Financial Conduct Authority or the Prudential Regulation Authority, you are required to request and provide references as part of their assessment of the person’s fitness and propriety for the role.
What is best practice when providing a reference?
It is best practice for your organisation to have a clear written policy setting out:
- Whom in your organisation is authorised to provide a reference
- What can and should be included in a reference
- What should not be included in a reference
- A template reference which sets out the language to be used, to ensure consistency of wording used every time a reference is given
- Whether an oral reference can be given and that where it can, that this is consistent with any written reference
- Whether there is any vetting/checking process on the proposed reference and if so, how that is carried out
Can employers refuse to give a reference for an employee?
Yes. Unless you have a contractual or regulatory obligation to do so, you can refuse to give a reference, but should consider the following, if you choose to do so:
- Dose your organisation’s policy state circumstances, you can refuse to give a reference?
- Do the circumstances you are refusing to give the reference fit completely with the exceptions on providing a reference in your organisations policy?
- Could the refusal to give a reference be based on a discriminatory reason?
- Have you kept a written, dated record of the reasons why you have declined to provide a reference?
If you do not have a written policy, then you still have an obligation to consider how you have dealt with requests for references in the past, whether the reasons why you do not wish to provide a reference are consistent with the reasons you have refused previously, and that they are not discriminatory. A written policy can assist in ensuring you make consistent decisions on the same basis, our expert employment solicitors can help you draft or update your policy. Regardless of whether you have a written policy about references, it is advisable to keep a written dated record of the reasons why you are declining to give a reference.
What are the legal requirements if you do provide a reference?
There is no legal standard format for a reference. That said, there are legal standards that you must keep to if you are going to provide a reference.
A reference must be truthful, accurate, fair and must not give a misleading impression. It must be all those things; not just some of them.
A statement is capable of being both truthful and misleading. Here are a couple of examples:
- You have an employee who was habitually late for work (and you took no disciplinary action) but their work when they arrived was good. Stating in a reference that the individual always produced good work would be both truthful and misleading. It is an accurate assertion, but it does not present the full picture and it is not fair. On this occasion, it is not fair on the prospective employer.
- You have a high-flying employee who was out-performing all other colleagues and you simply describe their work as satisfactory. It would be true that the employee’s work was satisfactory, but it would be unfair to the employee not to highlight the fact that the employee was a high performer, and it would give a misleading impression of their ability.
Do you have to give a comprehensive or detailed reference?
No. The legal obligation is to give a reference which is truthful, accurate, fair and not misleading.
This does not mean that you must give a detailed or comprehensive reference. As indicated, it is fine for you to give a ‘certificate of employment’. It is legally acceptable for your policy or business practice to be that you provide a reference that simply states the start and finish date of employment and position(s) held by the employee.
Do, however, bear in mind that even if you do not have a legal obligation to provide a certain type of reference you must be consistent. Keeping to your organisation’s policy or past practices if you do not have a policy, are the best ways of ensuring this.
A more detailed reference is likely to include information about:
- Job performance
- Disciplinary record
- Absence record
- Reason for leaving
In the majority of cases the employer’s official reference will be a basic factual reference, and a personal reference by an individual who has worked with the employee leaving the organisation, will generally be more detailed.
What is the potential liability for the employer in giving a reference?
There are potential areas of liability regarding the giving of references. Most references are stated to be given on behalf of the employer or former employer. If, however, during a verbal reference it is not made clear that an individual is giving the reference on behalf of the employer, it is possible for that individual to be held personally responsible for the contents.
Potential claims that could be brought include and against whom they could be brought are set out in the table below:
|Potential claim||Against?||From?||What evidence is needed for claim?|
|Discrimination||Organisation and/or individual giving the reference.||Employee (or ex-employee) who has previously brought discrimination proceedings against the employer, given evidence or information in connection with such proceedings, made an allegation of unlawful discrimination or done anything else under or by reference to discrimination legislation.||The unfavourable reference was given because of an actual or perceived ‘protected characteristic’.|
|Victimisation||Organisation and/or individual giving the reference.||As above.||The unfavourable reference was given because the individual raised a discrimination claim or supported such a claim.|
|Defamation||Organisation and/or individual giving the reference.||Subject of the reference.||An untrue statement that diminishes the reputation of the individual in the estimation of right-thinking members of society. There is a defence if it is made without malice and there was a legal, social or moral duty/interest in making the statement.|
|Malicious falsehood||Organisation and/or individual giving the reference.||Subject of the reference.||The reference includes an untrue statement, which the person giving the reference knew was untrue or was recklessly indifferent to the truth.|
|Negligent misstatement||Organisation and/or individual giving the reference.||Subject of the reference and/or new or prospective employer.||A statement that was given without reasonable care that the content is truthful, accurate and not misleading.|
|Breach of contract||Organisation giving the reference.||Subject of the reference.||There is likely to be an implied duty to take all reasonable care when preparing a reference and if the statement was not given with such care, it could be a breach of contract.|
|Deceit||Organisation and/or individual giving the reference.||New or prospective employer.||The person giving the reference knowingly includes false information with the intention that the recipient will rely on it.|
|Breach of Data Protection Act 2018||Organisation giving the reference.||Subject of the reference.||There has been a breach of the Data Protection Act 2018 in terms of how data belonging to the individual has been handled.|
Further, to avoid discrimination claims, you should be very careful about refusing a reference if the reason you are going to refuse is because of any characteristic of the individual concerned that is protected under the Equality Act 2010 (known as ‘protected characteristics’). Protected characteristics are:
- Gender reassignment
- Marriage or civil partnership
- Pregnancy or maternity
- Religion or belief
- Sexual orientation
The protection against discrimination covers employees and former employees, who could still bring a claim even after they have left your employment even if they have not raised a discrimination claim during their employment with your organisation.
If an employee raises a discrimination claim during employment and you refuse to give a reference, the employee may also attempt to bring a victimisation claim against your organisation.
You should not make comments on attendance/sickness absence and performance if any of these matters are related to the individual’s disability that you knew about or ought reasonably to have known about. This is because it could give rise to claims for disability discrimination or victimisation (if the individual already raised issues of discrimination).
Do disclaimers work in employment references?
It is common for employers to use a disclaimer at the end of a reference stating that they are not liable for any claim from the employee or any prospective employee. Common wording would look like:
‘This reference is given to the addressee in confidence and only for the purposes for which it was requested. It is given in good faith and based on the information available to the employer at the time it is given, but neither the writer nor [name of your organisation] accepts any responsibility or liability for any loss or damage caused to the addressee or any third party as a result of any reliance being placed on it.’
The scope and effect of such a disclaimer is, however, limited.
If a clear disclaimer is used, then it could protect your organisation from claims of negligent misstatement from the prospective employer.
It can also protect your organisation against a claim for negligent misstatement from the employer, if the employee has agreed to the reference being given on that basis before the reference is given. So, it is likely to be effective when the reference is agreed as part of a settlement agreement. There is nothing to stop your organisation from getting that agreement from the employee in other situations, but any such agreement must be free from pressure.
Even if you do have the employee’s prior written agreement, the disclaimer is only effective so far as it is reasonable. You cannot hide behind it to avoid the underlying legal requirements for a reference.
If your organisation is in the public sector, you have additional duties to act with honesty and integrity and you cannot dilute this duty by using a disclaimer in a reference.
Are there any Data Protection Act issues when giving a reference?
Yes. When your organisation provides a reference, it will generally process personal data. You should be particularly aware of data protection requirements when providing information in a reference about an employee's sick record or reasons for periods of absence, as under the General Data Protection Regulations (GDPR) information about an individual's health is special category data and processing special category personal data is generally prohibited. This prohibition does not apply where the employee has given explicit consent and the processing is necessary for carrying out rights and obligations under employment law.
An area of particular concern is the common question raised in reference requests of the number of days absence the individual has had in the past 12 months. This is because absence from work is predominantly due to sickness and such information might be ‘sensitive personal data’. If it is, then the employee’s express consent is required before it is given.
If the request is for ‘absence days’ rather than ‘sickness absence days’ then it could include unpaid leave, time off for interviews (in redundancy situations), family leave, or bereavement leave and so on. It would therefore not be indicative of sickness or the reasons for the absence generally.
An employee who is unhappy with the content of a reference has the right to object to the reference being given, to rectify the information included or erase the information in question.
The employee may have a right to claim compensation for any breach of the GDPR. To avoid expensive pitfalls of giving references, you can seek specific data protection advice at an early stage from our solicitors, or you can read further general information on the principles of data protection in our Data Protection FAQs, and Your Business Guide to GDPR Compliance.
How do you deal with outstanding disciplinary matters in a reference?
It can be tricky to know what to say when you are being asked to give a reference for an employee against whom the disciplinary process has started, but not concluded.
In this situation it is important that you go back to your core legal requirement. You must give a true, accurate and not misleading statement.
This means that you include a statement that sets out the reason for starting the disciplinary process, the stage of the process reached, the position taken by the individual in that process and why it was not concluded.
To leave out such information would result in a potentially misleading reference.
If there are issues that have only come to light after the employee has left your employment, then it is permissible to include such issues, but you would need to make it very clear that such matters have not been investigated and therefore no assumptions should be made.
Obviously, you could also take the view that such matters have not been investigated and therefore you cannot include it because you do not know whether the issues are true. If you include a disclaimer, then this is likely to be enough to protect you from future liability from the recipient of the reference.
If your organisation is authorised by the Financial Conduct Authority or the Prudential Regulation Authority, then you are required only to disclose disciplinary matters that have been concluded. There is, however, also a general requirement to include all information relevant to the recipient of the reference so they can assess the individual’s fitness and propriety for the role. This will therefore be a judgment call for your organisation depending on the circumstances of the case. Essentially, you would need to be confident that you are being fair in considering the matter significant enough to justify the disclosure.
Practical tips on providing a reference
So, now you are aware of the key elements when providing a reference, here are our practical tips:
- The reference is provided in accordance with your organisation’s reference policy or past practices.
- If you are going to provide only a ‘certificate of employment’ containing a brief factual reference with dates and job role or roles, ensure you explain that it is your organisation’s policy to provide a reference only in this format.
- The reference is consistent with the real reason for any dismissal and any written reasons provided.
- The reference does not contain inaccurate statements.
- The reference provides a balanced overview of the individual, although it does not need to be full and comprehensive.
- The overall picture the reference gives is not misleading and does not unfairly present a poor impression of the individual.
- The individual is aware of any complaints or performance concerns that are referred to in the reference.
- Any information about absence complies with the employer’s obligations under the GDPR.
- Any comments about performance or absence do not give rise to a claim for disability discrimination under the Equality Act 2010.
- Keep comments to information you know to be true, accurate and not misleading. Take care if you expand on those comments to refer to the individual’s suitability for the prospective role. It will be harder to justify that this was a true statement.
- Ensure the reference is marked ‘Private and confidential for the addressee only’.