The reference minefield

When someone leaves a job and is looking for a new one, it is very common for the employee to ask its previous  employer for a reference to give their potential employer.

Put in that situation, most employers will want to appear helpful and oblige. Why wouldn’t you help? especially if it is someone you like.

However, the law in this area can be complicated, and so employers will need to make sure that they are not inadvertently putting themselves into trouble when trying to be helpful to an ex-employee.

An employer providing a reference should bear in mind the following:

• Other in certain specific circumstances (for example if there is a contractual obligation to do so, or in particular industries e.g. financial services), there is no legal obligation to provide a reference.
• On the other hand, if an employer decides not to provide a reference, it should be careful as to why the reference is not being given or it may for example open itself up to a discrimination claim.
• A reference should be true, accurate and fair and should not give a misleading impression of the employee. It should also not be discriminatory.  If the reference does not reflect that, the employee may have a basis for  a claim against the employer providing the reference.
• The party receiving the reference will be entitled to rely on it.  If the reference proves to be inaccurate for example, and as a result, the new employer suffers a loss, the new employer may look to recover this loss from the party giving the reference. This can be a worry which can be reduced, in relation to most claims, by including a disclaimer at the end of the reference limiting the liability of the reference provider.
• Even with a disclaimer, employers are sometimes worried about saying too much. This has led to a trend of bland references being provided where only very basic information about an employee is provided such as someone’s job title and start and end dates relating to their employment. If such a reference is provided, it is good practice for the employer to state that its policy is only to provide these types of references, partly so as not to give the impression that they are hiding something.
• A reference will contain personal data relating to the employee. In a lot of circumstances, an employee will need to provide their consent to the party providing the reference using their data for that purpose. If consent is provided, the party providing the reference will need to be careful to ensure that it has not included anything in the reference that the employee would not have consented to.

For advice on employment matters, please contact David Nathan on 020 7822 2222 or at [email protected]