References and Recruitment

An ex-employer is not legally required to provide outgoing staff a reference unless contractually obliged to do so, or due to the employee being part of a regulated sector in which the governing body requires such references to be provided. If a reference is provided it must not be misleading. Data protection exemption applies to the provision of references.

Provision of References
There is no general or statutory obligation on an employer to give a reference for an ex-employee.

Contractual obligations are often included in settlement agreements whereby the express wording is agreed.

Regulated Industry
In some industries, particular those heavily regulated, a Trade association or governing body rules (such as FSA in banking and insurance roles) may require member companies to take up and to give references for employees. The FSA also provides rules governing the content of references for former employees which a "regulated employer" must supply on request to any other regulated employer.

Discrimination and Victimisation
Employers often get into trouble when they start providing references for some workers but not for others. To counter allegations of unlawful discrimination or victimisation, employers should endeavour to treat individuals consistently regardless of any characteristics. To minimise risk of allegations, a consistent policy should be maintained – references always given or not, agree a format etc. This can be clarified in a recruitment policy in a staff handbook.

Content of Reference
If the referee does provide a reference, then it owes the subject a duty to take reasonable care to ensure the information it contains is true, accurate and fair, and does not give a misleading impression.

Consequences of Inaccurate Reference
An ex-employee may be able to claim damages or compensation from his/her former employer for libel or slander if statements contained within the reference are untrue and misrepresent the facts. Further, if a referee deliberately or negligently misleads the potential new employer into thinking the employee is better than he really is and the new employer can show he has suffered loss as a result of relying on the reference, the new employer can claim damages. 

In order to ensure that a reference is not misleading, it is generally accepted that references should be limited in content and should simply include:

  • start and end dates
  • job title, and
  • brief overview of duties.

Corporate Reference v Personal Reference
The employer will be legally responsible for the contents of a corporate reference because it is provided on its behalf.

A personal reference is one given by an individual in a personal capacity. Often outgoing staff ask there line manager to provide a personal reference – this may refer to work done for a particular employer, but it is not given on behalf of the employer and the employer cannot be held vicariously responsible for any damage suffered as a result of its provision.

Disclaimer: This article does not contain a full statement of the law and it does not constitute legal advice. Please contact the Employment Law Team on 020 3743 0600 if you have any questions about the information set out above.

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