References are often requested during the recruitment process but are they worth the paper they are written on? We look at the dangers of providing, or not providing, a reference and what employers can do if they receive an unsatisfactory reference.
Does a reference have to be given?
Unless there are contractual terms to the contrary, an employee does not have a right to receive a reference. It is unlikely that any express contractual obligation will exist unless either the employee has negotiated the provision of a reference under a settlement agreement on leaving employment or a reference has been agreed as part of the terms of settlement of a tribunal claim.
However, where employers do provide references about their former employees care needs to be taken. There are a number of potential claims that an employer may face as a result of giving unfair, untrue or inaccurate references, or by being inconsistent in their approach to giving references, and these include discrimination, defamation, negligent misstatement and breach of contract.
Employees (and ex-employees) have the right not to be discriminated against on the grounds of a protected characteristic (such as age, race and disability) and should not suffer any form of detriment or victimisation as a result of doing a protected act (such as bringing proceedings against their former employer under the Equality Act 2010). Care needs to be taken to ensure that an employer's decision not to provide a reference does not give rise to claims of discrimination or victimisation. On the other hand, where a reference is given its content must not be discriminatory.
Employers also need to ensure that only accurate references are given. In Spring v Guardian Assurance, the House of Lords held that the common law of negligence applies not only when an inaccurate reference has been given, but also where an employer carelessly provides an inaccurate reference even if it was given in good faith. Additionally, where a reference is given, it is required to be given with reasonable care and be balanced and fair. It is for this reason that many employers choose only to give factual references limited to dates of employment and position(s) held.
Data Protection considerations
Where a specific form of reference has been agreed, only this and nothing more should be given. Failure to do so may result in a claim for breach of contract and/or negligence and could also result in a claim for damages under the Data Protection Act 1998 ("DPA") since producing a reference will constitute the processing of personal data and must therefore be carried out in accordance with all eight data protection principles.
In the recent case of AB v A Chief Constable, the High Court held that a police force should not have sent a further reference to a new employer of one of its former senior officers, advising the new employer of the officer's extended absence record and of unproven disciplinary allegations outstanding against him at the time of his departure. While the Court held that the police force would ordinarily have a public law duty to provide information concerning the disciplinary matter to the new employer in this case the officer had relied on an earlier undertaking that only a standard form reference would be provided. The officer in question therefore had a legitimate expectation that the police force would act in a particular way and not give any reference beyond the standard reference. This outweighed the public interest in disclosure and the police force's action in disclosing the second reference was a breach of the first data protection principle and was therefore unfair and unlawful.
Any attempt to provide information in a reference about an employee's sickness record or reasons for absence must also be approached with great care. Such information is sensitive personal data under the DPA, and employers can only generally disclose such sensitive data where the employee has provided explicit consent.
Employers should also be aware that the content of a reference will constitute personal data and as such could become the subject of a Data Subject Access Request. Whilst there is an exemption which states that individuals do not have the right to receive a copy of a reference from the organisation which has given it, they do have a right to request a copy from the organisation receiving it and this would need to be provided (subject to certain exemptions).
In the event that an employer receives an unsatisfactory reference then provided that the job offer or contract of employment states that the employer may terminate in such circumstances the employer will be able to terminate immediately. Otherwise, the employer will need to give notice to terminate the contract of employment.
Top tips for employers
- don't rely on the content of references alone as part of a recruitment process - also consider an applicant's completed application forms, interviews or tests to evaluate a potential member of staff
- where you intend to seek a reference make any job offer conditional on the reference being satisfactory reserving the right to terminate immediately if, in your opinion, an unsatisfactory reference is received
- have a consistent policy in place with regard to the giving of references, to include the form and, in particular, the type of information that can (and cannot) be included within a company reference. This should also state that only certain levels of management or personnel may sign off any reference provided for or on behalf of the employer
- explain to employees that it is company policy only to give short form, factual references and limited to dates of employment and job role
- avoid giving subjective views or any comment at all about the performance, attendance, sickness absence, former disciplinary proceedings or character of the individual in a reference
- avoid providing any additional information that would not be anticipated by the subject matter of the reference and avoid inaccurate or misleading statements
- mark all references as being 'Private and Confidential and for the addressee only'
- any personal references agreed should not be drafted on company headed paper.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.