Employment References: Obligations, Assumptions and Expectations
29 March 2019
A reference from a former employer forms an integral part of the recruitment procedure. Most employers, after completing the interview process and making a decision, will make a job offer conditional on the receipt of one or more references. So a new employer will have an expectation to receive a reference and a former employer will have an assumed obligation to provide one.
People are under the assumption that former employers have to provide a reference. They do not, except in the financial services industry and other specialised industries. For most normal jobs, an employer is not compelled to provide a reference and can refuse if they wish. However, if they do decide to give a reference then they owe a duty to the new employer and to their former employee to provide a reference that is 'fair, truthful and accurate'.
In addition to being under the assumption that an employer has to provide a reference, there is also the assumption that they cannot provide a negative reference. Whilst it may not be advisable to provide a negative reference, as long as it is fair, truthful and accurate, it can be provided. The problem is that determining what is a fair reference is subjective. So if you, as a former employer, give what you consider to be a fair reference, which happens to include negative comments, then this may result in the new employer withdrawing the job offer. If that occurs, then your former employee may look to bring a claim against you for loss of earnings.
The obvious response to avoid claims is to always give a positive reference, however, as a former employer you have to remember that you owe a duty to both parties. So let's say you give a positive reference which is not accurate and the new employer hires your former employee because of that reference. When the employee fails to live up to your positive reference, the new employer may look to claim damages from you for giving an inaccurate reference. As you have a duty to both parties, giving a reference which is fair, truthful and accurate is very difficult.
Another point to consider is what should be included in a reference. Some employers will have a standard form that they send to candidates’ former employers which they will ask them to complete. This is obviously beneficial to the new employer as it allows them to dictate what questions they want to ask to gain the specific information they are seeking. The difficulty with answering a number of questions, as the former employer, is that the more information you provide the more likely it is that you state something which is deemed to be inaccurate or unfair by one of the parties. So by completing a set form, you are opening yourself up to the possibility of a claim from either side.
The safest approach to take, as a former employer, upon receiving a request for a reference is to provide a factual reference only. This means ignoring any reference form and simply providing:
Dates of employment
This information is not contentious so by providing this only, you are protecting yourself from claims. If you do decide to give a factual reference only for employees but give a more detailed reference to preferred individuals, then you could be accused of unlawful treatment as you are treating some employees better than others. Therefore, if you do decide this approach going forward, you need to be consistent. Moreover, when you provide the reference you should make it clear that for all employees your policy regarding references is to only ever give a factual reference. This will ensure that the new employer does not read anything negative into the fact that you have only provided basic information.
If you would like advice on references, please contact our employment team.
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