Am I under a legal obligation to provide a reference for a current or former employee?

Generally speaking, there is no legal duty to provide employee references. However, there are some exceptions to this:

• In some regulated industries, like financial services, there is a requirement to provide a reference and this may have to contain specific information;
• If there is an express provision in the employee’s employment contract that the employee is entitled to a reference, then a failure to provide one will be a breach of contract;
• It is possible for a term to be implied into the employment contract that a reference should be provided, for example where an employer has, through custom and practice, consistently provided references;
• If someone with authority within an organisation has told the employee that they will be provided with a reference;
• If there is some other agreement in place which stipulates that the employee will receive a reference, such as a compromise agreement.

Even where there is no legal obligation upon an employer to provide a reference, in some circumstances it may be sensible to do so. For example, if an employee has brought or is threatening to bring discrimination proceedings. In such circumstances, if an employer refuses to give a reference, but would normally provide one, the employee could try to bring a claim for victimisation.

What information should I put in the reference?

Unless you operate in a regulated industry where there are particular requirements relating to references or common practice that should be followed, there is no standard format for an employee reference and no minimum content that one must contain. However, employers must take care to ensure that the contents are true, accurate and fair, and do not provide a misleading impression. The reference should also not contain any irrelevant information, such as details of spent convictions.

Employers are entitled to set their own policy regarding the content of their references. For example, it is common for employers to have a policy limiting references to the dates of employment and the job title of the employee.

What happens if the contents of a reference are inaccurate?

You could find yourself on the receiving end of a claim, either from the employee or the third party who has relied on the reference to its detriment.

You should bear in mind that under the Data Protection Act 1998 an employee may be entitled to see his or her reference if they make a data subject access request (see below). An employer has a duty to take reasonable care when preparing a reference for an employee or ex-employee, and if the subject of the reference considers that it is inaccurate and that they have suffered a loss as a result, he or she could sue the employer in negligence.

To bring a successful claim, the employee must be able to prove that:

• The contents of the reference were inaccurate or misleading due to the failure of the employer to take reasonable care;
• Because of this, it was likely to have a detrimental effect when read by a reasonable recipient; and
• The employee suffered loss as a result (for example, if a job offer was withdrawn).

If the individual is still in the employment of the referee and considers that an unfair or inaccurate reference has been given they may have a claim for constructive dismissal (for breach of the implied term of mutual trust and confidence). They may, in addition or in the alternative, try to bring a claim for discrimination if they consider that the inaccurate reference constitutes direct discrimination against them on one of the unlawful grounds (i.e. sex, race, disability, sexual orientation, marital status, religion or belief, or, from October 2006, age).

In addition to this, any third party employer who relies upon a misleading or inaccurate reference to its detriment may sue the reference provider for any loss which it suffers as a result. For example, if the employee is provided with a glowing reference but subsequently turns out to be totally incapable of the things stated therein, the third party employer may sue the referee for losses such as the salary it has paid the employee. This is because the referee has a duty when providing a reference to make sure that it is not misleading.

Reference providers should also be wary of providing a positive reference in the instance where they have dismissed an employee for under-performance as this could be used as evidence against the ex-employer in any proceedings for unfair dismissal.

What if I offer a job subject to satisfactory references and the previous employer refuses to provide one?

Most employers make a job offer expressly conditional upon receipt of satisfactory references. The offer should also stipulate that it is for the prospective employer to determine what is “satisfactory”. Where a named referee of the employee refuses to provide a reference, you have several options open to you:

• You could decide that because you have not received a satisfactory reference then the offer of employment will be withdrawn. You would need to pay the employee in respect of any work undertaken but would not need to give them notice to terminate the contract as the job offer was conditional on satisfactory references.
• You could alternatively ask for the employee to name alternative, suitable referees.
• You may decide that you have sufficient information about the employee to confirm their job offer without the need for such a reference.

The approach you decide to take will probably depend upon the reasons why the ex-employer has refused to provide a reference (if known) and any other information you have about the employee.

If you waive your right to references and confirm the job offer then you will be unable to withdraw this at a later stage. If you subsequently wanted to end the employment you would have to do so in accordance with the statutory minimum notice periods or, if applicable, any longer notice period stipulated in the employee’s contract of employment.

What happens if an employee or an ex-employee asks for a copy of any reference I have given about them?

Where you have supplied a reference to a prospective new employer in confidence, you are not obliged to provide a copy of this to the employee under the Data Protection Act 1998. However, there would be little reason to withhold such information if the reference is mostly factual or if it contains information otherwise known to the employee.

Click here for full guidance about the disclosure of references to employees under the Data Protection Act 1998.