Human resources


by Jane Middleton
References are an important issue for employers and employees:

The employer

  • will normally want to see adequate references for a candidate before offering him/her a job
  • will undoubtedly be required to provide references for employees that have left or are leaving the company or for current employees for private reasons such as mortgage applications

The employee

  • needs a satisfactory reference from an old employer to help secure future employment
  • may require a reference for personal matters, such as to provide to a landlord or for a mortgage application
Employers should consider their legal obligations towards an employee/ex employee and to the recipient of the reference. Employees should ensure that an employer provides a true, accurate and fair summary of employment. The various rights and obligations are detailed below.

Does an employee have a right to a reference?

An employer is not obliged to provide a reference except where:
  • the employee's contract of employment states that he/she is entitled to a reference
  • the employer risks victimising the employee by not giving a reference (see Victimisation)
It is sometimes said that the employer has a moral obligation to provide a reference. Indeed, it is rare to refuse to provide a reference, given the consequences for the employee.

What should the employer provide?

Employers do not have to give a full and comprehensive reference. Given the potential liabilities involved, it is common for employers to give only a short statement confirming that the individual was employed, the dates of the employment and the employee's job title.
An employer may be asked to provide such a reference either in writing or over the phone. It is often more advisable to provide a reference in writing to reduce the scope for misinterpretation of what has been said.
When providing a more detailed statement than suggested above, consider including:
  • length and dates of service
  • positions held and key responsibilities
  • performance
  • punctuality and periods of absence (see Data Protection below)
  • integrity
  • relevant personal information
  • reasons for leaving

What are the respective rights and obligations?

An employer owes a duty of care to both the employee and the recipient for the content of a reference. The employer must provide a true, accurate and fair reference.
If an employer fails to take care in providing a reference, the employee or the recipient may be able to bring a claim in negligence for any damage suffered as a result.
To bring such a claim an employee will have to show that the reference is misleading, is likely to have an affect on a reasonable recipient and that the employer was negligent in providing it.
If an employer fails to provide a fair and reasonable reference during employment, the employee can resign and claim constructive dismissal.
An employer must only give information that it believes to be correct and this must be provided without malice.
If incorrect information is given with malice, an employee may be able to bring a claim for libel against the provider of the reference.
Data Protection
The Data Protection Act 1998 gives an individual various rights relating to data held about him/her, including access to the data and the requirement to give consent before it is passed to a third party or outside the European Union (EU).
An employer must, on request, provide an employee with references that it holds and which have been supplied by a third party or concern on employment related matters (see Rights). Before providing such information, any details identifying the third party should be removed. Where it is still possible to identify the third party after the removal of identifying names (as is likely with a reference) the employer should attempt to gain consent from the third party before disclosing the information.
An employer should gain consent from the employee before disclosing sensitive personal information in a reference. This would include sickness details or any information regarding race.
An employee may request disclosure of references received from a third party, but references given by a current employer are exempt from the usual data protection rights. This is the case where the reference relates to jobs, education placements or the provision of services by an employee.

Are there any other issues to consider?

A statement made in a reference is usually protected by "qualified privilege" if made in good faith and without malice because the current/ex employer and the prospective employer have a common interest in the content. This means that the parties must keep the reference confidential. If, however, the reference is passed to a third party then this confidentiality is lost. Accordingly, all references should be marked private and confidential so that all parties are aware of the confidential nature of the information.
Employers usually wish to include disclaimers in a reference to exclude liability for errors, omissions or inaccuracies in the information provided and for any loss or damage resulting thereof. Whilst such disclaimers can always be included, they will only offer protection to the employer if they are reasonable. The following rules generally apply:
  • An employer cannot exclude liability for errors or omissions in information provided, that would normally be within the knowledge of an employer.
  • An employer can exclude liability for errors or omissions when giving an opinion (i.e. stating whether the employee is suitable for a particular role).
  • An employer can qualify the reference by giving details of the writer's degree of knowledge of the employee.
Disputes, complaints and alleged misconduct
Employers often question whether they should refer to any alleged misconduct on the part of the employee during his/her employment. If there has been no investigation and/or conclusion of the matter then it would be unwise to comment on the alleged misconduct in the reference. Before doing so, an employer should have grounds for belief that misconduct has occurred, have carried out an investigation and have a genuine belief of the individual's guilt. Otherwise, the employee may have a claim for negligence and/or libel.
Occasionally, where there has been a dispute regarding the termination of employment and the employee has threatened to bring a claim then both employer and employee may consider entering into a compromise agreement in settlement of any potential claims. In these circumstances, an employee should always encourage the employer to provide a satisfactory reference as part of the agreement. It is best to agree the form of the reference in advance. An employer should consider the importance of providing a reference in such circumstances because this can be a powerful negotiating tool given that there is no obligation to provide a reference and a reference is of great value to the individual.
An employer should also be aware that if it has previously provided a good reference this could have an impact on a later attempt to justify a dismissal on the basis of performance or conduct. An employee could use such a reference as evidence to support a claim for unfair dismissal. Much will depend on the circumstances.
If an employer chooses not to provide a reference or provides an inaccurate reference for an employee who has made a complaint under the legislation governing sex discrimination or has raised a grievance regarding alleged sex discrimination, such action/inaction could constitute 'victimisation' of the employee. This could result in liability for damages to the employee for a breach of the obligations placed upon the employer by virtue of the Sex Discrimination Act 1975. The same liability could arise in relation to any complaint or grievance raised regarding race discrimination. As such, it is good practice to provide a fair reference where complaints have been raised in relation to sex or race.

In summary, an employer does not:

  • have to give a reference unless the employee has a contractual entitlement to one
  • have to give a full and comprehensive reference

An employer must

  • provide a true, accurate and fair reference and information should not be provided in malice
  • not comment on alleged misconduct where there has been no proper investigation
  • not refuse to provide a reference or provide an inaccurate reference where a complaint has been made concerning sex/race discrimination
  • not provide sensitive personal information in a reference or provide a reference outside the EU without consent

An employer should

  • limit a reference, where possible, to a statement of the facts of employment and should provide this in writing
  • adopt a policy stating that it only provides short factual references. Any recipient of such a reference should be made aware of the policy
  • mark all references "private and confidential"
  • qualify the reference by stating the degree of knowledge that it has of the employee (but other disclaimers will generally only be effective in relation to opinions and where reasonable)
  • keep written records of matters relating to employee's employment because such documentation may become the subject of a reference and may be important evidence where a claim is brought for negligence or libel
  • should consider discussing the reference with the employee first where it feels that it has no option but to mention information that could be viewed as poor by a potential employer (this gives the employee the chance to seek another referee)
  • maintain records of all references given and copies of the information on which they where based

An employee can

  • request copies of references provided by third parties or for non employment related purposes
  • consider incorporating a reference as part of a compromise agreement
  • bring a claim for negligence and/or libel where a reference has been prepared negligently or produced with malice
  • resign and claim constructive dismissal if an employer fails to give a fair reference during employment
Jane Middleton is an employment lawyer at Berwin Leighton Paisner,