References - Do You Know The Rules?

It is often standard practice, and sensible, for a prospective employer to request a reference from a job applicant's most recent or current employer.

A reference can provide valuable information on a prospective employee’s suitability for the vacant role in terms of confirming the information already received as part of the recruitment process (such as dates of employment, roles previously performed and the reason for leaving) and providing additional details such as the former employer’s views on the applicant’s performance, honesty and any disciplinary issues. Referees might also comment on attendance, time keeping and any other matters they consider to be relevant.

But what are the risks of providing a reference (whether basic or detailed) or refusing to do so?

DOES A REFERENCE HAVE TO BE GIVEN?

Generally speaking, a former or current employer is not under any obligation to provide an employee or former employee with a reference. There are exceptions to this – for instance if there is an express or implied contractual obligation to do so (which is unusual) or where the individual works in certain industries, such as those regulated by the Financial Conduct Authority.

Therefore, a refusal to provide a reference is not unlawful in itself (unless the exceptions apply). However, where the employer’s usual practice is to provide employees with references, but declines in relation to a particular individual, then that could give rise to a costly discrimination claim if the refusal to provide a reference is on the basis of a “protected characteristic” (as defined by the Equality Act 2010) and the refusal leads to the applicant not being offered the role or having a conditional offer withdrawn. The nine “protected characteristics” under the Equality Act 2010 are: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

Alternatively, if the applicant has previously brought a claim for discrimination or made an allegation of discrimination against the former employer, as a result of which it declines to provide a reference, the applicant will have a claim for victimisation.

DUTIES OF CARE

Perhaps unsurprisingly, a referee owes a duty of care not only to the subject of the reference (i.e. the applicant) but also to the recipient.

This means that the reference must be true, accurate and fair. Crucially, it must also not be misleading (and that pertains to what is left out as well as that which is included). This can cause headaches for referees when the subject’s record is less than exemplary or disciplinary proceedings have not been concluded.

Where a negligent reference is provided, both the subject and recipient of the reference could bring a claim for negligent misstatement against the referee. In limited circumstances, the subject might also have a defamation claim.

CONSTRUCTIVE DISMISSAL

Where the applicant is still employed by the referee, there is also the possibility of a constructive dismissal claim arising out of a breach of the implied term of trust and confidence.

WHAT TO DO?

It is worth employers giving some thought, in advance, as to how to handle references and to have a policy dealing with:

-Whether references will be provided;

-Which employees in the organisation can provide a reference;

-What format (oral, written, standard) should the reference take; and

-What can be included.

In addition, referees should ensure that any statements made are based on facts and that care is taken to ensure that any data protection issues arising from the reference request are handled correctly.

It is also best practice for the prospective employer to ensure that any offer of employment is conditional on satisfactory references being received and to make effective use of probationary periods once the employment starts.