Imagine that you have an employee who is a poor performer and whose difficult behaviour has failed to win him any friends. When he resigns, you feel relieved... until his new employer asks you for a reference. If you tell the truth, his job offer might be withdrawn. If you sing his praises, you will mislead his new employer. What should you do? Here are some pointers from Anna West, employment lawyer at Travers Smith:
Can you refuse to give
a reference?
The general rule is that you are not legally obliged to provide a reference, although there are exceptions. You must supply a reference if there is a contractual commitment to provide one (a reference might have been agreed as part of an employment claim settlement). That said, providing references for some employees and not others could lead to discrimination claims. And if you refuse a reference for an employee who has alleged or brought a discrimination claim against you, this could amount to victimisation. The safest course is to have a clear policy and follow it consistently.
Are you allowed to say what you want?
You owe a duty both to the prospective new employer and the current or former employee to prepare the reference with 'reasonable skill and care'. If the reference is untrue, inaccurate or misleading, you could face negligence claims from the employee or from the prospective employer. An employee who wins a negligence claim will be awarded compensation for financial loss, which could be significant if the reference has meant he or she is unable to find another job at a similar level. As long as the reference you provide is a true, accurate and fair picture of the employee, you should avoid a successful negligence claim.
Does a negative reference amount to defamation?
Not as long as everything you have written is true to the best of your knowledge and belief. But remember that even if the reference is true, the employee could have a negligence claim if it is in any way misleading. For example, if customers had complained about the employee and the complaints were being investigated, it may be misleading to mention the complaints without also explaining that an investigation was in progress.
Is it safest to limit all our references to name, job title and employment dates?
Giving this type of basic reference has become an increasingly common practice in recent years, as a way of avoiding potential claims. Some employers add a statement that there is no reason to doubt the employee's honesty and integrity.
It is unlikely that the employee would have a successful claim as a result of a basic reference. But if by giving this type of reference you omit a serious matter (for example, that the employee was dismissed for gross misconduct) then this is likely to be misleading to a prospective employer who could have a claim for any loss arising as a result.
If you decide to give basic references only, you should follow this policy for all employees and probably make it clear on the reference that it is your policy to provide such references.
Should verbal references
be avoided?
Careless verbal remarks could lead to a potential claim. It is advisable to have a clear internal policy as to who may give references on your behalf. For example, some employers have a policy that only a basic reference can be given on the organisation's behalf, but that individual employees are free to give a personal reference, providing they make it clear that they are doing so in a personal capacity. If you do give a verbal reference, keep a detailed note of the conversation in case of any future dispute.
Would a disclaimer reduce
the risk of claims?
Some employers provide references with a disclaimer, stating that they are not responsible for any loss arising from reliance on the reference. This approach cannot be guaranteed to work. Disclaimers are only effective if they are reasonable in all the circumstances. A court may well consider it unreasonable for an employer to volunteer information that is within its knowledge, and then try to avoid being held accountable for it. You can certainly choose to put a disclaimer on your reference but you should be aware that it may not be effective.
Can our employee see the reference we have written?
Employees and former employees have a right to receive, on request, copies of any personal information you hold about them under the Data Protection Act, but special rules apply to references. You don't have to give current or former employees copies of references, but they are entitled to receive copies from their prospective new employers on request (whether or not they get the job). This also means that you have to disclose, if requested, references that you have received.

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