We are often asked for advice about what employers can or, more importantly, can’t say when providing references for staff.  Here are the most frequently asked questions on this tricky topic.

Q1: Do employers have to provide references?

Q2: Can we be sued for something that we say in a reference?

Q3: Is it better to stick with factual information about the employee rather than provide an opinion about their suitability for the role?

Q4: Who should give a reference?

Q5: Our members of staff are sometimes asked to provide a personal reference.  Does this expose us to risk?

Q6: Is it sensible to mark references for the addressee only and insist that they are not passed on to the employee?

Q7: What information should be contained in a reference?

Q8: Will a disclaimer protect our business against any claims?

Q9: We have agreed to provide a reference as part of an exit package to a member of staff.  Can we change the content?

Q1: Do employers have to provide references?

Generally there is no legal obligation on an employer to provide a reference for an employee or ex-employee and you are entitled to refuse to provide one.  However, unless you have a policy of not providing a reference for anyone, this is rarely a sensible option.  In some sectors, for example financial services, employees may have a duty to provide information to the regulator when an employee leaves.

Q2: Can we be sued for something that we say in a reference?

Yes. If you do provide a reference, you owe two duties: the first of these is owed to both the individual and the prospective employer and requires you to take reasonable care to ensure the information contained in the reference is true, accurate and fair.  The other is owed to the individual alone and that requires you not to make defamatory statements about him or her. 

This means that the reference should be factually correct and  not compiled maliciously or negligently, so that it gives an impression which is either too negative or misleadingly positive.  So if the individual was a poor performer or regularly turned up for work late, and you have evidence of this, you can say so.  Similarly, if the employee was sacked for gross misconduct, if you provide a reason for dismissal you must not invent another reason, such as redundancy in a misguided attempt to help the employee to get another job or to obtain state benefits.

If you do give an inaccurate reference, your former employee could bring a claim for damages in negligence for lost earnings if s/he can show that it was your reference (as opposed to, say, her/his own lack of skills or poor interview performance) which costs him the job.  Also, the prospective employer can claim against you for its wasted recruitment costs and damages, if it can show that without your misleadingly positive reference it would not have hired your former employee.

Q3: Is it better to stick with factual information about the employee rather than provide an opinion about their suitability for the role?

With these risks in mind, many employers prefer to provide brief references which say very little beyond setting out the employee’s job title, role, salary and dates of employment etc.  Although the prospective employer can check this information against that provided by the candidate, references such as these are not helpful as they do not tell the prospective employer what the candidate is really like.  Often a prospective employer in receipt of a noncommittal reference will attempt to obtain more information by speaking to the candidate’s former employer.   If your policy is to provide factual information only your staff should not provide any additional information verbally.

This is because any information given verbally – even if it is stated to be “off the record” is subject to the same duties.  This is often misunderstood.  It is not possible to have a conversation “off the record” or on a “without prejudice” basis unless there is a legal dispute between you and the organisation you provided the reference to.  Badging a conversation in this way will not therefore mean that it cannot be referred to at a later date.

Q4: Who should give a reference?

It is worthwhile developing a policy for dealing with references, including identifying who has authority to provide a reference on behalf of your business.  This will help you to respond to requests consistently and should avoid allegations by disgruntled former employees that you have acted unfairly or unlawfully. 

For example, if you normally provide brief, factual references, but on one occasion choose to provide detailed information about the candidate’s lamentable performance, the key question will be why you have done so.   If there is a suspicion that you are doing so because of the candidate’s sex, race, age (or other protected characteristic), or because he or she made a previous discrimination complaint then you are likely to face a discrimination or victimisation claim.

Q5: Our members of staff are sometimes asked to provide a personal reference.  Does this expose us to risk?

Your policy should set out whether staff members can provide personal references for other members of staff and set guidelines if you do.  If you do permit these, the individual providing the reference must make it clear that the reference is a personal one and is not written for or on behalf of your business.  The individual providing the reference should use their own paper or email address and NOT anything linked to the business. 

Q6: Is it sensible to mark references for the addressee only and insist that they are not passed on to the employee?

The information contained in a reference will constitute personal data (and perhaps sensitive data) so you must take steps to make sure that it is properly addressed and marked private and confidential. 

It is also worth remembering that even if you expressly state that your reference is given in confidence and must not be disclosed to anyone else (including your former employee), he or she may still be able to see the reference you have written.  You are not obliged to give a copy of the reference to your former employee, but he or she can ask the recipient for it under the Data Protection Act and ultimately you have no control over whether a copy is provided.  Plus, if the individual brings a claim, a court or tribunal may order that the reference is disclosed.  It is therefore safer to assume that the subject will ultimately get to see any reference you write.

Q7: What information should be contained in a reference?

We usually advise employers to provide only brief, factual details and include a statement that its policy is to only provide basic details and that  should not be taken to be disparaging of the employee in any way, and refuse to be drawn further.

Some businesses send out requests for references in the form of a pre-printed questionnaire.  You are not required to use this form or to answer all questions set out in the questionnaire.   

Q8: Will a disclaimer protect our business against any claims?

A disclaimer may assist with defending claims made by the recipient of the reference against your business but only to the extent that it is reasonable.   In view of the importance of the reference to the employee and the fact that the information being provided is within the employer's knowledge, a court may not be sympathetic to an employer who seeks to hide behind a disclaimer.

Public sector employers should also bear in mind that their public duties to act with honesty and integrity cannot be circumvented by using a disclaimer in a reference

Q9: We have agreed to provide a reference as part of an exit package to a member of staff.  Can we change the content?

If you agree a reference as part of a settlement agreement you must not deviate from it unless you discover new evidence that indicates that the information contained in the reference is no longer correct.  Most settlement agreements usually include wording which allows the giver of the reference to make changes in these circumstances or to refuse to provide a reference.  If you intend to change an agreed reference you will normally be expected to notify the employee first.