From a legal perspective, it has been recognised for some time that an employer’s duty of care extends to cover the provision of references. Case law has established that in order to discharge this duty of care, a reference provided by an employer in respect of a current or former employee must be true, accurate and fair. In a recent case, Jackson v Liverpool City Council [2011] EWCA Civ 1068, the Court of Appeal has given further consideration to this issue, addressing the question of what can be included within a reference when there are outstanding allegations in respect of a former employee.

In this case, Mr Jackson alleged that Liverpool City Council, his ex-employer, had been negligent in providing a reference which referred to performance-related allegations against him. Significantly, these allegations had not been investigated by the Council because Mr Jackson had left his employment before the specific issues in question had been identified.

It was initially held that despite the reference being true and accurate in its terms, the Council had breached its duty of care as it was not fair to refer to the allegations against Mr Jackson without an investigation having taken place.

The Court of Appeal took a different view and found no negligence on the part of the Council in terms of the reference it had provided. Accordingly, the appeal was allowed and the decision of the High Court was reversed. Of particular importance to the Court of Appeal’s decision was the fact that the Council had made clear to the recipient of the reference that the allegations in question had not been investigated and that no inference could be drawn either way. This led the Court to conclude that the Council could not be criticised in terms of the reference which it had given since, in addition to being true and accurate, it was also fair as it could not be said to be misleading in its terms.

Given the (no doubt expensive) litigation that ensued, this case highlights the continuing importance for employers of proceeding with some caution when providing a reference and of bearing in mind the duty of care which they owe. In particular, the case suggests that when providing a reference in respect of an employee against whom performance - or behaviour - related allegations have been made, while the nature of the allegations can be made known to the recipient of the reference, it must be clearly explained that these have not been investigated and that, as such, no inferences can be drawn.

Due to the consequences faced by an employee (and the potential liability of an employer) of a bad reference it is recommended that employers take advice in the event that they are including information in a reference which is likely to be considered contentious.