Should I provide an outgoing employee with a reference?

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There is no legal requirement for an employer to give an outgoing employee a reference, unless they are in a regulated industry.

A regulated industry may include the financial services, banking or the care industry.

Whilst a contractual right to a reference is unlikely, an employee may try and negotiate the provision of a reference upon terminating their employment under a settlement agreement.

When providing a reference care needs to be taken

When an employer does decide to provide a reference for an employee or former employee, care needs to be taken. There are a number of potential claims that an employer may face if they get it wrong.

Should the employer provide an unfair, untrue or inaccurate reference, or be inconsistent in its approach to giving a reference, it may lead to claims of discrimination, defamation, negligent misstatement and/or breach of contract.

Accuracy in references is essential

Following the House of Lords’ decision in Spring v Guardian Assurance [1995], an employer who provides a reference for an outgoing employee is under a duty to take reasonable care in making the reference. They will be liable to the employee in negligence if the reference is inaccurate and the employee suffers loss as a result. Additionally, the reference provided should be balanced and fair. As well as the author referring to positive attributes of the employee they must also disclose, should they exist, any negative aspects of the employee’s performance.

As a consequence of this many employers now choose to provide a prospective employer with a purely factual reference, simply providing details of:

  1.  The employee’s start date;
  2. The employee’s end date;
  3. Their job title;
  4. A description of the main duties of the employee;

References and the Data Protection Act 1998

The Data Protection Act gives an individual various rights relating to data held about him or 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). Since producing a reference constitutes the processing of personal data it must therefore be carried out in accordance with the DPA. Any attempt to provide information in a reference about an employee’s sickness record or reasons for absence, for example, must be approached with great care. Such information is sensitive personal data under the DPA. Employers can only generally disclose such sensitive data where the employee has provided explicit consent.

Potential discrimination in deciding not to provide a reference

Whilst an employer must ensure the content of a reference is not discriminatory, care must also be taken to ensure that an employer’s decision not to provide a reference does not give rise to claims of discrimination or victimisation. Former employees as well as employees have the right not to be discriminated against under the Equality Act 2010.

Are you required to provide an employee with a copy of a reference you have written?

No. The content of a reference constitutes personal data and as such could become the subject of a Data Subject Access Request. Yet there is an exemption under the DPA which states that individuals do not have the right to receive a copy of a reference from the organisation which has given it.  However, it would be reasonable to provide a copy of the reference to the employee requesting it, if the reference is wholly or largely factual in nature.

Are you required to provide an employee with a copy of a reference you have received?

Yes.  Individuals have a right to request a copy of the reference from the organisation receiving the reference, subject to certain exemptions, and a copy of it would need to be provided to them.

What should an employer do?

  • Where possible provide a simple factual reference stating employment start and end date, job title and main duties.
  • Avoid providing subjective opinions or any comment on character, attendance, performance, sickness absence or disciplinary proceedings.
  • Have in place a policy stating the employer only provides short factual references, making recipients aware of the policy.
  • Ensure the policy is consistently followed and that only certain personnel in the organisation can sign off references.
  • Mark all references ‘private and confidential’.
  • State in a job offer or contract of employment that employment is conditional upon receipt of satisfactory references and should an unsatisfactory reference be received then the job offer may be withdrawn or employment terminated.

Contact Farnworth Rose

If you are unsure of where you stand in relation to providing a reference for an existing employee, contact our team of expert employment law solicitors today. Call 01282 695 400 to speak directly to one of our friendly specialist Employment Law Solicitors, or simply complete the online contact form and we will be in touch with you as soon as possible.