REFERENCES – WHAT YOU NEED TO KNOW
References are commonly requested as a condition of employment during the recruitment process but are they worth
the paper they are written on? What are the dangers of providing, or not providing, a reference when asked and what
can you do following receipt of an unsatisfactory reference?
Does a reference have to be given?
In the absence of any express contractual obligation, an employee does not have any right to receive a reference. It is
also unlikely that any express contractual obligation will exist unless an employee has secured the provision of a
reference under a Settlement Agreement (or otherwise) following an exit from their former employment or a reference
has been agreed as part of the terms of any settlement following the issuing of proceedings against their former
employer. As such, in many cases there is no express contractual obligation for an employer to provide a reference
when requested to do so, and it is unlikely that a failure to provide a reference (where there is no express contractual
obligation to do so), will give rise to any liability under common law negligence or otherwise providing the employer
adopts a consistent approach.
Providing References – or not as the case may be
Employers do however have to be careful when providing references about their former employees. There are a
number of potential claims that an employer may face as a result of giving unfair, untrue or inaccurate references, or
being inconsistent in their approach to giving references, and these include potential claims of discrimination,
defamation, malicious falsehood, negligence misstatement and/or breach of contract.
Discrimination claims
In relation to the first of these potential claims, employees have the right not to be discriminated against on the
grounds of a protected characteristic (such as age, race and disability) and they should not suffer any form of
detriment or victimisation as a result of doing a protected act, for example bringing proceedings against their former
employer under the Equality Act 2010. This protection extends to employees who are subject to discriminatory acts
which take place after the employment relationship has ended and where the discrimination or victimisation arises out
of or is closely connected to the former employment relationship. Therefore care does need to be taken to ensure that
an employer’s decision not to provide a reference is not because the former employee has brought proceedings
against them under the Equality Act 2010 or is otherwise discriminatory. Any content of a reference should also not be
discriminatory.
Ensure accuracy
Care should therefore be taken in all cases when an employer does choose to provide a reference, to ensure that only
accurate references are given. In the case of Spring v Guardian Assurance, the House of Lords held that the common
law of negligence applies not only when an inaccurate reference has been given, but also where an employer
carelessly provides an inaccurate reference even if it was given in good faith. Additionally, the House of Lords held
that there is an equivalent implied contractual term that, where a reference is given, it is required to be given with
reasonable care. It is for this reason that many employers when giving references will give very factual references
only, and ones that are specifically limited to dates of employment and position(s) held.
Data Protection considerations
Further still where a decision has been made to provide a reference, or where there is a contractual
obligation on the employer to provide a reference, employers should be very careful to ensure that the form of
reference given, whether agreed or otherwise, is fair and balanced. Where a specific form of reference has
been agreed, only this and nothing more should be given. Failure to do so may result in not only a claim for
breach of contract and/or negligence, but may also result in a claim for damages under the Data Protection
Act 1998 (“DPA”) where that additional and unlawful disclosure of personal data has caused substantial
damage or distress to the individual about whom it relates unless the employer can demonstrate that it took
reasonable steps to prevent the disclosure of excessive information. Avoiding the disclosure of excessive
information or inaccurate information is also consistent with the third and fourth data protection principles
which state that personal data must be accurate and not excessive. Employers should remember that
producing a reference will constitute the processing of personal data and must therefore be carried out in
accordance with all eight data protection principles.
The first data protection principle requires that personal data must be processed fairly and lawfully. In the recent case
of AB v A Chief Constable, the High Court held that a police force should not be permitted to send a further reference
to a new employer of one of its former senior officers, advising the new employer of the officer's extended absence
record and of unproven disciplinary allegations outstanding against him at the time of his departure. While the Court
held that the police force would ordinarily have a public law duty to provide information concerning the disciplinary
matter to the new employer in this case the officer had relied on an earlier undertaking given by a Senior Officer that
only a standard form reference would be provided to future employers. The officer in question therefore had a
legitimate expectation that the police force would act in a particular way and not give any reference beyond the
standard reference.
Whilst the Court accepted that there was a strong public interest in providing full and frank references, it held that the
officer had a legitimate expectation that outweighed the public interest in disclosure, and that the police force’s action
in disclosing the second reference was a breach of the first data protection principle and was therefore unfair and
unlawful.
Any attempt to provide information in a reference about an employee’s sickness record or reasons for absence must
also be approached with great care. Such information is sensitive personal data under the DPA, and employers can
only generally disclose such sensitive data where the employee has provided explicit consent.
Finally from a data protection perspective, employers should be aware when giving references, the content of a
reference will constitute the personal data of the individual about whom it relates. As such, it could become the subject
of a Data Subject Access Request and would be disclosed to the individual it relates to. Whilst there is an exemption
which states that individuals do not have the right to receive a copy of a reference from the organisation which has
given it, they do have a right to request a copy from the organisation receiving it and this would need to be provided
(subject to certain exemptions).
Disclaimers
When choosing to give limited factual references, many employers also opt to add a disclaimer to their reference
wording, to the effect that they will not accept any responsibility or liability for any loss or damage caused to the
addressee or any third party as a result of any reliance being placed upon the reference provided. The prospective
employer will often find it commonplace to receive references in this way, and such a disclaimer is usually effective to
prevent any liability arising on the part of the employer giving the reference since it would not be reasonable for the
recipient employer to claim a duty of care from the provider. However, to avoid liability to the subject of the reference,
the employer would need to get their prior agreement to a reference being given on this basis, which in most cases is
unlikely.
Receiving references
In the event that an employer receives an unsatisfactory reference, or the reference gives cause for concern regarding
the future employment of the subject of the reference, provided that the job offer or contract of employment states that
the employer may terminate in those circumstances the employer will have the required protection to terminate
immediately. Otherwise, the employer will need to give notice to terminate the contract of employment and will be
liable to pay the correct notice due under the job offer or contract of employment.
Top Tips
To conclude here are some useful tips in relation to the provision and receipt of references generally:
Don’t rely on the content of references alone as part of a recruitment process. Rely also on an
applicant’s completed application forms, interviews or tests to evaluate a potential member of staff.
Where you intend to seek a reference to verify any alleged work experience, seek at least one
reference from a former employer and make any job offer conditional on the reference being
satisfactory reserving the right to terminate immediately if, in your opinion, an unsatisfactory reference
is received.
Have a consistent policy in place with regard to the giving of references, to include the form and, in
particular, the type of information that that can (and cannot) be included within a company reference.
This should also state that only certain levels of management or personnel may sign off any reference
provided for an on behalf of the employer.
Ensure that references are not given about individuals who do not wish for a reference to be provided.
A requirement to check this should be incorporated into the policy referred to above.
Explain that it is company policy only to give short form, factual references and limited to dates of
employment and job role.
Avoid giving subjective views or any comment at all about the performance, attendance, sickness
absence, former disciplinary proceedings or character of the individual in the body of a reference.
Avoid providing any additional information that would not be anticipated by the subject matter of the
reference.
Avoid inaccurate or misleading statements.
Mark all references as being “Private and Confidential and for the addressee only”.
Any personal references agreed should not be drafted on company headed paper.
Please also note that if a person is carrying out certain prescribed functions for an organisation authorised by the
Financial Conduct Authority or the Prudential Regulation Authority, those persons must be approved and due diligence
has to be carried out into their relevant history to certify those persons as being fit and proper, taking into account their
honesty, integrity and reputation; their competence and capability; and their financial soundness.
Michael Briggs
Associate
T
M
E
03700 86 5066
07717 53 7543
michael.briggs@shoosmiths.co.uk
This Briefing Note is not legal advice and is intended to provide a brief summary and general guidance
only. It should not be used as a substitute for specific advice about your particular circumstances:
specialist advice should always be sought.