Aug 11

How to avoid the pitfalls of giving a reference…..


Writing a reference for an employee’s new employer can land you in legal hot water – there are rights and obligations you need to consider when providing a reference which will ensure that you stay safe but are fair.

What can go wrong?
If you give a reference, you have a duty to the employee and the new employer to take reasonable care to ensure it is true, accurate and fair and that it is not misleading.

If you provide a bad reference that you can’t substantiate, you run the risk of your employee suing you for damages if they didn’t get the job, or suffered some other financial loss, because of it. In a worst case scenario, they could even bring an action against you for defamation or discrimination.

The new employer could also claim damages against you if you give a glowing reference for an employee who has not in fact been satisfactory, and that person goes on to perform badly in their new job.


1. Giving no references
One option is to refuse, as a matter of policy, to give references for any employee but this is unusual and failure to give a reference, without any explanation, can also imply that you have had problems with the employee. This could give rise to claims that you have discriminated against them and they could also argue that you have broken the term of mutual trust and confidence that is implied in every employee’s contract of employment. So, if you have a policy of not giving references, respond to each request for a reference with a specific statement that it is not your policy to give them, to avoid misunderstandings.

2. Giving the bare facts
Many employers provide only bare facts – the position(s) held by the employee, salary and other benefits, sickness record and commencement and termination dates. State that this is your policy on the reference you give, so that the new employer does not read anything into the fact that you have not provided fuller details.

3. Giving a full reference
Most full references include the bare facts, plus key responsibilities, an assessment of the employee’s performance and views on their personal qualities relevant to the positions held.

The duty to take care to be true, accurate and fair, and not to be misleading, means you should avoid:
• Failing to respond to specific questions in a request for a reference without explaining why.
• Omitting key information that a new employer would expect you to disclose.
• Organising the information in a way that would give a reasonable person a wrong inference or impression of the employee.
• Saying that an employee is suitable for the role advertised – you do not know what the job entails. If you must say this, qualify it by saying it is your opinion only.
• If an employee’s performance has been poor or they were dismissed for serious misconduct, refer specifically to the problems experienced with the employee (as well as any positive points, in the interest of balance). It is dangerous to leave them out if they are material. A bad reference is permissible, provided that it is not malicious and that you took reasonable care to ensure that the information is true – for example, by investigating any matter giving rise to the bad reference.
• If an employee has been dismissed, ensure that the statements made in the reference tally with the reasons given for the dismissal.
• If the employee is senior enough, agreeing the wording of their reference with them may be part of a settlement agreement.

Avoid inconsistency – giving a reference in one case and not another, or giving only a factual reference to one employee and a full reference to another – as this could give rise to a claim of discrimination by a disgruntled employee. It is best to establish a policy that states whether you will give references or not and, if you do, who may give them and what they should contain.

Disclosure of the reference
If your ex-employee asks to see the reference, you do not have to disclose it. However, the new employer has to if you have consented to its disclosure it is ‘reasonable in all the circumstances’ that the new employer should do so.

Take advice before giving any reference if it is important to you that your employee should not see it, or parts of it that you consider confidential – at the very least you should make it clear to the new employer that you do not consent to disclosure of the reference, or the confidential parts of it, to the employee.

If the new employer is obliged to disclose the reference, generally they should take care not to disclose any part of it that relates to another person.

Disclaimers excluding liability for the accuracy of the reference are of limited effect – they will protect you only if they are reasonable. Attempts to exclude liability for a statement that can reasonably be expected to be something an employer should know, is likely to fail. That said, you may wish to include a disclaimer in your references as a ‘belt and braces’ measure.

Third parties
All references should be marked ‘private and confidential’, to make it clear that they are intended only for the person to whom the reference is given (the new employer for example), and must not be disclosed to, or relied on, by any third party – whether by your staff giving the reference, the new employer or, if they obtain sight of a copy, the employee to whom it relates. Some employers include a specific statement in the reference that no third party is to rely on it.

Always take legal advice if in doubt!