An Employer’s Guide to References

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There is a lot of confusion surrounding employment references. What should they include? What shouldn’t they include? Can you give a bad reference and if you do will you end up in court?

In this article we look at the legal position regarding the obligation to provide references (which is refreshingly straight forward), the ‘do’s and don’ts’ of what to include and hopefully dispelling some commonly held myths along the way.

Are employers legally required to provide references?

Generally, no but there are some exceptions to this in regulated industries such as financial services or where the employer has statutory safeguarding duties.

It was revealed last year that the government was considering introducing a legal requirement for employers to provide basic references, but for now there is no legal requirement, so this will be one to watch here

What are my options when I am asked for a reference?

  • As stated above you can refuse. However as with most things, you should always be consistent. If it is your usual practice to give references, you may be doing yourself more harm than good by refusing to provide a reference for one particular employee.
  • Give a basic factual reference which includes information such as confirmation of the employment dates and the job the person caried out.

This is the most common approach to references and one we tend to advise clients to follow. The benefit of a factual reference is that you avoid the obvious negative inferences of refusing to give a reference and also avoid falling into the trap of giving out too much information and leaving yourself open to challenge.

  • Give a full reference. Usually you will be contacted with a form to fill in or asked to respond to certain questions. If the information is accurate, provided in good faith and is reasonable, you shouldn’t have any problems.

Remember- if in doubt, contact our experts, we will be happy to look over reference wording for you.

If I refuse to provide a reference, what are my risks?

It will depend on the individual circumstances. For example, if you refuse to provide a reference, how you refuse will be very telling, so you need to be very careful there.

Usually an employer will feel reluctant to provide a reference because the employee in question was problematic in some way. However, you must be careful that your refusal to provide a reference can’t be attributed to a discriminatory reason. For example, if the employee left having raised grievances alleging discrimination, your refusal to provide a reference for them may compound the issue.

Please see our article on discrimination here.

Likewise, if the employee brought tribunal proceedings against you or was witness in tribunal proceedings, refusing a reference may expose you to risk of victimisation.

Be aware of any contractual obligations or agreements. For example, if someone has parted company with you under a settlement agreement, an agreed reference is usually part of that agreement. If you refuse to provide an agreed reference you will be in breach of that agreement.

If it’s my policy not to provide references, will refusing to provide a reference still be perceived as a bad reference?

Possibly but the best thing to do is to make sure you still respond to the request, rather than ignoring it.

Respond by stating it is your company policy not to provide references and no negative inference should be drawn from this (a similar statement can accompany a factual reference request).

If it is your company policy not to provide references, it would be a good idea to make any employees leaving your employment aware of this.

Isn’t it illegal to give a bad reference?

This is one of the most commonly held myths. Its not illegal to provide a bad reference but it must be accurate and there are a few factors to weigh up before doing so:

  • When preparing a reference, you must take reasonable care in doing so. It must be factually correct and not misleading.

Please note- the tendency to mislead doesn’t only come from stating that someone was a terrible employee when they were not; it is equally misleading to give a glowing reference when one is not appropriate.

  • Make sure that if you include references to poor conduct or disciplinary action that this can be backed up. Stating that someone ‘would have been disciplined’ is not reasonable and should not be included.

However, if they were disciplined (following a fair procedure and assuming the outcome was not overturned at appeal) it is ok to refer to this but if they left before the disciplinary process was concluded then it is important that this is made clear.

  • No surprises! Avoid referring to concerns or alleged incidents which you did not address with the employee directly. A reference should not contain anything the employee is not aware of.
  • Please don’t exact your revenge on an ex-employee via a reference. At best, its unprofessional and at worst you may find yourself on the receiving end of a claim.

What about verbal references?

Many schools of thought on this one. My advice is to avoid seeking and giving verbal references.

The reason for this is not only are they not worth the paper they’re not written on but if you are giving a verbal reference you tend to be a lot less guarded and you can be sure the person to whom you are speaking has a pen and paper in their hand- or worse, you may be on a recorded line! Avoid. 

Do I need consent from an employee before responding to a reference request?

This can be a bit tricky and usually the fact that a prospective employer has been given your details and is contacting you means that the employee is aware and consented.

Where references are concerned, one of the most important things to remember is that a reference contains personal information and where personal information is concerned employers have data protection obligations.

This is particularly relevant when disclosing information regarding sickness absences. Many employers are very keen to know if the candidate they are contemplating recruiting has a poor absence record or not.

However, just as an employee doesn’t have a duty to disclose their medical history at recruitment stage, it is not information that must be disclosed on a reference.

It is better to seek advice on this before you disclose or seek any sickness absence/medical related information.

References – do’s and don’ts:

  • Don’t provide a reference in haste or at the end of a bad day. A reference is a professional document, it’s not a poison pen letter.
  • Do get consent – if you are unsure as to whether you have consent to respond to a reference request or consent to provide certain information, such as sickness absence information, then ask for consent.
  • Do be honest but also accurate.
  • Do be consistent- have an ‘all or nothing’ approach to whether your company gives out references.
  • Don’t be contradictory- if you give a glowing reference for someone you have just dismissed for poor conduct or performance this may work against you if they bring a claim for unfair dismissal.
  • Do centralise the function. You don’t want anyone and everyone giving references out on behalf of your company.

Instead make sure that employees who are leaving know to whom they should address any reference requests and that the person providing references knows what they’re doing.

  • Don’t include any surprises- an employee should not find out about concerns you had about them for the first time via a bad reference.

Please quote your Client Account Number on all correspondence and telephone calls. 24-hour client advice line: 0800 151 2935.