I Wonder Whether Employers Are Obliged to Provide References for Employees?

When leaving a position, many employees anticipate receiving a reference from their employer to assist with future career opportunities. However, is there a legal obligation on the part of the employer to provide such a reference?

This article will examine whether employers are legally required to supply references, and the potential risks associated with doing so.

What is a Reference?

A reference is a statement provided by a current or former employer, or another professional contact, which details an individual’s employment information, such as a job title, dates of employment, and responsibilities.

Prospective employers typically request references as part of the recruitment process to assist in evaluating a candidate’s suitability for a specific role.

Employment references may take the form of either a work reference or a character reference.

The Legal Framework

Under United Kingdom law, employers are not legally required to provide a reference unless:

• There is a written agreement to do so, such as within the terms of a contract of employment.
• The employer operates within certain regulated industries, such as financial services, education, or healthcare.
• A reference has been agreed upon under specific circumstances, for example, as part of a settlement agreement.

If none of the exceptions are applicable, an employer may refuse to provide a reference.

Key Considerations When Providing a Reference

If an employer chooses to provide a reference, there are several important considerations to bear in mind:

• Fair and accurate – When providing a reference employers owe a duty of care both to the employee to whom the reference relates and to the recipient of the reference. This means that references should be prepared with reasonable care to ensure they are fair, truthful, and accurate. A breach of this duty may give rise to claims for negligent misstatement or defamation from either the employee or their new employer.
   
• It can be brief – While a reference may be detailed, there is no obligation for it to be so. An employer may choose to provide a factual reference, which simply outlines key employment details such as the employee’s job title and the dates of their employment.
   
• Data Protection – As providing a reference typically involves processing an employee’s personal data, employers must ensure compliance with the United Kingdom General Data Protection Regulation 2016 (UK GDPR) and the Data Protection Act 2018 (DPA 2018). This is particularly important when handling special category data, such as information relating to an employee’s sickness absence record.

Risks Associated with Providing References

If an employer chooses to provide a reference, there are several potential risks that should be carefully considered:

• Equality Act 2010 – Employers must comply with anti-discrimination law when providing references. An employer’s refusal to provide a reference, or the provision of an unfavourable reference, must not be due to any of the ‘protected characteristics’ under the Equality Act 2010 (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation). Additionally, when giving a reference employers should avoid including any information that may lead to discrimination, including the disclosure of any protected characteristics.
   
• Bad references – If an employer provides an inaccurate reference which results in the former employee not securing a job, the employee may be entitled to bring a claim for defamation, malicious falsehood, or negligent misstatement. If the former employee succeeds in a claim, the court may award damages for loss of earnings or injury to feelings. Additionally, if a misleadingly positive reference is given, the prospective employer may pursue a claim against the original employer and seek to reclaim wasted recruitment costs and any resulting damages.

What can employers do to avoid the risks?

Employers can take proactive steps to set out clear guidelines and responsibilities around the provision of references. This might include:

• Implementing a Reference Policy – Introducing a formal reference policy can be beneficial in establishing clear expectations and responsibilities regarding the provision of employment references. Such a policy may outline who is authorised to provide references, what information may or may not be included, and the circumstances under which references will be issued. It can also state explicitly if the organisation has chosen not to provide references. Regardless of the approach taken, having a policy in place promotes consistency and ensures that expectations are clearly communicated.
   
• Implementing a Template – Introducing a standard reference template ensures consistency and clarity whenever the organisation is asked to provide a reference. It guides the individual drafting the reference on what information should and should not be included. A standard reference template can be drafted to include only basic information, such as confirmation of length of service, job title and key responsibilities. It should also include an appropriate disclaimer.
   
• Training – Providing training to HR professionals, or any individuals authorised to give references, is essential. This training should cover what a reference should and should not include, as well as the potential legal implications of non-compliance. Equipping those responsible for issuing references with the necessary knowledge enabling them to provide references confidently and in line with both legal obligations and organisational policies.

By adopting these measures, employers can ensure that all parties have a clear understanding of the guidelines surrounding references.

Conclusion

In conclusion, while there is generally no legal obligation for an employer to provide a reference - except in certain regulated industries - many employers nonetheless choose to do so for former employees. However, it is essential that employers are aware of the potential risks associated with providing references. To mitigate these risks, organisations should take proactive steps to clearly define expectations and obligations, ensuring that any references given are accurate, appropriate, and compliant with relevant legal and organisational standards.

Further Advice

If you have any queries on providing references or any other employment-related matters, our Peace of Mind Team is here to provide expert guidance. Our Document Audit Team can also assist in drafting relevant workplace policies.

Contact our Employment Team by emailing employment@warnergoodman.co.uk or calling tel: 02380717717.

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