A reference is a written statement provided by a previous employer to an individual following on from the termination of their contract of employment. The purpose of obtaining references is, quite simply, to put an added safeguard in to the recruitment and selection process so that additional information is available which may affect the decision to employ. Generally speaking, a reference will include, at the very least, details on the employee’s position with that previous employer in addition to their start date and end date. However, employment references can prove to be quite the legal minefield for an employer. What may seem to be an honest assessment of a former employee’s performance may lead to legal difficulties with that now begrudged former employee, particularly if the individual fails to obtain a new job as a result. In addition, if the previous employer were to laud the abilities of a former employee and a new employer, acting on foot of that reference, ends up suffering detriment through the employee’s incompetency then the previous employer may be liable to the new employer. Simply put, it can get very messy. As such, it is important for employers to be aware of the potential pitfalls and to recognise measures that can be taken to limit any potential liability.
Is an Employer Obliged to Provide a Reference?
As a general rule, there is no absolute requirement on an employer to provide a written reference to a former employee. However, it is well accepted that now an employee can successfully argue that it is an implied term and condition of their employment that the employer must provide a reference, particularly if the following criteria are met:
- There was a contract of employment in existence;
- That contract of employment relates to an engagement of a class where it is normal practice to require a reference from a previous employer before employment is offered; and
- That it can reasonably be expected that the employee cannot be expected to enter into a class of employment unless a former employer provides a satisfactory written reference.
Duty of Care to Former Employees When Providing a Reference
When an employer is preparing a reference for a former employee then it is said that the employer has a duty of care to that former employee to ensure that the reference is true and accurate. In this respect, an employer should be conscious that if a reference is untrue then they may be liable for a civil claim whereby the former employee can sue for losses such as the loss of a particular job opportunity and/or damage to their future career prospects. In addition, the employer must be careful in terms of the accuracy of a reference and in doing so ensure that when something is stated in the reference that, while it may be accurate when viewed in isolation, it paints the correct picture when viewed in the overall context of the reference. If a previous employer makes a statement which is untrue and this statement has the effect of lowering the former employee in the eyes of a potential new employer then the previous employer may also be liable for defamation of character.
Duty of Care to Potential New Employers When Providing a Reference
As stated above, if a previous employer were to laud the abilities of a former employee and then a new employer, acting on foot of that reference, ends up suffering detriment through employee incompetency then the previous employer may be liable for damages to the new employer. The rationale for this is that it is reasonably foreseeable that a potential employer will rely on the reference during their recruitment process and as a result the previous employer owes a duty of care to the potential employer. If the reference was inaccurate then the previous employer has breached this duty of care. While such actions don’t tend to occur regularly in practice it is advisable that an employer be cognisant of the risk when drafting a written reference.
How to Avoid the Pitfalls
There are a number of steps an employer may take to limit any potential risks that could arise:
- First and foremost the reference must be a fair and accurate reflection of the individual’s employment with the employer. Therefore all information contained in the reference must be objective and any opinions given must be based on facts.
- References should be only given once the employers manager and supervisors have been questioned and the employee’s file has been examined. Conjecture or the opinions of those not directly in contact with the employee during their employment should not be included.
- Employees must have been aware during their employment of the performance appraisal system in operation. Inclusion of concerns over an employee performance should never be included in a reference unless these concerns were main clear to the employee during their employment. This also applies to any disciplinary and medical issues. While the basic fact of disciplinary issues and/or medical absences can be confirmed no mention should be made of the details of these issues.
- Avoid all mention of sensitive personal information such as any of the nine discrimination grounds (i.e. race, gender, family status, marital/civil status, religion etc.) While a reference to any such issues may have been innocent and in no way intended to be discriminatory it could be the case that a potential employer would not award a position on this basis. As a result the previous employer could be held jointly liable for facilitating this discrimination.
- Preferably references should not be given out over the phone were questions such as “would you rehire this person? “, cannot be avoided.
- It should be remembered that an employee can request a copy of a reference through Data Protection legislation. In order to protect themselves employers should ensure references deal only with fact and avoid providing any potentially libellous opinions.
- Finally, the employer should have a Reference policy in their employee handbook and all employees should be aware of its existence.
Conclusion
As can be seen from the above, a reference can often leave an employer in a legal minefield which is difficult to navigate. The purpose of obtaining references is, quite simply, to put an added safeguard in to the recruitment and selection process so that additional information is available which may affect the decision to employ. However, the author of a reference needs to be aware that in doing so they owe a duty of care to the person about whom it is written and an employer may be liable for damages if, due to a negligent, defamatory or malicious reference, the person about whom the reference is written suffers a loss. The employer must be accurate and fair but must not give a misleading impression. In summary, a good rule of thumb is that you do not write anything in a reference which you would not wish the subject of the reference to see.
Employers should seek advice from Peninsula Business Services if they have any queries in respect of employment references. Please phone the 24 Hour Advice Service on 01 8555050 and one of our experienced advisors will be happy to assist.
