Giving and requesting references for employees changing jobs is something that employers do all the time, however there is a lot of confusion about what can and can’t be said in a reference and some common misconceptions.
These are our top four myths about references, debunked and clarified…
Employers have to give references if requested
Other than in the financial services industry, there is actually no requirement to give a reference for an ex employee. However if you refuse to give even a basic reference when asked, it doesn’t take much imagination to see that a potential future employer will not interpret that favourably for your ex employee, so if you can give a reference, even if only basic information, you should do so.
An employer is not allowed to give a bad reference
This is a very common myth, and one we keep coming across. In fact there is no specific law stating that negative references cannot be given. You have a duty of care to your ex employee and references must be fair and accurate, and must not give a misleading overall impression of the candidate, but negative comments can be made as long as they aren’t misleading or inaccurate.
If you give a misleadingly negative reference and an ex employee has a job offer withdrawn as a result, you could find yourself vulnerable to a legal claim in respect of the financial losses they suffer.
To avoid the risk of legal claims that means only factual information should be given, and you should be able to substantiate any statements you make about poor performance or similar. Concerns you raise in a reference must be things that are already known to the employee, for example issues that have been raised in an appraisal or disciplinary process.
This means that giving ‘negative’ information is in fact perfectly acceptable, as long as it meets those requirements. A reference request form may ask about job performance, and if there were performance concerns which were raised with the employee, and have been documented accurately, and can be substantiated, you could mention those.
As well as a duty of care to your ex employee you also have a duty to the prospective employer. In practice that means you may well be considered negligent and held responsible if a reference you give is not negative enough – if it is in fact misleadingly positive. Some employers are so worried about giving bad references that they give good ones, but this could backfire.
If you dismissed an employee for theft but give them a good reference, and they gain employment in a retail environment where they will be handling cash, their new employer may well seek redress if the employee steals from them and it discovers the reference it relied upon from you was misleadingly positive and didn’t mention this issue.
Because you can be legally vulnerable either way, many employers decide the safest thing to do is only give very basic information such as dates of employment. However it’s obviously more helpful to give more information, and as long as you are careful to remain within the facts and give an accurate reference, you are fine to give more detail.
You can say what you like in a verbal reference without legal comeback
Many employers are very cautious about what they put in writing in a reference, but are more likely to feel able to say more in a phone call. In fact you can be held liable for a misleading verbal reference just as you can a written one, and there was actually a tribunal case highlighting this recently. An employee left under a settlement agreement incorporating an agreed written reference, and while the manager in question did issue the agreed reference to the new employer, in a phone call a misleadingly negative impression was given, and the companies both ended up in a tribunal.
References are confidential
Under the Data Protection Act, generally people are entitled to see information held by a company about them, but it is the case that you can issue a reference in confidence and there is an exemption in the Act permitting this.
However, the Act treats references issued by an ex employer and references received by a new employer differently. Your ex employee could make a Subject Access Request under the Act asking their new employer to release any personal information held about them and this would include a reference. Even if you have specifically told the new employer that you want the reference to remain confidential, that doesn’t mean it would be reasonable for the new employer to withhold it if asked.
As a reference shouldn’t contain anything an employee wouldn’t be aware of in terms of concerns about their performance or similar, it ought not to be a problem for them to see it, and you should proceed on the assumption that they may end up seeing it. For those reasons, it would also be good practice to allow an ex employee to see a copy of references issued by you about them if asked, even though you don’t have to.
If you are worried about giving or receiving a reference and would like some guidance, do get in touch.