Writing employee references

Stephanie Slanickova, a solicitor specialising in employment and resourcing at City law firm Tarlo Lyons, examines the implications of writing employee references.

The problem

Richard, a hotel cleaner, makes a formal complaint to his employer alleging sex discrimination, and a week later he resigns. His line manager believes he made the complaint only because he knew that allegations of poor conduct had been made against him by fellow workers. The hotel did not, however, inform him about the allegations against him. On finding another job, Richard requests a written reference. The hotel generally provides references on request. What should the hotel do?

The law

There is no specific statutory or common law obligation to provide a reference to a current or former employee unless:

• It is a contractual term (whether through custom and practice or written into the employment contract);

• It is an obligation under the rules of a regulatory body; or

• It has been agreed under the terms of a compromise agreement.

Any reference that is given must be accurate, and the overall impression should not be misleading.

Expert advice

As the hotel generally provides references on request, Richard could argue that the provision of a reference has become a contractual entitlement through "custom and practice". If the hotel has in the past given references and now refuses to do so, he could claim that the hotel has breached his contract.

Furthermore, to refuse to provide a reference because Richard has made complaints of sex discrimination against the hotel could also amount to "victimisation", which is in itself an act of sex discrimination contrary to the Sex Discrimination Act 1975 (SDA).

One situation in which victimisation occurs is when an employer treats a former or current employee less favourably because he or she has alleged that the employer has breached its obligations under the SDA.

When providing the reference, the hotel also owes a duty to Richard to take reasonable care. A failure to do so could mean being liable to him in negligence if he suffers a loss.

To summarise, the reference must be accurate and the overall impression must not be misleading. However, the courts have decided that references do not have to be "full and comprehensive".

In one case last year, improper conduct had been alleged against an employee but was not discussed with him, nor made the subject of disciplinary proceedings. The reference given suggested he had been suspended for serious dishonesty and would have been dismissed had he not resigned. The employee thus suffered a loss, and the Court of Appeal upheld his claim for damages.

This illustrates that care should be taken when preparing references, and employers should not mention allegations not yet investigated. Conversely, in some circumstances it may be appropriate to mention an ongoing investigation, as failure to do so may create an overall misleading impression.

In Richard's scenario, there has been no investigation at all into allegations of poor conduct, nor does it appear that the hotel has ever raised the issue with him - he has not had the opportunity to state his case. It would, therefore, be unwise for the hotel to mention the allegations.

The hotel should also remember that it owes a duty of care not only to Richard, but to the prospective employer. If the latter suffers a loss as a result of a false statement given by a former employer who intended the reference to be relied on, that employer could face a claim for "fraudulent misrepresentation".

Alternatively, a former employer could face a claim for "negligent misstatement" by the prospective employer if it fails to take reasonable care to ensure that the reference is accurate.

It would be wise for the hotel to consider a policy for the type of reference it is willing to give, to ensure that the scope and nature of references are consistent.

Check list

• Decide who within your organisation can and cannot give references, and issue guidelines for both oral and written references.

• Avoid referring to an employee's poor performance if the employee has not yet been approached about it.

• References do not have to be full and comprehensive but they should be accurate, and the overall impression should not be misleading or unfair.

• Decide on the nature and scope of references.

Contacts

Tarlo Lyons 020 7405 2000

Employment Law and Industrial Relations Helpline 020 7396 5100

Beware!

A sum of £195,000 was awarded to one claimant following a successful claim for victimisation based on an employer's failure to provide a reference.