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Providing Employee References

Wednesday, 9 January 2013

Employers must take adequate care in providing employee references in order to prevent or minimize the risk of legal action from employees or prospective employers. Although employers can choose to give references to employees upon request, the legal obligation to provide a reference only arises where the contract of employment explicitly provides for it.

Providing Employee References – Duty of Care

Employers owe a duty of care both to employees and recipients of the references. Therefore, references must not contain information that has potential to mislead recipients or present a false, unfair and inaccurate assessment of employees. Employers are also prohibited from disclosing sensitive personal information about employees in the references without their prior consent.

Failure to follow these guidelines may result in legal action by employees for defamation as well as damages for other losses, or by recipients for negligence. A claim of constructive dismissal under the Employment Rights Act 1996 might also arise by current employees.

Providing Employee References – Discrimination

Any kind of discrimination by employers towards employees in the provision of references could be open to a claim for discrimination or unfair dismissal under the Employment Rights Act 1996. Even an inconsistent approach could lead to claims of unfairness. Therefore, employers are encouraged to evolve a policy for employee references, and apply it uniformly to all employees.

A reference policy must be categorical on whether references are to be provided at all and, if references are to be offered, the policy might state that they should contain bare minimum factual details or indicate the level of detail required.

References and the Data Protection Act 1998

Under the Data Protection Act 1998, employees generally have the right of access to their confidential information from recipients of the references unless there is a risk to the referee. The Good Practice Note issued by the 2005 Information Commissioner recommends that in such cases, recipients should conceal the identity of referees and provide a short summary of the references.

Employers cannot unconditionally prohibit the release of the references to employees. By marking references as private and confidential, employers can claim non-disclosure of the references or any part thereof to any third party.

Providing References - Conclusion

In this backdrop, employers are advised to provide bare minimum information that is primarily factual in nature to ensure that a reference is true, fair and not misleading. At the same time, it is advisable to incorporate material facts in the references as any omission might be construed as creating a misleading impression on recipients.

Finally, overreliance on the use of disclaimers in references can be risky as they will not hold much value in court if they are unreasonable and employers will not be excused from liability if they have otherwise acted negligently.

If you would like more information on providing employee references or other employment matters, Rollingsons has experienced lawyers who can advise you. Please contact Aneil Balgobin via e-mail or by telephone on 0207 611 4848.

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