Does an employment reference have to be provided?
There is no general legal obligation for an employer to give a reference to an employee. However, it is common for references to be provided and employers should ensure that they have an internal policy stating what information will be contained within the reference. This should be applied consistently to avoid potential allegations of discrimination or victimisation.
An exception to the above arises when employers are regulated by the Financial Conduct Authority and the Prudential Regulation Authority; these industries are required by law to give a reference. There is a general duty during recruitment for firms to satisfy themselves that potential employees are 'fit and proper' to perform the role with references going back five years.
What can an employment reference include?
When providing a reference employers have a duty to exercise reasonable skill and care. The reference must be a truthful, accurate and fair account that does not contain misleading or inaccurate information. Employers also have a duty of care towards any prospective employers and a misleading reference could lead to a potential claim for negligent mis-statement or deceit.
The guidance states that it is lawful to include opinion within an employee's reference provided that this is based on factual evidence. Therefore it is advised that reference writers exclude subjective comments where possible and, if further details are required, ensure that reasonable care is taken in respect of the factual content of the opinions expressed.
There are two types of job offers provided to potential employees – conditional and unconditional. Conditional job offers can be withdrawn where the applicant fails to fulfil a specified condition; this is commonly a satisfactory reference. An unconditional job offer will only usually be made once an acceptable reference has been received by the employer. This offer cannot be withdrawn (without consequences) and a contract is formed on acceptance by the employee.
The reference an employer is willing to provide is commonly dependent on how the employment relationship ended (subject to the employer's reference policy referred to above). An employer is more likely to provide a positive reference with regards to an employee's performance, attendance and achievements etc. if the employment ended amicably. Where the employment has ended on difficult terms (for example as a result of disciplinary proceedings), it is more common for an employer to give a factual reference only.
Where an employee leaves employment with disciplinary proceedings pending there is no obligation on the employer to complete any outstanding disciplinary investigation. However, comments in the reference that are unfavourable must be limited to matters that were investigated (and where the employer has reasonable grounds to believe that the remarks are true).
An employer needs to be cautious when an employee leaves under a settlement agreement that contains an agreed form reference. If the employer deviates from this reference it could result in a breach of contract. Even where a written reference is provided in the agreed form, an employer should remain cautious about what is later said, as it could subsequently act in breach. For example a later telephone conversation was held to have contributed to the withdrawal of an employment offer and was therefore discrimination in Pnaiser v NHS England and Coventry County Council.
Obtaining a copy of an employment reference and the effect of the GDPR
Providing a reference involves the processing of personal data. Under the Data Protection Act 1998 employees had no right to request a copy of their reference from their employer. However, this could be circumvented by applying to the recipient of the reference for a copy. The General Data Protection Regulation (GDPR) and Data Protection Act 2018 include an exemption in respect of references given (or to be given) in confidence for the purposes of education, training or employment. The exemption covers the personal data within the reference whether it is processed by the reference giver or the recipient.Rhiannon Jenkins is an associate in the Blake Morgan employment team