Should you provide an outgoing employee with a reference?

Are you required to provide an outgoing employee with a reference?

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A common question we receive from employers is whether they have a legal requirement to provide an outgoing employee with a reference.

We would always advise employers to take care when providing a reference or rejecting a request for a reference.

What does the law say?

There is no legal requirement for an employer to provide a reference unless they are in a regulated industry. This could include industries such as financial services, banking or the care industry.

Although it is unlikely, there may also be terms in an employeeâ??s contract which indicates a reference should be provided.

Ensure any reference are accurate

If a reference is provided, it is essential that any information is accurate. An unfair, untrue, or inaccurate reference could may lead to claims of discrimination, defamation, negligent misstatement and/or breach of contract.

The House of Lordsâ?? decision in Spring v Guardian Assurance [1995] confirmed that an employer who provides a reference for an outgoing employee has a duty to take reasonable care in making the reference.

If you were to provide an inaccurate reference and an employee suffers loss as a result, you may be liable to the employee in negligence.

It is also vital to ensure that any reference provided is balanced. As well as including positive attributes of the employee, you should also disclose any negative aspects of the employeeâ??s performance which may exist.

As a result, many employers now simply provide a purely factual reference including:

  • The employeeâ??s start date
  • The employeeâ??s end date
  • Their job title
  • A description of the main responsibilities and duties of the employee.

Complying with the Data Protection Act 1998

The Data Protection Act 1998 (DPA) provides an individual with certain rights regarding data held about him or her. This includes access to the data and the requirement to give consent before it passed to a third party.

Producing a reference constitutes the processing of personal data. So, it is vital for this to be carried out in line with the DPA. Attempting to provide information in a reference about an employeeâ??s sickness records or reasons for absence should be approached with care.

In most cases, you would require an employeeâ??s specific consent to disclose such sensitive data.

Could failing to provide a reference be construed as discrimination?

Whilst it is vital to ensure that no discrimination content is contained within a reference, care must also be taken when deciding not to provide a reference.

Former employees as well as current employees have the right not be discriminated against under the Equality Act 2010.

Do you need to provide an employee with a copy of a reference?

In short, no.

The content of a reference does constitute personal data and could become subject to a Data Subject Access Request. However an exemption under the DPA stated individuals do not have the right to receive a copy from the company which has written the reference.

Despite this, it would be reasonable to provide a reference to an employee where the information is mostly factual in nature.

Do you need to provide an employee with a copy of a reference you have received?

Individuals do have a right to receive a copy of the reference from the company receiving the reference.

How to avoid the legal pitfalls

When providing or receiving a reference, we would always recommend following certain steps to avoid any potential claims. These include:

  • Providing a simple factual reference which states the employees start date, end date, job title and main duties.
  • Avoiding subjective opinions or comments on character, performance, absence or disciplinary proceedings.
  • Having a policy in place which states that as an employer, you only provide short and factual reference. Make all employees aware of this policy.
  • Marking all reference â??private and confidentialâ??.
  • Stating in a job offer or contract of employment that employment is conditional on receipt of a satisfactory reference and receipt of an unsatisfactory reference may result in the job offer being withdrawn or employment being terminated.

Contact Law for Employers for expert employment law advice

For more information on how we can help you stay legally complaint when providing a reference, contact us today.

You can receive free initial advice from a specialist employment law solicitor by calling us on 01282 695 400.

Or, simply complete our quick contact form to arrange a call-back.