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Employer guides: Should I give a reference?

References are often an area of confusion and concern for employers. Many decline to provide a reference for fear of the potential legal consequences of responding honestly. This has the negative side-effect of reducing the worth of a valuable recruitment tool.

So what are the risks involved in providing a reference, and what can you do to minimise these risks, if you would like to provide a reference for an employee.

Do I have to give a reference?
Generally (subject to certain exceptions in the financial services sector and education) there is no obligation to provide a reference. However, if employers do decide to respond to a request, there are three main things to be mindful of:

  1. Civil claims of negligent misstatement, defamation or malicious falsehood from either the employee or prospective employer;
  2. Discrimination claims; and
  3. Data protection (GDPR).

What are the risks?
The general rule is that if a reference is provided it must be fair, accurate and truthful and not give a misleading impression.
The main risk is a claim of negligent misstatement from either the employee, prospective employer or both for damages. In practice such claims are rare and unlikely to result where a positive (and accurate) reference is given. The chances of a reference resulting in a claim are significantly increased where an unfavourable reference is provided, especially where a substantial loss can be shown to have arisen as a result (i.e. because a conditional offer of employment has been withdrawn). Although of course if the reference complies with the aforementioned general rule, the employer will have a defence to the claim.

There is also potential for an employment tribunal discrimination claim if the reference, or even the failure to provide the reference, is due to a protected characteristic (such as age, race, sex, disability, sexual orientation, religion or belief). Adopting a consistent approach to the provision of references is therefore important and you need to be mindful that the content of the reference cannot be seen as discriminatory.

Data protection wise, the provision of a reference will usually be a form of data processing. You should therefore ensure that you have complied with GDPR principles and, if disclosing health-related information about a sickness record or reasons for absence, that the employee consents to the provision of confidential personal information being held on them to the person or entity requesting it.

Do I have to provide a copy of the reference to the employee if this is requested?
Simply put, no. The GDPR and Data Protection Act 2018 permits both the reference provider and the recipient to decline to provide a copy of a reference if it is requested by the subject. This is a change to the previous position under the Data Protection Act 1998.

However, this does not extend to disclosure in legal proceedings. Therefore, if the matter escalates to the court or tribunal stage, you will be required to disclose the document as part of the proceedings.

4 Top Tips – to help avoid any problems, we would recommend:

  1. that employers have a policy to help them handle reference requests, detailing what information they and their employees can provide. This should help ensure compliance with data protection law and reduce the risk of a discrimination claim;
  2. the simple fact is that there is a correlation between the amount of information provided and the risk of liability. When in doubt, adopt a short, factual and consistent approach;
  3. if negative information is included in a reference, it should have been raised with the employee first and clearly documented; and
  4. the use of a clear disclaimer can eliminate the chance of a successful claim by the recipient of a reference.

If you have received a request for a reference, been threatened with legal action concerning a reference you have provided, require assistance with a reference policy or would like to discuss any aspect of employment law generally, please contact Melanie Rowe on 01872 227006 or by email at melanie.rowe@murrellassociates.co.uk.