8 Things Every Employer Should Know about References

It is common practice for employers to provide references for employees and ex-employees, but there are risks involved. Here are eight things you need to know before you give anyone a reference.

  1. No legal duty to provide a reference. There is no obligation on you to provide a reference for an employee or ex-employee, unless there is a term in the contract which provides for this. This is irrespective of whether the request for the reference comes from the employee, a prospective employer or any other third party such as a bank or landlord.
  1. References must be true, accurate and fair. You have duties towards the subject and the recipient of the reference. You must take reasonable care to ensure that the information in the reference is true, accurate and fair, and does not give a misleading impression. If you fail to take such care, you could be sued for negligent misstatement and ordered to pay compensation. As an employer you must ensure that any reference you give, or any reason for refusing to give a reference, is not discriminatory and does not amount to victimisation. Employers can be liable for discrimination against a former employee even if it occurs after the employment has ended.
  1. Policy on giving references. It is good practice for employers to have a written policy on providing references. The policy should set out when a reference will be provided, who within the organisation may provide references and what information the reference should include. Many employers have a policy of providing a standard reference including only limited information, for example dates of employment and positions held. This limits exposure to claims.
  1. Settlement agreements. When you receive a reference request, you should check if there is a settlement agreement in place relating to the particular individual. Settlement agreements often contain the wording of an agreed reference, which the employer agrees to provide in respect of any reference requests made regarding the individual. There is more here on Settlement Agreements in one of our previous blogs.
  1. Employee consent to reference. In writing a reference, you are likely to have to process the employee’s or ex-employee’s personal data, as regulated by the Data Protection Act 1998. You need to check that the individual has consented to a reference being provided.
  1. Sickness absence. You must get explicit consent from the individual if you are providing sensitive personal data, such as physical or mental health information. Revealing the number of days an employee has been absent, but not the reasons for the absences, will not require explicit consent. However, this does run the risk of disability discrimination.
  1. Disclaimer of liability. Employers often include a disclaimer of liability arising from errors, omissions or inaccuracies in the information provided in a reference. The circumstances in which a disclaimer will be effective are limited. However, it is still worth you including one.
  1. Sending the reference. A written reference should be addressed to the named individual who has requested it and marked “Strictly private and confidential” and “To be opened by the addressee only”.

Do I Have to Give a Reference to a Former Employee? Standard Reference Letters

As an employer, you might be asked for a reference for a member of staff who is leaving or who has left your business. You’re not obliged to provide one in either of these cases and you can actually refuse to provide a reference. I covered all the finer points of this issue on a previous blog, which you can read here.

In this blog I thought I would give you details of Standard Reference letters than you can use, if you’re asked for a reference.

Dear Name of Person asking for reference

We refer to your letter of [date], in which you requested that we provide you with [details of information requested].

Unfortunately we are unable to comment as the organisation operates a policy of not providing written or verbal references for individuals.

Yours sincerely

Your Name

It’s a simple as that!

Whether you follow this policy or not, it is important that you take a consistent approach to this issue and treat all reference requests in the same way. If you usually respond to requests for references but do not do so on a particular occasion, you run the risk of discrimination under the Equality Act 2010, which provides protection against discrimination to employees, job applicants and former employees.

If you want to provide a basic reference, here is a sample letter you can use.

Private and confidential – for the addressee only

Dear Name of Person asking for reference

[Name of your employee] [was/has been] employed by [name of your company] from [date] to [date]/since [date] as [job title].

[His/Her] role involve[d/s] [short description of the employee’s key job duties and level of responsibility].

[Name of employee] left the organisation [insert reason for termination of employment, e.g. resignation, redundancy or the expiry of a fixed-term contract].

[Insert any other appropriate points in accordance with the organisation’s policy on giving references.]

While the information provided is, to the best of [name of our organisation]’s knowledge, completely accurate, [name of your organisation] cannot accept any liability for decisions based on it.

Yours sincerely

Your Name

If you’re unsure about any aspect of providing a reference (or not) please do contact me for a quick chat, to make sure you’re doing the right thing and so that you can avoid any future problems.

Source of letters: www.XpertHR.co.uk.