As an employer, you might be asked for a reference for a member of staff who is leaving. You might also be asked to provide a reference by a bank or a landlord. You’re not obliged to provide one in any of these cases unless there is something in the contract to say you have agreed to do so. You can actually refuse to provide a reference as there is no statutory duty to do so for an existing or ex-employee.
When one of your employees leaves, you will have to decide what to say to other employers who call for a reference. The decision could be straightforward if the employee is leaving on good terms, you can simply tell the whole glowing truth to any prospective employer who calls for a reference.
But if the employee left in difficult circumstances, you face a more difficult task. If you are not careful in your statements about former employees, you might find yourself being sued for defamation of character. If the employee who is leaving feels that you intentionally damaged his or her reputation by making negative statements about the employee, you could get into trouble. This would be a perticular problem if the employee lost their new job as a result of the reference you provided.
In all cases, it is best to have a set policy on giving references to include only basic information about the employee’s length of service, salary and position held. Your best policy is to say as little as possible and stick to facts you can prove.
You may have an obligation to provide a reference for a former employee if it has agreed to do so under the terms of a settlement agreement (known as a ‘compromise agreement’ up to 29 July 2013). In these circumstances, specific wording to be included in the reference is sometimes agreed between the parties.