The pitfalls of references

Following a recent ruling an employer may be liable to a former employee for damages for negligent misstatement when communicating with a future employer about him.

It was already established that an employee can claim following a reference negligently prepared by an employer, but the new case extends the principle to a statement made by a former employer which was not a reference.

An employee received a good reference when he left and later joined another organisation.  Subsequently an email in less favourable (and untrue) terms was sent to the new employer and the employee lost his job.  The email was not intended to be a formal reference but the High Court treated it as such and held that a duty of care applied and the claim succeeded because ‘the damage sustained was foreseeable, the relationship was sufficiently proximate, the claim fair, just and reasonable and there was a causal connection between the negligence in and about the sending of the email and the damage claimed’.

Another case has highlighted that it may also be wrong to refuse to give a reference.  The EAT confirmed that had there been evidence that the refusal to provide the reference had been in response to the fact that the employee was pursuing a sex discrimination claim against her current employer, this could amount to victimisation and a claim could be upheld.

 What to do?

Employers often decide either to refuse to provide a reference or to give just a statement of service. However, there are some simple steps you can take to minimise the risks associated with references:

• take a consistent approach with clear guidelines for managers on both the process for providing references and who is authorised to provide them,
• try to restrict references to confirmation of an employee’s role and period of service,
• or give only basic factual information and avoid making assertions which are likely to be disputed by the employee,
• avoid recommendations – positive or negative – to a future employer on whether the employee is suitable for employment
• consider including disclaimers in references which make clear the limits on the information being provided.