When a person applies for a job, their new employer may ask for a reference from their old employer, to make sure that the person has been honest about their employment history and to ensure that they are suitable for the job.
However, most employers will no longer provide any information on a reference other than the dates that an employee worked for them and possibly their job title.
It is rare these days for any further information to be included, but why is that?
There is a popular myth that an employer is not legally allowed to provide a 'bad' reference or to include any negative information.
Unfortunately, this is not true.
However, in 1994 the House of Lords (at the time the most senior Court in the UK), stated that a former employer owes a duty of care to an employee when they provide a reference.
This means that if the former employer sends a reference that contains inaccurate information, they can be sued by the employee.
You might think that as long as an employer provides a reference that is factually correct, they would have nothing to worry about.
Unfortunately, it is not that simple.
The Court of Appeal has ruled that a reference should not give an unfair or misleading impression overall, even if parts of it are factually correct.
A simple example of this might be if an employer wrote a reference stating that an employee had taken four weeks' sick leave in their final year of employment.
This might be true but, standing alone, could create the impression for the new employer that the employee was always taking sick leave.
If the real reason behind the sick leave was that the employee had broken their leg in an accident and the employer did not mention this, the reference would be misleading.
Courts have also ruled that including information such as complaints against the employee that have not been investigated and put to the employee and so are untested, can create a misleading impression.
Employers therefore safeguard themselves by sticking to uncontroversial information.
Usually, if an employer wants to make a comment about an employee, they will decline to provide a reference, as there is no duty on an employer to provide a reference if they do not wish to.
Legal Issues Surrounding References
Unfortunately, employers do not always provide uncontroversial references.
At Specters, we have seen three main situations where problems have arisen.
The first is when an employee does not get on with their immediate manager, but when they leave, they provide the manager as a reference. The manager, perhaps unaware of their legal obligations, allows their personal feelings to cloud the reference and they provide misleading or inaccurate information.
The second is where a new employer, rather than just asking for a reference, sends a form with several questions for the old employer to complete. The old employer feels obliged to complete the form, notwithstanding that they run the risk of providing misleading information.
Finally, there is the situation where the employee has been involved in a claim against their old employer and one of the settlement terms is that the employer will provide a reference in an agreed form. Somewhere along the line, this detail of the agreement gets forgotten and the employer provides a reference that differs from the one agreed.
In the first two examples, the employer may have been negligent.
The third example is a breach of the contract that the old employer and the employee signed at the end of the claim.
What To Do
Often, the response of the new employer upon receiving a 'bad' reference, is to withdraw the job offer rather than asking the employee or old employer for more information.
This may seem unfair but the new employer is usually entitled to do so.
This leaves the employee now unemployed, losing income and unsure what has happened to them.
The Data Protection Act 2018 states that neither the new employer nor the old employer are obliged to reveal the content of the reference, even under a subject access request.
This means it may be difficult for the employee to find out exactly what has gone wrong.
If the old employer has provided misleading or inaccurate information in a reference and this has resulted in a new employer withdrawing an offer of employment, then the employee may have a claim against the employer for lost income until they find another job.