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This month, the Advisory, Conciliation and Arbitration Service (ACAS) launched new guidance on employee references, an area which employers are often apprehensive about. In a previous Insight post, we discussed the potential GDPR (i.e. data protection) issues which can arise in relation to references.  The ACAS guidance is a useful summary for employers regarding some of their other obligations in relation to the provision of references and the potential risks arising in preparing and providing these.

References and their content is a sensitive and important topic and the impact of untrue or inaccurate references may be far reaching for the individual concerned.  Their provision also gives rise to legal risks for employer.  Employee claims for breach of duty care under common law, or allegations of discrimination are just some of the potential consequences for failing to follow good practice in the provision of a reference.  Employers should also be wary of breaching the term of trust and confidence, implied into every employment contract, when preparing a reference.  This term encompasses behaviour which could be deemed ‘likely to destroy or seriously damage’ the relationship between the employer and employee.  If breached, for example by writing malicious or untrue statements in a reference in respect of an employee who has not yet resigned, it may entitle the employee involved to terminate the contract and raise a claim of constructive unfair dismissal.  It is therefore no surprise that the majority of employers have now adopted a policy of only providing “factual” references confirming dates of employment and the role the individual worked in, without any subjective commentary on performance.

The new ACAS guidance expands on the following points:
- What a reference can include
- Whether or not a reference must be provided
- Whether a ‘bad’ reference can be issued
- Conditional and unconditional job offers and references
The most significant and topical of these points will be discussed below.

Can a bad reference be issued?

It is a common misconception that it is not possible to provide a “bad” reference for an employee. This is not true. However, the golden rule for employers is that references must be accurate, fair and should avoid subjective opinions or comments which are unable to be supported by facts.  Employers have a difficult balance to strike, firstly they owe a duty to the subject of the reference to take reasonable care in ensuring that the information is true and not misleading, and secondly to the recipient of the reference, if they are to be able to rely on what has been written.

Does a reference have to be provided?

There is generally no legal obligation on an employer to provide a reference. However, it is important that employers treat reference requests consistently.  If an employer chooses to provide detailed references for certain individuals, it should, unless there are exceptional circumstances, provide the same level of detail for each one it writes, regardless of whom it concerns.  Similarly, if an employer chooses to provide a few lines of purely factual information as the basis of their reference, this approach should generally be replicated in respect of   every employee who seeks one.  Furthermore care must be taken where the employer choose to decline to provide a reference, for example in relation to an employee whom they do not view favourably. Such approach should be capable of being demonstrated to apply in a similar manner to all.  If an employer is inconsistent in its provision of references, they must be aware that they are potentially exposing themselves to the possibility of legal challenge.  When considering this, particular regard should be had to the application of the Equality Act 2010.  The purpose of this act is to protect individuals from discrimination in employment and wider society.  It does this by enshrining  nine characteristics which it deems ‘protected’, for example sex, sexual orientation, race and age, providing   those who possess  or associate with those with a  protected characteristic an extra measure of protection, if  this can be said to be  at the root of the treatment.  This can extend to possible claims of post-termination victimisation if it can be said that the reason for the non-provision of a reference is that the employee carried out a protected act such as the making of a complaint about alleged discrimination.

Conclusion

While the ACAS guidance does little more than summarise the basic law on references, it is a useful starting point for employers who are unsure about their obligations, and it may be a useful guide to bring to the attention of managers who are in the practice of writing references on behalf of an employer.  It is also an opportune moment for employers to review their internal policy on provision of references and ensure that a clear and consistent approach is taken which does not unduly expose the business to claims from either the subject of the reference or the recipient.
If you have any queries in relation to the legal obligations related to reference please get in touch with a member of the Stronachs Employment Team.

Morven White, Trainee Solicitor

Chambers Leading Firm 2019

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