April 29, 2014

How to get sued: Give poor employment references

Employers should proceed with caution when providing a reference for a former employee or else they may be liable to pay compensation.

There is a duty of care on the part of the employer to ensure that all the information it provides in a reference is accurate.

Even though a reference does not have to be comprehensive, employers must ensure that the information it contains is not misleading.

How are former employees protected?

There must be a consistency of approach in terms of whether or not an employer will provide a reference. Providing a reference for some and not others can be viewed as discriminatory treatment under the Equality Act 2010.

The Equality Act provides protection to former employees from post-employment discrimination and harassment.

Although there is currently no express protection in the Act against post-employment victimisation, a recent Court of Appeal outcome (following the cases of Rowstock v Jessemey and  Onu v Akwiwu) has clarified that the Act can now be interpreted to provide such protection.

What is meant by “Victimisation”?

Victimisation is defined as:

“Treating someone badly because they have done a ‘protected act’, or because you believe that a person has done or is going to do a protected act”.

A ‘protected act’ is:

  • Making a claim or complaint of discrimination (under the Equality Act).
  • Helping someone else to make a claim by giving evidence or information.
  • Making an allegation that you or someone else has breached the Equality Act.
  • Doing anything else in connection with the Equality Act.

What are the consequences of getting it wrong?

Employers who provide a poor reference, because a former employee has been involved in a complaint of discrimination for example, will be liable to pay compensation under the Equality Act. It is therefore important that employers avoid referring to any claims an ex-employee has made against them, or any grievances relating to discrimination, in any reference.  Employers should be aware that this will apply to verbal references as well as written references.

Where a poor reference is provided, or information is not factual, an ex-employee could potentially sue the employer for damages if they are unsuccessful in obtaining a job and have suffered financial loss. They could also make a claim for defamation or discrimination.

A new employer can also claim damages against a former employer if it transpires that an untrue reference has been provided. For example, where a glowing reference is given for an employee who performed badly – who subsequently performs badly in their new role.

Offering particularly favourable references in some cases but not others is also a potential problem, as it may give rise to allegations of discriminatory treatment.

Practical advice for employers

In order to help reduce these risks, employers should:

  • Ensure they have a formal policy in place in respect of providing references.
  • Make sure their policy is applied consistently across the business by all managers.
  • Respond only to written reference requests – verbal references can never be strictly ‘off the record’.
  • Provide “standard” references only. These are factually based and provide only basic information such as dates of employment, job title, salary on leaving etc.

References

  • The Equality and Human Rights Commission
  • Xpert HR – How to deal with reference requests
  • Personnel Today – “Poor references for claimants risk discrimination” (Article 4 March 2014)

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