References: New Guidance Released for Employers

ACAS have recently issued new guidance for employers regarding the provision of references for employees. The guidance can be found here.

Although the ACAS guidance is fairly basic, and does not change the law in any way, it is a useful aide memoire.  

Here is a brief summary of some key points regarding references for Employers:

  • There is no general obligation to give a reference for an Employee, and an Employer can simply decline to do so. The exception to this rule is that firms operating in the Financial Services field may have an obligation to provide a reference under rules laid down by the Financial Conduct Authority and the Prudential Regulation Authority.

  • If an Employer does not wish to give references, this is a policy that needs to be applied consistently to avoid suggestions of discrimination.

  • If an Employer decides to give a reference, it needs to be honest and accurate:
    • A former Employee disgruntled by an inaccurate reference may be able to bring claims for defamation of character – although the cost of bringing such claims is likely to make them few and far between. 
    • Furthermore, an Employer giving a reference that is inaccurate may find themselves liable under the tort of Negligent Misstatement to the recipient of the reference, if the recipient relies upon it and suffers loss as a result.
    • If an Employer gives an inaccurate reference about a current employee, it is possible that the Employee could resign and bring a constructive dismissal claim.
    • Employers giving references frequently attempt to use disclaimers to avoid any liability to the company/individual receiving the reference. Although these may be helpful in preventing a claim, there are limits upon the effectiveness of such disclaimers under the Unfair Contract Terms Act 1977.
  • There is an ‘urban myth’ that an Employer cannot give an Employee a bad reference.  This is simply not correct – a bad reference can be given if it can be justified.

  • A (former) Employee is likely to be able to discover what has been written about them in a reference by making a GDPR subject access request – and the Employer would have to disclose this within one month of receipt of the request.

  • Job Centre officers may make enquiries regarding a former employee to an Employer, and a legal obligation may compel that Employer to answer the Job Centre officer’s enquiries.

  • Section 60 of the Equality Act 2010 will usually prevent an Employer proposing to employ a new recruit from asking questions about the state of health of that person prior to making a job offer.  This prohibition extends to asking questions of third parties – for example in a reference request.  Employers receiving requests for references that ask about the state of health of an employee will need to act very carefully to avoid falling foul of GDPR.

If you have any questions regarding references for employees, or for any other employment related matter, please do not hesitate to contact a member of any Employment Law team: