Contrary to popular belief, the law imposes no obligation on an employer to give a reference (unless there is an express entitlement under an employee's contract). But it is generally accepted that there is a social or moral duty to provide one if it is requested.
Where the law does come into play is when an employer agrees to provide a reference. In these circumstances, the law states that a reference must be honest, accurate and fair. Former employees could claim for financial loss suffered as a result of a negligent reference or, even worse, one that contains deliberate untruths. Statements in a reference should not refer to complaints or difficulties that have been raised with the employee, as it could be argued that this itself is a breach of contract and a negligently prepared reference.
References should not be refused for employees because they have raised grievances regarding equal pay, sex discrimination, race or disability discrimination, as to do so could itself result in discrimination. Nor should such employees be provided with intentionally bad references.
Employees could claim for financial loss suffered as a result of a negligent reference or, even worse, one that contains deliberate untruths
An employee who is involved in disciplinary proceedings and is dismissed for misconduct is also entitled to a fair reference. Before the employer is allowed to refer to such disciplinary issues, it must ensure that there are reasonable grounds to believe the employee has been guilty of misconduct and that it has carried out sufficient investigation into the matter.
As giving a reference to a third party amounts to the processing of data, it is subject to the controls of the Data Protection Act. In particular, information about sickness, absence or a medical condition could amount to sensitive personal data, which means, in effect, that this information cannot be disclosed without the explicit informed consent of the employee. For this reason employees should be asked for signed consent before providing such a reference.
Tara Cosgrove, partner at solicitor Beale and Company