Providing Employee References – the latest guidance for employers

As many of the best employment lawyers in London will confirm, providing a reference for an employee has become something of an onerous task. As many UK employment lawyers will have advised over the past 20 or so years, the duty on an employer to exercise reasonable skill and care in providing a reference which is true, accurate and fair has led to many employees simply confirming that an individual was employed and the dates of employment. In the recent case of Hincks v Sense Network Ltd [2018] EHWC 533 (QB), the court has given some guidance which may allow employers to feel confident to provide more information in a reference.

Providing employee references

At some point in most people’s working lives, they will need to approach a former employer to ask for a reference. Most commonly, this will be in connection with an offer of work with a new employer, although it can also be in the context of volunteering or other opportunities where a reference might be required. Since 1995, employment law firms in London – and employers - have been only too aware of the case of Spring v Guardian Assurance plc which has been the leading case on the duty on an employer to provide true, fair and accurate employee references. The case essentially led to a reluctance on the part of employers to provide anything other than an entirely factual reference – often only stating employment dates and job titles held by the individual. Although unsatisfactory many top employment solicitors have been in agreement that this is the most effective way for employers to avoid costly litigation

The facts in Hincks v Sense Network Ltd

The facts in this case were relatively complex. Mr Hincks was an Independent Financial Adviser (IFA) who had his authorisation terminated following an investigation after he carried out a transaction without appropriate authority. He had been subject to a ‘pre-approval’ process at the time in respect of certain advice and transactions. This had come about initially following concerns about advice he had given to 2 clients, and then because he had engaged in activity (uploading client details into 2 different platforms) which needed pre-approval but had not sought this. 

Following the termination, he applied for 2 other roles, both of which he failed to secure due to the contents of the reference that he was provided.

The content of the reference

The reference that had been supplied in respect of Mr Hincks included details of what had happened and opinion. The most contentious aspect of the reference from Mr Hincks’ perspective was the inclusion of the following

“… in spite of the explanations offered by Mr Hincks, it was reasonable to conclude that he had knowingly and deliberately circumvented the agreed process”

Mr Hincks argued that the reference amounted to a negligent misstatement, was deliberately negatively misleading and that the reference had been written in bad faith. He brought claims in tort and contract seeking damages. He tried to persuade the court that if an employer is going to include negative information and opinion in a reference, the employer has to be satisfied that the opinions are reasonable and arise from a reasonable belief. In his case, this meant that in writing the reference, the reference writer effectively had to look back into the investigation and be satisfied that this had been carried out fairly and to the standard expected of a reasonable employer.

The conclusion of the Court

Unfortunately for Mr Hincks, the court did not agree. The judge concluded that a reference writer will often have very little documentary evidence before him when preparing a reference and would be unable to carry out the investigation suggested by Mr Hincks. This would also be time consuming and even defeat the object of the reference process.

In giving her decision, the judge was keen to stress the importance of expressing the standard of care to be exercised by a reasonable reference writer in broad terms. She noted the importance of the facts, which would dictate the level of care required in each case. However, she did set out some ‘common features of the duty’. The reference writer has

a) to conduct an objective and rigorous appraisal of facts and opinion, particularly negative opinion, whether those facts and opinions emerge from earlier investigations or otherwise;

b) to take reasonable care to be satisfied that the facts set out in the reference are accurate and true and that, where an opinion is expressed, there is a proper and legitimate basis for the opinion;

c) where an opinion is derived from an earlier investigation, to take reasonable care in considering and reviewing the underlying material so that the reference writer is able to understand the basis for the opinion and be satisfied that there is a proper and legitimate basis for the opinion;

d) to take reasonable care to ensure that the reference is fair, in the Bartholomew sense, of not being misleading either by reason of what is not included or by implication, nuance or innuendo.

This does not extend to a reference writer having to unpick a disciplinary investigation, or otherwise, unless there are obvious errors or something to suggest that the underlying material that the reference writer is basing the reference on, is unreliable.

Advice for reference writers

Seek legal advice if unsure

If you have a concern over the content of a reference, it is always worth consulting the best employment law firm you can afford to ensure you do not fall foul of the duty to provide a fair and accurate reference. The facts in each case can always add complications, so if you are unsure, take advice.

Comply with regulatory requirements

Taking care to comply with any industry specific rules when writing a reference is always important. In this case, the reference writer was bound in part by the regulatory requirements in the Financial Conduct Authority’s Supervision Manual. 

Check justification

If a reference is to contain ‘opinion’ make sure the reference writer can back this up. Never make assumptions. In Cox v Sun Alliance Life Ltd the reference writer included the statement that the individual would have been sacked if he had not resigned. This statement was made when the disciplinary investigation had not run its course.

Consider what you need to include

Some information may need to be contextualised to make sure it isn’t misleading

Right of reply

Although not always necessary, you may want to consider offering the employee (or ex-employee) the chance to comment on the reference before it is finalised. This may go to ‘fairness’ – particularly if the reference is negative.

OTS Solicitors can provide practical and up to date advice on all aspects of employment law including the provision of references to former employees. To speak to one of our top London employment solicitors, please call 0203 959 9123 and book an appointment.

 

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