What’s your reference policy?

17 March 2017

Q: Can you sue the previous employer of a new recruit where they have knowingly held back relevant information from a reference?

A: In short, yes, only if the new employer suffers a financial loss.

It is common that employers will seek at least one reference to verify a candidate’s work experience.

There is no legal requirement for an employer to provide a reference or information about former employees if they are asked by potential employers of that candidate. They can ignore this request and withhold information. However , if they do give a reference, they have a duty to take reasonable steps to ensure that it is true, accurate and fair and this duty is owed to both the employee and the new employer. It cannot contain false information and they can’t omit  information if it provides a false and misleading picture of the person or their skills.

A situation whereby a new employer may sue the former employer would occur if the new employer suffers a financial loss, based on information given in breach of this duty. For example, if the employee had been dismissed on the grounds of gross misconduct for stealing,  this information was not presented to the new employer and the employee subsequently committed theft in their new role. As the former employer had omitted details of the dismissal, it would have failed in its duty to the prospective employer to provide a reference that was fair and accurate.

If an employer wishes to provide references, they should have clear policies in place about who can provide references within the business and what they should and shouldn’t include. Templates could also be used to ensure consistency and prevent issues arising. We would advise an employer to only provide factual information, such as dates of employment and job role. Employers should also be aware that their policy on giving references should be applied consistently to ensure they do not leave themselves open to allegations of discrimination.

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