Employee references might seem straightforward, but they can be a legal and practical minefield for employers. Whether you’re writing a reference for a current employee or responding to a request for a former team member, there are important considerations to keep in mind.
This guide will walk you through the do’s and don’ts of employee references, helping you to stay compliant and avoid unnecessary disputes.
Are you legally required to provide a reference?
In most cases, as an employer, you are under no legal obligation to provide a reference for a current or former employee. However, exceptions to this rule do exist, such as when there is a contractual obligation to do so, if an agreed reference is part of a legally binding settlement agreement, or when the reference request is from an employer in certain regulated sectors, for example if they’re regulated by the Financial Conduct Authority. These exceptions are confirmed by ACAS.
Even if you aren’t obliged to provide one, if you choose to, the reference must be accurate, fair, based on factual information, and must not be misleading. Failure to follow these simple guidelines can result in claims of defamation or discrimination.
What are some legal considerations to keep in mind?
If you’re asked to provide a employee reference, there are some legal considerations to keep in mind, as we highlight below.
GDPR (General Data Protection Regulation)
References often contain personal data, and this means GDPR applies. Therefore, you must ensure the data you are providing regarding the employee is accurate and up to date, that employees are aware that a reference is being provided and they have given their consent, and sensitive personal information (such as health data) is not disclosed without explicit consent from the employee.
Employees can request to see a copy of their reference, but this doesn’t mean automatic disclosure and you may need to submit a subject access request in order to do so if your employer refuses.
Discrimination risks
The content of a reference must not reflect discriminatory attitudes so it’s crucial that you avoid making references to protected characteristics (such as age, gender, disability) and you refrain from having an unconscious bias, as even unintentional comments can carry legal consequences. References should focus solely on objective, work-related facts.
Defamation
A negative reference can lead to defamation claims if the employee believes the content is inaccurate or harmful to their reputation. To avoid this you should ensure all statements are based on verifiable facts, and avoid including any personal opinions or ambiguous wording. For example a bad reference might be one where an employer states that performance targets were not met. There will be data to support that statement so whilst it’s negative, it is not unlawful.
If you’re unsure, then as many employers tend to do, stick to providing very basic information in a reference such as the employee’s job title and their dates of employment.
What are some common pitfalls to avoid?
When it comes to writing an employee reference, it can be very easy to fall into the trap of providing a bad reference. For example, it can be easy for employers to be inconsistent with their references. You may provide a detailed reference for one employee, but not for another, and this can lead to claims of unfair treatment. You should ensure all of your employee references are consistent and include the same amount of information.
Over-disclosure is another common pitfall, where some employers can fall victim to sharing more information than necessary, which can breach GDPR or result in discrimination claims. Be sure to only provide the necessary information required, but also be mindful of being too vague. For example, try and refrain from saying “I cannot comment” as this can lead to many assumptions and potential legal risks.
Consistency and clarity are crucial. As an employer you may wish to have a company reference policy and a standard response template which all managers can use, or it may be that in your business all reference requests are completed by the same person which again will provide for a consistent approach.
How to handle reference disputes
In some cases, employees might challenge the content of a reference and there ways you can effectively manage this. For example:
- Be sure to review and respond – consider their concerns carefully and check the accuracy of the reference you have provided.
- Correct any errors – if you have found an error, correct this immediately and send an updated and corrected reference.
- Document everything – keep records of the dispute and how it was handled to demonstrate fairness and compliance.
Employee references, when handled correctly, can benefit both employers and employees. By following best practices and staying mindful of legal obligations, you can minimise risks while providing fair and balanced references. Remember, when in doubt, less is often more.
Speak to us to learn how HRX can help
When you use HRX when providing employee references, you can store all references you give and receive for staff on their individual employee records. This means that all reference information is available as and when needed, and is stored safely and securely in order to meet GDPR requirements.
To find out more, sign up for your FREE 30 day trial today, or book a demo with one of our experts.
