Introduction ⚓︎

A reference that gives a glowing account of an incompetent employee - perhaps to speed them on their way as far as possible from the employer - can return to haunt that employer. The ‘boomerang reference’ will hit hard when it returns, for if the chef can’t cook, the software programmer is incompetent or the technician proves incapable, then the new employer, that relied on the good reference can - and may well - sue.

Allied to the fact that references are a poor predictor of performance – with their hidden agendas and sub-texts – together with the employee’s right of access to what has been written about them - all makes for tricky territory when it comes to writing references.

Courtesy of the post-pandemic economic recovery, the subject of employee references has returned to the H.R. agenda. Hence, it may be timely that the risks associated with ill-considered references resurfaced recently, when an Adjudication Officer at the WRC awarded a woman six months’ salary ‘as a proportionate and dissuasive award’ for the ‘earth shattering’ bad reference that she had been given (ADJ-00024794).

This case rings a range of legal bells, or questions pertaining to references, that employers might do well to consider. These can be summarised as follows:

1. Must references be provided?
2. What should and should not be in a reference?
3. What’s ‘best practice’ and the legal scene with references?

 1. Must References Be Provided? ⚓︎

There is no statutory entitlement to a reference from one’s current or previous employer and few employment contracts include the right to one for departing employees. For example, though the Central Bank of Ireland’s fitness and probity regime obliges regulated financial service providers to make all reasonable efforts to obtain references from former employers or other relevant persons, there is no corresponding obligation to respond to a reference request. So, if no response is received, the new employer is entitled to hire the employee, as long as they have made reasonable efforts to obtain a reference from the previous employer. In such circumstances, if the employer is unable to obtain a reference for whatever reason, it must simply record the steps taken to obtain one.

However, an obligation to provide a reference may arise if it is an implied term of an employee’s contract and standard custom and practice. That is, if an employer has provided references in the past, this may establish an implied term through custom and practice and an employee may successfully argue before a third party that a reference is an implied term and condition of their employment, particularly if:

1. There was a contract of employment in existence;
2. That contract is in respect of an employee type for whom it is normal practice to require a reference from a previous employer before an employment offer can be secured. Related thereto, case precedent indicates that one cannot demand a higher standard of reference in respect of a prospective employee than that which the employer is prepared to give the same employee when they are leaving (i.e. the employer cannot have two standards); and
3. It can reasonably be expected that the employee won’t secure employment unless their employer provides a satisfactory written reference. In a similar vein, inferences may be drawn from a refusal to provide a reference, which may also give rise to a successful claim.

Discrimination and References

It is also evident that if one provides a reference for some employees, they should do it for all, without discrimination. This was apparent in the Gannon v Milford Care Centre (DEC-E2004-048) case, where the Equality Tribunal held that the failure to provide a reference for a person (who was on long term disability) was deemed less favourable treatment on the grounds of disability. The precedent tallies with the seminal Coote v Granada Hospitality Ltd (EUECJC – 185/97) case in the UK, that ended up being referred to the European Court of Justice. It was eventually settled via a £195,000 out of court payment. So, employers should be careful when refusing to provide a reference where that refusal can be linked to one or more of the discriminatory grounds set down in the 1998-2015 Employment Equality Act.

 2. What Should and Should Not Be In A Reference? ⚓︎

According to Ireland’s Citizens Information Centre, arising from an employer’s duty of care to an employee and their prospective new employer, references must be true, fair, accurate and not misleading. Should the reference provided be unfair or inaccurate and give rise to loss (e.g. of a job offer), the employer may be successfully sued for negligence. Indeed, should one deem the reference to be defamatory, the Centre advises that one may sue the employer under the Defamation Act 2009. It also notes that if one’s employer gives a misleading reference then the new employer can sue for negligence (e.g. if the reference claims that one has skills that they don’t actually have

UK Precedents

An employer’s duty of care in the provision of references came into focus in the UK in Spring v Guardian Assurance plc & Others [1994 IRLR 460 HL]. In this case the employer provided a reference stating that ‘he is a man of little or no integrity and could not be regarded as honest’. The reference was described by the High Court as ‘the kiss of death’, whilst the House of Lords held that in the event of a reference being clearly inaccurate and the employee suffering loss as a consequence, the relevant employer may be liable for that loss. This principle was reinforced by the UK’s Court of Appeal (in Bartholomew v The London Borough of Hackney & Another 1999 IRLR 246), which held that not only must a reference be accurate, but it must also be fair.

This requirement - that a reference be true and fair - also featured in the subsequent UK case of TSB Bank v Harris (2000 IRLR 157 EAT). Ms Harris, who worked as an investment adviser for the TSB applied for a new job with the Prudential. On request, the TSB provided the Prudential with a reference, which stated that 17 complaints had been made against her, 4 of which were upheld. As a consequence, the Prudential declined to employ her. However, on being told of these complaints, Harris was shocked, as she hadn’t been made aware of them nor given an opportunity to respond to them. As a result, she resigned from the TSB and claimed that she had been constructively dismissed. The Employment Tribunal and the Employment Appeals Tribunal agreed with her, upholding her complaint on the basis that the TSB was in breach of an implied term of trust and confidence for an employer to ensure that any reference given is fair and reasonable.

Notably, for the numerous employers persisting with references that provide only basic template-type information, the complex (UK High Court) case of A B v A Chief Constable (2014 EWHC 1965 (QB)) is significant. In this case it was held that where such a (basic or minimal) reference is provided, an employer is obliged to furnish a second reference (referring to disciplinary matters against the employee that had not been disclosed in the basic reference). The High Court noted that the first (basic or minimal) reference gave a misleading impression, as it omitted mention of disciplinary charges being brought against A B. In this respect the Court pointed to a more onerous public law duty on the Chief Constable (who provided the reference), to act with honesty and integrity in the provision of more than a standard reference.

The essentials governing the content of a reference were clearly enunciated in the 2018 UK High Court Hincks v Sense Network Ltd [EWHC 2018 533 QB] case, involving a claim of negligent misstatement arising from a negative reference. The judgement confirmed that employers must take particular care when expressing opinions in employee references, as an employers’ obligations extend to:

1. conducting an objective and rigorous appraisal of facts and opinion, particularly negative opinion, whether those facts and opinions emerge from earlier investigations or otherwise;
2. taking 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;
3. 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; and
4. taking reasonable care to ensure that the reference is fair, and not misleading either by reason of what is not included or by implication, nuance or innuendo.

Irish Precedents

As noted above in respect of the WRC ADJ-00024794 case, the subject of references has featured before third parties in Ireland. For example, in 2012 the HSE was directed by the Labour Court to pay €10,000 to a social worker as her ‘reference contained inaccurate and incorrect information about her work performance and employment record. Despite the complainant’s best efforts to have it removed or corrected the reference was retained on file and was available to any other employer that considered offering her employment thereby severely prejudicing her prospects of finding permanent employment in a major area of her chosen profession. The Court takes the view that this was a severe wrong perpetrated on her by her employer that was compounded by the manner in which it dealt with her after the inaccuracies were brought to its attention’ (AD1248).

Coincidentally, in the same year the HSE found itself on the right side of a decision from the Information Commissioner in respect of 2 ‘Reference Check Forms’ completed by the employee’s (HSE) managers. In this case the Commission concluded that it would expect the applicant to show that the opinions contained therein were flawed, by reason of the total inadequacy of the underlying factual information, or because of the existence of bias or ill will or incompetence or a lack of balance or necessary experience in the person forming the opinion, or because of some other particular factor which would render the opinion dangerous to rely upon. However, the employee failed to show any such deficiency. Hence, the HSE’s refusal to remove the references from the record was deemed justifiable (Data Protection Commissioner decision 120016 – Ms C v The Health Service Executive South).

Can Employees Access A Reference?

Under the General Data Protection Regulation and the Data Protection Act 2018, employees are entitled to access information held about them, including their personnel records and written and (if recorded) oral references. However, the aforementioned Citizens Information Centre notes that though in most cases one may view personal data where someone has stated an opinion about an employee (such as a reference), one may not access it if the opinion was given in confidence or on the clear and explicit understanding that it would be treated as confidential.

However, it would be wise to note that this curious caveat does not tally with a 2007 decision from the Information Commissioner (in yet another HSE case), which held that a balance has to be struck between the public interest in preserving confidence and the right of members of the public to information about themselves. Hence, in this case the Commissioner concluded that ‘there is an equitable obligation on the HSE to ensure its dealings comply with fair procedure (which, in this jurisdiction, has a constitutional dimension). While the HSE is bound by an equitable duty of confidence vis a vis the Organisation (which supplied the reference letter sought by the claimant), the extent of that duty is conditioned by the rules of equity’.

So, whilst the HSE was bound by a duty of confidence not to disclose the reference’s contents to someone other than the claimant, it could not be required ‘to adopt a position which is itself at odds with the requirements of equity. It would have been entirely legitimate for the HSE to divulge to Ms Y the substance of whatever comments were made about her by the Organisation’ (Data Protection Commissioner decision 060030 – Mrs. Y v Health Service Executive).

Warning!

Hence, when writing a reference, employers should be mindful of the aforementioned data protection legislation, that allows employees to see and be provided with a copy of any such reference. The position is somewhat different for ‘expressions of opinion’, that are given on the understanding that the reference/opinion will be treated as confidential. In such cases the employee may not be entitled to a copy. However, the Data Protection Commissioner has confirmed that in such circumstances there is a high threshold to be met and that simply marking the reference as ‘confidential’ may not be sufficient for it to avail of such privileged private status. In response, some employers use the text of the reference to state that the content is confidential, noting the special reasons for this request therein and looking for an acknowledgement from the prospective employer as to the confidential character of the reference.

3. What’s ‘Best Practice’ And The Legal Scene With References? ⚓︎

Employers can minimise the prospect of successful claims via a written policy that adheres to the following practices:

1. Only nominated/designated personnel should be authorised to provide references and employees should refrain from providing personal or character references for colleagues;
2. Apply a set reference format that is limited to confirming factual matters (e.g. employment dates, role, responsibilities and duties) and avoid unsubstantiated opinions re. performance or conduct;
3. Inform all of the organisation’s policy of only providing generic references and apply this policy consistently;
4. No ‘special categories of data’ (as defined in the Data Protection Act 2018 and the General Data Protection Regulation) should be included in the reference (e.g. union membership, medical info.).

So, based upon case law evidence, whilst there is no need to provide a full and comprehensive account of the employee's employment record, there is an obligation to ensure that it is reasonable and fair in all the circumstances. That is, the employer should take reasonable care to ensure the information contained in the reference is true, accurate and fair and makes no defamatory statements. This obligation can be challenging where there are disciplinary, performance and/or absenteeism considerations. In such circumstances employers should ensure that references are true, accurate and fair.

For example, if employees are aware of and engage with the organisation’s performance appraisal or management system, the inclusion of performance ‘issues’ must have been made clear to them during their employment, or if an employee was absent from work on sick leave for a lengthy period, one may include the fact that the employee was absent on sick leave, albeit not disclose the associated illness.

Finally, for those choosing to provide oral/verbal references, the advice is to confine comments to confirmed/accurate facts. That is, opinions should be avoided, together with anything that one wouldn’t put in writing. And ‘to be sure, to be sure’, it is also advisable to record when and what info. was provided to whom. This should subsequently be sent to them (i.e. confirming the conversation and put on the employee’s personnel file).