However, for an employee who is seeking new employment, a reference from an existing or former employer can be an essential component in obtaining a new position.  Indeed, many prospective new employers will only offer roles subject to receiving satisfactory references.  Taking this into account, Settlement Agreements are also increasingly making provision for employers to provide references to prospective new employers and sometimes to other third parties as well.

Personal opinion on what a reference should contain will differ, of course, but numerous employers now purely provide a statement giving the name of an employee, his or her job title, his or her dates of employment and potentially some other minor information in support of these details.

It should be noted, however, that some employers may be obliged to provide other, potentially more detailed information to regulators such as the Financial Conduct Authority and the Prudential Regulation Authority regarding their employees and former employees.

But what happens when the contents of a reference are disputed?  What obligations does an employer owe to an employee or former employee?  And who decides what is a “reasonable” reference?

This dilemma came before the High Court in the case of Hincks v Sense Network Ltd [2018].

In the judgment of the Court, Mrs Justice Lambert agreed that, whilst an employer may owe a duty to its regulators, it will also owe a duty to exercise reasonable skill and care in providing a reference for an employee or former employee that is true, accurate and fair.

In the context of this particular case, in which the former employee had been the subject of an investigatory process which had culminated in his dismissal, Mrs Justice Lambert considered that it would be impractical and would likely lead to unreasonable delay if a reference writer were required to review the fairness of internal processes (such as an investigation and/or disciplinary procedure that had led to an employee’s dismissal) before providing a reference.

On the basis of the facts and evidence presented to her, Mrs Justice Lambert ultimately held that the former employee in this case had not been subjected to bad faith or detriment arising out of the law of contract or the law of tort as a result of the former employer’s decision to dismiss him or for the content of a reference that it provided for him.

Whilst accepting that it would be disadvantageous to attempt to provide specific guidance for the drafting of any reference, Mrs Justice Lambert held that the reference writer should:-

(1) Remain a step removed from facts or opinions about the employee (even if the reference writer knows those facts or shares those opinions).  The reference writer should perform a detailed analysis of any facts or opinions (particularly negative facts or opinions), regardless of whether they have come to light as a result of earlier investigations or otherwise;

(2) Be reasonably careful in ensuring that the facts contained in the reference are accurate and true and that any opinions expressed in the reference can be properly justified;

(3) Be reasonably careful in considering and reviewing the details of earlier investigations so that the reference writer can properly understand the basis for any opinions expressed as a result of those investigations.  The reference writer must also be satisfied that any such opinions expressed in the reference can be properly justified, and

(4) Be reasonably careful in ensuring that the reference is fair and does not mislead the reader, either in terms of information or details that are not included in the reference or by implication, subtlety or innuendo arising out of what is included in the reference.

However, the Court accepted that this was not an exhaustive list of the considerations that a reference writer may need to take into account in preparing each individual reference.

Comment

On the basis of the facts in Hincks alone, it is understandable why many employers will purely provide basic information relating to an employee’s employment when preparing a reference.

However, where more is required (particularly from a regulatory point of view), especially where the employment has not ended on a particularly satisfactory note, it can be very difficult for a reference writer to provide a reference that is true, accurate and also fair.  Arguably, this can be so regardless of whether the reference writer has been involved in investigating the employee or not.

The clear aim of Mrs Justice Lambert’s judgment is to impress upon employers the need to be cautious and to be prepared to justify potentially everything that is contained in a reference.

We can only add that reference writers are acting on behalf of an employer when preparing a reference and should therefore strive to remain impartial in the comments that they make.

This article is not a substitute for legal advice on specific facts and circumstances. It is designed as a free update on the law at the time of publishing. Knight Polson Limited trading as QualitySolicitors Knight Polson accepts no responsibility for reliance on this article and recommends that you seek independent legal advice on your specific circumstances prior to taking any steps.

If you have any questions or would like to discuss the contents of the above article, please do not hesitate to contact us on knightpolson@qualitysolicitors.com or 023 8064 4822.