Employment References: Employer's Guide

References seem straightforward but can create legal problems. Understanding your obligations helps you give references safely - or decline them appropriately.

No Obligation to Give References

General Rule

There's no legal duty to provide references for ex-employees (with some exceptions).

Exceptions

Financial services: FCA-regulated firms must give regulatory references for certain roles.

Settlement agreements: If you agreed to provide a reference as part of a settlement.

Contractual obligation: If the contract promises a reference (rare).

Implied Terms

Some old cases suggested an implied duty to give references in certain circumstances, but this is rarely relied upon now.

If You Choose to Give a Reference

Your Duty of Care

If you give a reference, you owe a duty of care to:

The ex-employee:

• Reference must be true
• Must be fair and accurate
• Must not be misleading

The new employer:

• Reference must be accurate
• They're relying on it to make decisions
• Negligent misstatement claims possible

What "Fair and Accurate" Means

• Based on facts you can verify
• Gives a balanced picture (not selectively negative)
• Opinions supported by evidence
• Not misleading by omission

Example

Unfair: "John had 3 disciplinary warnings" (true, but one was 10 years ago and he's been exemplary since)

Fair: "John had a recent disciplinary warning for attendance. Prior to this, his record was good."

Types of References

Basic/Factual Reference

Most common now. Confirms:

• Dates of employment
• Job title
• Sometimes salary

Pros:

• Low risk
• Quick to provide
• Hard to challenge

Standard Reference

Confirms facts plus:

• Main responsibilities
• Reason for leaving
• May include performance/conduct

Pros:

• More helpful to new employer
• Still manageable risk if careful

Detailed Reference

Comprehensive assessment:

• Performance evaluation
• Strengths and weaknesses
• Recommendation

Pros:

• Most helpful Cons:
• Highest risk
• Time-consuming
• Harder to evidence

What to Include

Safe to Include

Element	Notes
Dates of employment	Factual
Job title	Factual
Main duties	Brief, factual
Salary (if asked)	Factual
Reason for leaving	If known and not disputed

Include Carefully

Element	Caution
Performance	Must be evidenced
Conduct	Must be fair and accurate
Disciplinary	Consider if relevant
Sickness	Rarely appropriate
Recommendation	Only if genuine

Don't Include

• Speculation
• Rumour or gossip
• Unsubstantiated allegations
• Spent disciplinary warnings (usually)
• Health information (usually)
• Protected characteristics

When to Decline

Legitimate Reasons to Decline

• Company policy (factual references only)
• You don't have enough information
• Potential legal proceedings with the employee
• Risk of defamation
• Insufficient knowledge of their work

How to Decline

"Thank you for your request. It is our company policy to provide basic confirmation of employment dates and job title only."

Or simply don't respond (though this may harm the ex-employee).

When Not to Decline

• Discriminatory reasons
• Victimisation (e.g., because they brought a claim)
• To cause harm

Defamation Risk

What Is Defamation?

A statement that:

• Harms someone's reputation
• Is communicated to a third party
• Is not true

Qualified Privilege

References have "qualified privilege" meaning you're protected if:

• You have a legitimate interest in giving the information
• The recipient has a legitimate interest in receiving it
• The statement isn't malicious

Losing Privilege

You lose protection if:

• You act maliciously
• You include irrelevant defamatory material
• You share more widely than necessary

Practical Protection

• Stick to facts
• Be balanced
• Have evidence for opinions
• Don't include unnecessary negative information

Negligence Claims

From Ex-Employee

Can claim if:

• You owed a duty of care (you gave a reference)
• You breached that duty (reference was inaccurate/unfair)
• They suffered loss (didn't get the job)

From New Employer

Can claim if:

• You provided information they relied on
• Information was negligently inaccurate
• They suffered loss (hired unsuitable person)

Defence

• Reference was true and fair
• You took reasonable care
• They didn't rely on it
• No loss caused

References After Settlement Agreements

Agreed Wording

Settlement agreements often include:

• Exact reference wording
• Commitment to use that wording
• Agreement not to deviate

If You Breach

• Employee may have breach of contract claim
• Undermines the settlement
• Reputational damage

Sticking to the Agreement

• Keep agreed wording on file
• Train relevant staff
• Use it exactly as agreed
• Verbal enquiries get same information

Receiving References

Due Diligence

When hiring:

• Request references
• Follow up if not received
• Check they're genuine
• Consider what they don't say

Interpreting References

Watch for:

• Very brief responses (may indicate problem)
• Careful wording
• What's not mentioned
• Gaps in employment

Remember:

• Many employers only give basic references
• Absence of detail doesn't mean problems
• Consider overall picture

Verifying References

• Call to verify (speak to actual person)
• Check company exists
• Compare to CV claims
• Trust your instincts if something seems off

Subject Access Requests for References

References You've Received

If employee asks to see references you received about them:

• Generally exempt from disclosure
• Only while given in confidence

References You've Given

If ex-employee asks what reference you gave:

• They can ask the recipient
• Or you may choose to provide a copy

Reference Policies

Having a Policy

Benefits:

• Consistency
• Reduced risk
• Clear process
• Staff know what to expect

Policy Content

1. Who can give references (usually HR/managers only)
2. What will be included (facts only, or more)
3. Standard wording (template)
4. Approval process
5. Record keeping

Sample Policy Clause

"References will only be provided by the HR department. Our standard reference confirms dates of employment and job title only. Any request for a more detailed reference must be approved by the HR Manager."

Practical Tips

Giving References

1. Use a standard template
2. Stick to facts where possible
3. Have evidence for any opinions
4. Get approval before sending
5. Keep a copy
6. Be consistent

Handling Difficult Cases

Poor performer:

• Can mention if fair and evidenced
• Consider just giving basic reference
• Don't make things up or exaggerate

Dismissed for misconduct:

• Be very careful
• Consider just confirming employment
• If including, be factual and fair

Settlement agreement in place:

• Use agreed wording exactly
• Don't deviate

They were fine but you parted badly:

• Don't let personal feelings affect reference
• Be professional and factual

Reference Letter Template

Basic Reference

To Whom It May Concern

Re: [Employee Name]

I confirm that [Name] was employed by [Company] from [start date] to [end date] in the role of [job title].

Yours faithfully

Standard Reference

To Whom It May Concern

Re: [Employee Name]

I confirm that [Name] was employed by [Company] from [start date] to [end date] in the role of [job title].

In this role, [he/she/they] was responsible for [brief description of duties].

[Name] left our employment to [reason if known and appropriate to share].

Yours faithfully

Checklist

Before Giving a Reference

• Do we have to give one?
• What's our policy?
• What can we factually verify?
• Is there a settlement agreement with agreed wording?
• Any risk factors (dismissal, grievance, claim)?
• Has appropriate person approved?

When Giving a Reference

• Stick to facts where possible
• Have evidence for opinions
• Be fair and balanced
• Don't include unnecessary negatives
• Keep a copy
• Send to appropriate person only