References are a standard requirement for job applicants and a bad or inaccurate job reference can end your career or get you blacklisted in your industry. A job reference is used by your prospective employer to check that you are who you say you are, and that you have the competencies that you say you have. Your current employer does not have to provide a reference (except in particular industries), but where they do the reference must be accurate, fair and not misleading. A prospective employer can also make criminal record and health checks as well as checking on your immigration status. The outcomes of these checks and your job reference generally determine whether or not you are offered the job.
A request for a reference from an employer can come from you, a prospective employer or a third party such as a bank or a landlord. Your employer does not have to give you a reference unless there is an agreement to do so under a Settlement Agreement or a COT3. If your employer is regulated by the Financial Conduct Authority or the Prudential Regulation Authority they must provide a reference if you are an “approved person” and your new job involves the performance of an approved function. Once your employer chooses to give you a reference then they must take account of the law and their obligations to provide a fair and truthful reference.
Your old employer owes a duty of care to your prospective employer as well as to you. Your employer must not give a negligent or careless reference to your prospective employer. In the case of Hedley Byrne & Co v Heller & Partners Limited  the old employer gave a reference which did not mention that the employee was actually incompetent. Lord Morris of Borth-y-Gest said, “…..it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise”.
The reference must not be misleading. In Bartholomew v London Borough of Hackney , Mr Bartholomew had been suspended for allegations against him of financial irregularities, and brought a claim for race discrimination in the Employment Tribunal. The case was settled and Mr Bartholomew was allowed to take voluntary severance and the disciplinary process was ended. When Mr Bartholomew applied for another job Hackney Council gave a reference to his prospective employer which said that Mr Bartholomew had taken voluntary severance whilst suspended for alleged gross misconduct. The prospective employer withdrew the job offer and Mr Bartholomew sued Hackney Council for negligence. The Court did not agree with him because even though the reference must be, true, accurate and fair it should not give a misleading impression. The reference from Hackney Council was found to be true, not inaccurate or misleading. If Hackney Council had not mentioned the disciplinary proceedings, they would have been in breach of their duty of care to the prospective employer.
There is a difference between a bad reference, and a reference that is inaccurate. Your employer can give a reference that correctly describes you and your competencies, as well as your working relationship even if it includes things that you are not happy with. It can be a bad reference but so long as it’s true, there’s not a whole lot you can do about it. If on the other hand, your employer gives a reference that is inaccurate and the job offer is withdrawn as a result, depending on the facts, there are a number of avenues that you can use to get legal redress.
In Spring v Guardian Assurance Plc & Others , the House of Lords said that an employer giving a reference is under a duty to the former employee to take reasonable care in compiling it, or in obtaining the information on which it is based. If the old employer does not do so, then the employee can sue the old employer in the County or High Court for providing an inaccurate reference, where that reference is given negligently and the employee suffers economic loss as a result. In this case, Mr Spring had been dismissed from his position as sales director and office manager for Guardian Assurance. When he applied for other jobs, Guardian Assurance gave him a very negative reference stating that Mr Spring was “…..a man of little or no integrity and could not be regarded as honest”. Mr Spring sued for negligent misstatement, claiming damages to compensate the economic loss suffered due to his inability to find work. The House of Lords agreed with him that his former employer was liable and awarded Mr Spring damages for his potential lost earnings.
Lord Goff said;
“… when the employer provides a reference to a third party in respect of his employee, he does so not only for the assistance of the third party, but also, for what it is worth, for the assistance of the employee. Indeed, nowadays it must often be very difficult for an employee to obtain fresh employment without the benefit of a reference from his present or a previous employer.”
“… when such a reference is provided by an employer, it is plain that the employee relies upon him to exercise due skill and care in the preparation of the reference before making it available to the third party.”
“… the central requirement is that reasonable care and skill should be exercised by the employer in ensuring the accuracy of any facts which either (1) are communicated to the recipient of the reference from which he may form an adverse opinion of the employee, or
(2) are the basis of an adverse opinion expressed by the employer himself about the employee.”
An employer can be liable for negligent misstatement even though those statements were not made in a reference. In McKie v Swindon College  , Mr McKie worked in higher education management. In 2002, he left Swindon College to work at bath College with a glowing reference. In 2007, he left Bath College to work at Bristol College and then accepted a position with the University of Bath in 2008 . His new role involved him making site visits to Swindon College. A couple of weeks after he had started in this new role the University of Bath HR Manager received an email from the HR Manager at Swindon College to the effect that Swindon College would not allow Mr McKie on their premises because of safeguarding concerns. There had been no mention of these concerns in Mr McKie’s previous references from Swindon College and no investigation of safeguarding allegations. As a result Mr McKie was dismissed from his new post at the University of Bath. The High Court said that Swindon College was liable for Mr McKie’s loss as a result of negligent misstatements made about him to a prospective employer. For such a claim to succeed, the prospective employer must have relied on the negligent misstatement in dismissing or withdrawing the job offer. In Legal & General Assurance Limited v Kirk , the Court of Appeal said that if an employer makes a statement about a former employee that falls short of a formal reference and is not in fact relied upon by any third party, the employee will not have a claim for negligent misstatement.
Your old employer does not have to give a full and comprehensive reference. All that matters is that it is accurate. In Kidd v Axa Equity & Law Assurance Society plc , Mr Kidd worked for Axa Equity & Law, and left to join Allied Dunbar. At the time he left, Axa Equity & Law was investigating his his sales methods following seven complaints. Mr Kidd did not know about these complaints against him. was not aware of all the complaints and had no reasonable opportunity to deal with them. The Financial Conduct Authority rules at the time required that references should contain a “full and frank disclosure of all relevant matters believed to be true”. When Allied Dunbar asked for a reference, Axa Equity & Law sent a questionnaire-type reference response and two letters, as a result of which Allied Dunbar withdrew the job offer. Equity & Law said that the investigations were not complete, and did not answer a question about Mr Kidd’s honesty. They did not mention that he had an excellent sales record, that the financial package he was being investigated about was an approved product, and that he had not been interviewed about the allegations which in any case, he denied. Mr Kidd sued Axa Equity & law for negligence. The court disagreed because they said that there was no duty of care to provide a full reference. The duty on the old employer is to provide a reference that is not misleading and in which any misleading information would not be likely to affect the decision of the prospective employer to the detriment of the employee. In this case, the court said that the reference was not misleading and there had been no negligence.
In Cox v Sun Alliance Life Limited , the Court of Appeal said that where an employee leaves during incomplete disciplinary proceedings, the old employer must make sure it genuinely believes the information that it supplies for a reference is true, have reasonable grounds for that belief and have carried out as much investigation into the matter as is reasonable in the circumstances before divulging any unfavourable information in a reference.
If you are still employed when the negligent reference is given and have two years continuous service, it may be possible to sue in the Employment tribunal for constructive unfair dismissal on the basis that the reference is in breach of the duty of trust and confidence that your employer owes to you. In TSB Bank PIc v Harris , Ms Harris received a final warning from TSB and started looking for another job. TSB gave a reference to a prospective employer which mentioned 19 customer complaints about her, although Ms Harris only knew about two complaints against her. She did not get the job, and when she found out that it was because of the reference, she resigned and claimed unfair constructive dismissal. The Employment Appeal Tribunal agreed that the action of TSB was a breach of trust and confidence because TSB had disclosed complaints to others which Ms Harris had not been given a chance to answer.
Under the Equality Act 2010 it is unlawful for an employer to discriminate against a former employee where the discrimination “arises out of and is closely connected to” the employment relationship. The employment provisions of the Equality Act 2010 cover discrimination or victimisation because of a protected characteristic if your old employer refuses to give you a reference or provides negative content in a reference when your employer would usually do so, because you have;
In Woodward v Abbey National Plc , the Court of Appeal said that a person can claim against a former employer that person has been subjected to a post-employment detriment for making a protected disclosure under s47(B) Employment Rights Act 1996.
If you believe that your employer has given you a bad reference, it is, in the first instance, advisable to retrieve a copy from them or the recipient of the reference to find out what has been said. You can make a subject access request to your prospective employer under the Data Protection Act 2018 and GDPR. The Data Protection Act gives your former employer an exemption from disclosing references supplied, however this exemption does not apply to your prospective employer who has received the reference.
Once you have received a copy of the reference, you should submit a letter before claim to your ex-employer.
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