12 Tips to Avoid the Legal Pitfalls when Writing References

In Hincks v Sense Network Ltd [2018] EWHC 533, Mr Hincks was an independent financial adviser. His employer provided him with a reference which mentioned an internal investigation that had criticised his conduct. Mr Hincks said the investigation had been a sham and brought a claim for negligent misstatement. He argued that the reference writer should have checked the investigation was fair before expressing a negative opinion.

The High Court dismissed his claim, ruling that there would be ‘formidable difficulties’ if reference writers had to inquire into the fairness of old investigations. It found that it was difficult to
prescribe the standard of care that a reference writer should take because it depends on the particular situation. However, it did identify four features of the duty to provide a reference that
is fair and not misleading.

4 Steps to Expressing a Negative Opinion
Based on the High Court’s guidance, if you want to express a negative opinion in a reference, you must:

  1. Objectively and rigorously appraise the facts and opinions about the employee, particularly negative opinions.
  2. Take reasonable care to satisfy yourself that the facts in the reference are accurate and that you have a legitimate basis for any opinions you express.
  3. If the opinion is based on an earlier investigation, take reasonable care to review the underlying material so you understand the decision and can be satisfied that it had a legitimate basis.
  4. Take reasonable care to ensure that the reference is not misleading either through omitting information or by implication, nuance or innuendo.

12 Tips to Meet Your Duty of Care
Follow these pointers to avoid the legal pitfalls when providing an employee reference:

  1. Make sure you comply with any special rules for your sector: for example, employers in the finance industry are required to provide full and frank references.
  2. Consider not supplying references at all: in the absence of any specific regulatory requirements, if you don’t want to provide a reference, you don’t usually have to. However, if you choose not to, you should:
    • Be consistent: if you normally provide a reference and turn down one request (perhaps to avoid saying something negative), the employee might claim discrimination or breach of the duty of trust and confidence.
    • Check the employee’s contract: rarely, there may be an express term stating that they are entitled to a reference.
    • State in your letter to all prospective employers who ask for a reference that it’s your policy not to give them: otherwise, your failure to supply a reference could imply you had problems with the employee. They might then bring a claim against you if they are not hired.
  3. Consider providing just bare factual references: in line with many employers, an alternative is to simply state the individual’s position and start and end dates. State that it is
    your policy to provide only a factual reference to avoid any inference that you’re trying to hide something.
  4. Take care over settlement agreements: sometimes, an employee may want you to give them a favourable reference as part of a settlement or to say that the reason for dismissal was redundancy rather than, say, incapacity. In this case:
      • You may wish to warn the employee that, with factual references becoming increasingly common, a glowing testimonial may, in fact, arouse prospective employers’ suspicions.
      • If possible, try to get the individual to agree to a simple, factual reference with no negative comments.
      • Only agree to a positive reference to avoid a threatened tribunal claim if this will not mislead a prospective employer.
  5. Avoid victimisation: if an employee is alleging discrimination, take extra care when providing a reference. If it’s inaccurate, they might claim victimisation.
  6. Have a clear policy: if someone in authority assures an employee that they will give them a good reference, the organisation must fulfil this promise. You should, therefore, draw up a policy on who can give references (e.g. only HR) and what they should include, and make sure managers understand this. Advise managers to avoid giving verbal references.
  7. Aim for fairness: if you have a policy of giving full references, take care to ensure any negative points are accurate and, if you can, include positive information to ensure balance.
  8. Don’t cite unproven allegations: if you believe there has been misconduct but you haven’t investigated or proved this don’t mention your suspicions in the reference.
  9. If you don’t know an employee well, say so: you can use this to justify why you’re not giving a more detailed reference.
  10. Mark references ‘Private and confidential: for the addressee only’: this will minimise the risk of personal data being shared and preserve legal privilege.
  11. Beware of subject access requests (SARs): if a former employee asks to see a confidential reference you’ve written, you don’t have to disclose this but their new employer may have to. This is another reason to make sure the reference is accurate or the employee could sue you.
  12. Consider including a disclaimer: it’s common to state at the end of references that you’re not liable for inaccuracies. However, bear in mind you can’t avoid liability for making a statement
    you should have known wasn’t true.

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