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For Your Reference

20th April 2018

By Sophie Banks, Solicitor in the Employment team

The willingness of an employer to give a reference relating to an existing or former employee has diminished over the years, for the fear of reprisal if the employee does not like or agree with what they say in it. An employer is under no obligation to provide a reference (other than in certain areas such as finance and education), but if they do, it has a duty of care to provide a reference which is true, accurate, fair and not misleading. If the reference is inaccurate, the employer can be sued for negligent misstatement in the civil courts. Many employers therefore choose only to provide very limited factual information, such as the former employee’s dates of employment and job title, to minimise the risk of such a claim being made.

In the recent case of Hincks v Sense Network Ltd, Sense Network decided to go that step further and provide a reference containing opinions about Mr Hincks, and specifically negative opinions the referee had formed following an investigation Sense Network had undertaken into Mr Hincks’ conduct. Mr Hincks brought a claim for negligent misstatement against Sense Network arguing that, where negative opinions were based on the findings of an investigation, the referee must ensure that the investigation had been carried out in a “fair and reasonable” manner. He believed the investigation undertaken by Sense Network in this case was a sham and therefore the reference had given a misleading and inaccurate impression of him.

The High Court disagreed with Mr Hincks, and dismissed his claim. It found that, where a reference contained negative opinions which were founded on an investigation and its findings, it was not necessary for the referee to be satisfied that the investigation had been “fair and reasonable.” The court held that when preparing a reference, the standard of care to be exercised by the referee should be expressed in broad terms, and the extent of that duty will depend on the particular facts of each case. Any “red flag” issues such as any glaring errors in the investigation or matters that cast doubt on its reliability should prompt further enquiry. However, if there were no such "red flag" issues that caused the referee concern, there was no duty on them to examine the adequacy and fairness of the investigation.

This case again highlights the pitfalls of an employer providing personal opinions in a reference, but is useful to illustrate the limits to an employer’s duty of care when they do. Whatever your organisation’s policy regarding the giving of references, you must make sure that the policy is applied consistently for all existing and former employees to avoid allegations of a breach of the implied term of trust and confidence or discrimination.

The contents of this update are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this update. © Mundays LLP 2018.

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