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On the one hand, I don’t want to stop my ex-employee moving on, but I don’t want to mislead the new employer either. What shall I do?”
Generally speaking as an employer you are not (with limited exceptions below) under a duty to provide any reference for a current or former employee. If you do decide to give a reference there are a few basic rules to remember:
If you give a misleading reference to a new employer then that employer can claim damages against you if they rely on the reference and suffer loss. Likewise it is possible for an ex-employee to claim damages if they suffer financial loss as a result of a misleading or inaccurate reference.
As a result of these risks many employers these days give what is known as a ‘factual’ or ‘standard company reference’ for all employees, which simply sets out the basic facts such as the employee’s name, dates of employment and job title on leaving. These basic neutral references are bland and can be unhelpful but are also increasingly used within the motor industry and elsewhere. It is often the ‘safe’ option for an employer, worried about the risks.
When do I absolutely have to give a reference?
Rarely, an express or implied term in the employee’s contract can oblige an employer to give a reference. If someone has been assured of a reference by the employer and if that has been relied upon, then that can cause liability if subsequently withdrawn. Occasionally, regulatory requirements oblige an employer to give a reference, but that is not common.
Although there is no general duty to give a reference, remember also that if an ex-employee has brought or is threatening to bring a discrimination claim or whistleblowing claim, then a refusal to give a reference in those circumstances can give rise to a claim in employment law for ‘victimisation’ and that is a claim that can be brought in the Employment Tribunal.
In the above question at the start of this article for example, if the employee had been complaining about health and safety or that he had been subject to discrimination (and that is the real reason why the employer considered him not very good) then a refusal to give a reference in those circumstances could land the employer in a Tribunal claim.
Remember also there are some good practice guides available to help you. See for example the Information Commissioner’s website or the ACAS website.
Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.
Paul Carroll, Solicitor, Motor Industry Legal Services
Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.