When an employee gives you notice that they will be leaving at the end of the term specified in their contract of employment, you know that they will probably be requesting that you give them a written reference to pass to their new employer. You may also receive reference requests for past employees from their new employer.
You may think this is a perfectly natural request that you can easily fulfil, but there are some pitfalls to be avoided, as well as legal implications. Occasionally you may get such a request from a landlord or a bank considering issuing a loan or setting up a new account. Apart from a few exceptions in specific industries, you are not obliged in law to give references and are free to have a policy of not doing so. In this way you cannot be accused of unfair treatment of an individual if you refuse to give them a reference.
Wanting to be Helpful
However, you may prefer to be helpful to employees wishing to move forward with their careers by writing a reference for them. If you do so, make sure it is fair and accurate. Otherwise, if the impression you give is misleading in any way, you could be in trouble down the line. You can include a disclaimer of liability for any errors, but this would not always help if a former or current employee or someone else decides to take legal action.
Getting Agreement from the Employee
You must never issue a reference to a third party unless the employee has agreed. This is because it will inevitably contain some personal information and details the individual may wish to withhold. You could be in breach of the Data Protection Act if you release this information without the consent of the person concerned.
If the reference request enquires about the mental and/or physical health of the individual, you also need to get their explicit consent to divulge it. It’s best to get this in writing as evidence in case it should be needed later. Even if you are asked to state a number of absence days without giving reasons for it, you risk a claim for disability discrimination.
Sometimes an employee with whom you have been in dispute will have made a settlement agreement with you, and it may have set out the wording for a reference to be given.
Finally, your local bookkeepers would advise you that it is usually wise to send a reference to a specific addressee, rather than ‘to whom it may concern’. If it were to fall into unscrupulous hands there could be further trouble for you.