Employee references: Addressing concerns that arise after the employee has left employment

26 October 2011

In the recent case of Jackson v Liverpool City Council [2011] EWCA Civ 1068, the Court of Appeal decided that the Council had not breached its duty of care by providing a reference that referred to concerns about its former employee that had arisen after his departure and had not been investigated.

If an employer agrees to provide a reference then it is under a duty of care to provide one that is accurate, true and fair; this principle was established in the case of Spring v Guardian Assurance. In this recent case of Jackson, the Court of Appeal considered a reference which was considered to be true and accurate, but not fair.

Facts
The Claimant was employed by the Council as a social worker. When he left, a satisfactory reference was provided to his new employer. Subsequently, concerns were raised within the Council about his work by his former colleagues who had taken over his caseload. When the Claimant applied for a further position 12 months later, the Council provided a further reference which noted these concerns. The new reference stated that the concerns had not been investigated as the Claimant had left the Council’s employment before any process had been instigated. The referee also telephoned the potential employer to confirm the position. The Claimant was unsuccessful in his application for a new post and was unemployed for a year.

The Claimant pursued a claim for negligent misstatement against the Council. Although these claims often arise as a result of an employment relationship, they are claims in negligence and are pursued in the courts, rather than the Employment Tribunal.

The initial High Court decision found that the reference was true and accurate, but not fair on the basis that it was inappropriate to refer to allegations that had not been investigated.

The Decision
The Council successfully appealed to the Court of Appeal. The Court of Appeal found that the reference made it clear that the Claimant had left before the Council could investigate and that had he remained in its employment, a performance management plan would have been instigated, rather than formal disciplinary action. The Judgment noted that it would be difficult for the former employer to answer the questions asked without referring to the allegations that came to light after the employee had left. The Court looked favourably on the fact that the referee contacted the potential employer to explain the allegations.

Comment
This case illustrates the risks faced when providing references. Employers are not obliged to give a reference (although, in some cases, failure to do so could in itself be a breach of an employer’s duty). Where an employer agrees to give a reference, it should ensure that its staff are trained in drafting references and can justify and provide evidence for their comments if subsequently challenged. Particular care should be taken in cases where concerns have arisen post termination and employers should take specific HR or legal advice about how to address such concerns both in terms of any further investigation and addressing them in a subsequent reference. Failure to take the necessary steps could result in claims for negligent misstatement and potential discrimination/victimisation claims.

Report by Kate Duffy and Rachel Johnson of Hill Dickinson LLP