One of the key assessment tools for ensuring a firm is taking on the right person is a previous employer’s reference, but how many firms actually request such references, and when they do how many actually get a reference that is worth the paper it is written on?
Potential risks
Many employers take the view that as providing a reference is optional, they will not provide one due to the potential risks that this carries, for example, if they say the wrong thing, they could be pursued by the ex-employee for compensation.
Even though law firms are not mandatorily required to provide references, it makes sense for them to do so in order for appropriate screening to be carried out on new employees; if firms follow best advice in relation to writing references, the risks of doing so will be very low.
Any law firm that does provide a reference must take reasonable care in ensuring the information provided is true, accurate and fair; they must also take care to ensure that information provided does not give an impression that is misleading, or they risk being sued for something known as “negligent misstatement”.
Law firms must avoid making any comments in a reference that could amount to discrimination, for example, consideration should be given before remarking on the employee’s performance, attendance or sickness absence where there is a risk that these comments may give rise to disability discrimination. In the case of Pnaiser v NHS England and another UKEAT/0137/15, it was found that a negative verbal reference given in relation to a disabled employee’s sickness absences, which resulted in a job offer being withdrawn, had amounted to discrimination arising from disability.
Law firms that provide references are data controllers under the Data Protection Act as they process personal data. The Information Commissioner publishes guidance on compliance with data protection legislation in relation to references, which states that employers should maintain a clear references policy and should not provide confidential references unless consent to do so has been obtained from the employee; this is normally provided by the employee to the new employer or recruitment agency as part of the recruitment process.
Firms should consider the following when providing a reference:
- Have an effective reference policy in place that is strictly followed.
- Obtain consent from the employee that is subject to the reference request.
- References must be true, accurate and fair; there is a duty of care owed to both the employee and their new employer.
- Information given regarding the employee’s performance or absence should not breach disability discrimination legislation.
- If reference is made to allegations of misconduct that have not been investigated this must be stated.
- Written references should be marked as “strictly private and confidential” and addressed to the individual who has requested it.
- Law firms may want to consider including a disclaimer of liability within the reference; such disclaimers may have limited effectiveness but there may be certain situations in which a disclaimer does assist in limiting liability.
References can be brief or detailed:
- Basic (factual) - a short summary of employment, for example, job title and dates of employment.
- Detailed (character reference) - can include:
- answers to questions from the employer requesting the reference.
- details about the employee’s skills, ability and experience.
- details about the employee’s character, strengths and weaknesses relating to their suitability for the new role.
- how often the employee was off work.
- disciplinary details.
- the reason why the employee left the job.
The taking up of employment references is not only required for anti-money laundering purposes but also for professional indemnity insurers, accreditation bodies and financial lenders, who need firms to reduce the risks of internal fraud.
Some law firms choose to handle disciplinary matters by allowing an employee to ‘leave quietly’, and provide them with a good reference, however, this approach is highly likely to be found in breach of the SRA Codes of Conduct and Enforcement Strategy, for example, section 3.9 of the Code of Conduct for Firms states, “You report promptly to the SRA, or another approved regulator, as appropriate, any facts of matters that you reasonably believe are amounting to a serious breach of their regulatory arrangements by any person regulated by them (including you) of which you are aware”. A law firm providing such a reference could be pursued by the new firm if it is later found that the employee is not as good as the reference provided suggested.