In brief, no. With limited exceptions there is no direct obligation on an employer to provide a reference for a current or former employee and they can decline to do so. However, not providing a reference will inevitably cause damage to the prospects of the individual concerned and may be challenged if the employer otherwise does give – or has given – references. In this regard, the policy of the employer should be consistent or it could lead to allegations of discrimination or breach of the implied duty of trust and confidence.
In the financial services sector, licenceholders may be required to provide a reference or other information about a current or former employee if the prospective new employer is considering appointing the individual to certain offices or positions including “key person” roles. Where this applies, the licenceholder that is the current or former employer of the individual needs to provide “all relevant facts of which it is aware” including information relating to “fit and proper” status and any relevant outstanding or upheld complaints about that person[1]. The Isle of Man Financial Services Authority recommends that financial institutions request a reference from a job applicant’s current and previous employers covering, as a minimum, the last 10 years of employment[2].
When giving a reference, a legal duty is owed by an employer/former employer to take reasonable care in its preparation. The duty extends to ensuring that the content of the reference is true, accurate and fair and does not give a misleading impression[3]. The duty of care will also involve making reasonable enquiry into the factual basis of the statements in the reference. Absent any specific regulatory or sectoral requirements[4], there is no obligation to provide any detail in the reference or for it to be comprehensive[5].
An employer or former employer that provides a reference may also owe a duty to the recipient unless it makes it clear that no legal responsibility is accepted through use of an appropriate disclaimer.
In addition to the above, there are certain GDPR related issues that may require consideration regarding employment references. Sometimes, for example, the request for a reference seeks information about absence levels or performance. The giver of a reference in those circumstances will need to assess whether it wishes to provide all the requested information. If it does so, care will have to be taken so as not to disclose special category data (for example, compare attendance information with divulging the reasons for sickness absence) as the conditions for processing – including disclosing or sharing such information – are more stringent than for “ordinary” personal data. There are particular issues with attendance or performance levels impacted by the effects of a disability and/or pregnancy related sickness – if in doubt about providing a reference (or its scope/content), we would recommend taking legal advice.
Finally in terms of GDPR, employers should bear in mind that a reference will include personal data and may be disclosed if the individual to whom it relates makes a request for subject access to the recipient of the reference. There is an exemption from the right of access for the giver of a confidential reference[6] but, in practice, it does mean that references provided may see the light of day even if marked confidential. On this basis, it is recommended that the content of a reference be factual, objective and referable to evidence in support of any statements or opinions expressed.
Where a current employer receives a data subject access request from an individual which includes their personnel information, they will need to give consideration to any duty of confidentiality owed to the giver of a reference and may decide to redact the identity of the originator or other information which could identify them, though this will be a matter on which they may wish to take their own advice.
Practical tips on providing a reference
- If there is a policy on giving corporate references (eg who gives them, what they should cover), ensure that any reference given complies with the policy.
- When providing a brief factual reference only (eg dates of employment and job role(s)), explain that it is the employer’s policy to provide a reference in this format.
- Ensure that any statements made are accurate and consistent with the reason for any dismissal reasons provided to the employee or former employee.
- Check that the overall picture the reference gives is balanced and not misleading and does not unfairly present a poor impression of the employee or former employee.
- Consider the GDPR angle and the controller’s obligations under the Applied GDPR (eg in terms of having a legal basis for disclosing/sharing information about the individual concerned).
- Make sure that any comments about performance or absence do not contravene equality legislation.
- Mark the reference “private & confidential – addressee only”.
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References:-
[1] Rule 7.11 Financial Services Rule Book 2016 (as amended)
[2] See also https://www.internationalemploymentlawyer.com/financialservices?f%5B0%5D=jurisdiction%3A890 (select Isle of Man – Q2)
[3] Spring v Guardian Assurance [1995] 2 AC 296 and Bartholomew v London Borough of Hackney [1999] IRLR 246
[4] (NB education references in relation to which there are also some stipulations)
[5] Kidd v Axa Equity and Law Life Assurance Society plc [2000] IRLR 301
[6] Paragraph 17 of Schedule 9 to the GDPR and LED Implementing Regulations 2018
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Useful Resources:-
CLA 2005/74 Moorcroft v MFS (3) Limited t/a Manx Family Services (Isle of Man High Court, Common Law Division)
