REUTERS | John Kolesidis

Is it time to reform employment references?

In most cases, a worker has no right to receive an employment reference when they leave their job. Whether this is adequate is up for debate. 

  I am determined to make the UK the best place to work and grow a business  – including levelling the playing field between employees and employers. 

These words in late 2019 from Andrea Leadsom, former Secretary of State for Business, Energy & Industrial Strategy, form part of a wider proposal to reform the responsibilities of employers when it comes to the end of the employment relationship. 

It follows an inquiry conducted by the Women and Equalities Select Committee into the use of non-disclosure agreements (NDAs) in employment. The inquiry considered whether employers should be prevented from covering up, or retaliating against wrongdoing by buying silence or refusing to provide an employment reference. 

What is an employment reference? 

An employment reference is essentially one business providing certain information about a candidate to another business. Typically, this includes confirming the role and dates that they were employed. There is no standard form or set procedure for providing such a reference, but it is typically requested in writing. 

A positive recommendation from another business can be highly influential in the recruitment process. Conversely a refusal to provide a reference may create suspicion and can be detrimental for a candidate seeking employment. 

What are the current obligations on employers? 

There is ordinarily no obligation to provide an employment reference (other than in regulated industries) and therefore a request for one can be refused. There are caveats to this, for example if there is a contractual agreement to provide a reference. 

If a business does provide a reference, then it has a duty to take reasonable care to ensure that the reference is not misleading or untrue; to ensure that it is accurate and fair. It does not have to provide the information requested and may simply confirm some basic information. 

A business should also be careful not to discriminate, either in their decision not to provide a reference, or in the contents of such a reference, as they risk liability for discrimination, harassment or victimisation. A clear policy is a good starting point to confirm what a worker can expect, as well as in which circumstances references may be changed or withheld. 

What is typical in practice and why? 

There is always a risk that liability flows from the provision of a reference. A reference which confirms that a worker had a poor attendance record connected with a disability could be discriminatory. An untrue statement could constitute defamation and an inaccurate reference may give rise to a claim for negligent misstatement from either the candidate or the recipient business. 

For these reasons, it is typical for an employer to provide a factual reference, commonly providing dates of employment and job title only. This reduces the risk of any adverse legal action. 

The principles governing data and the disclosure of information also apply to references and so businesses ought to ensure that they have secured the relevant consent. 

Why the need for reform? 

It has been widely publicised that some employers have abused their power in circumstances where they have tried to cover up unlawful behaviour or malpractice by pressuring workers into silence through the use of NDAs, or by withholding references. 

The fear for many workers is that if they do not enter into a confidential settlement agreement, they will forfeit any chance of being given a reference. This damages their chances of future employment. 

Reform is proposed in order to provide a fairer balance between the interests of employers and workers. 

What are the proposed changes to references? 

The recommendations from the Women and Equalities Select Committee include changes to the scope and use of NDAs, particularly in cases involving allegations of discrimination and harassment. 

It is proposed that employers should be required to provide a reference to all employees, stating at least that they worked for the business and the dates of that employment. The governments response to the committees proposal was that there was merit in exploring this further, recognising: the government can understand why this could pose a problem for victims of sex or other discrimination. The response states that the government will consult on the matter “in due course”. 

What will this achieve? 

Primarily, it will prevent an employer from damaging a workers prospects once they leave employment. It is envisaged that this will lead to a more open culture in addressing grievances and complaints of harassment and discrimination, as there are fewer risks and barriers to a worker who would previously have been reluctant to speak out. 

It also removes the bargaining power from an employer who might otherwise seek to cover up the allegations and not invest time and money in an investigation. If the wider proposals about addressing complaints of discrimination or harassment are adopted, it may be that employers are required to investigate those concerns irrespective of whether any settlement is reached. 

The governments response to the proposals from the Women and Equalities Select Committee were to suggest that the Equality and Human Rights Commission already recommends investigating concerns, but recognises the challenges in requiring a blanket mandate to investigate concerns, not least because every concern will be different. 

In short, it restricts the ability to punish complainants. The principle of open justice should be paramount and the reforms are designed to encourage businesses to recognise and address inappropriate behaviours and practices in their workplace and to be more accountable. 

With the government undecided about how to best approach the issue of workers rights post-Brexit, it remains to be seen how these proposals will develop. A Conservative government more inclined to supporting the interests of business, particularly when negotiating trade deals with the US, may shy away from implementing stronger, unionfavourable proposals, in order to ensure that trade deals are achieved

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