Q - Do employers have to provide references for employees or for ex-employees?

A - There is generally no legal obligation on employers to provide references for employees or ex-employees. Employers can refuse to provide a reference, although it is customary for references to be given. Employers ideally should have a clear policy to outline the circumstances in which references will be given.

Policies should be consistent and fair or there can be breach of contract or discrimination allegations. An employer must ensure that refusal to provide a reference has not been made on grounds which might be considered to be discriminatory, such as religion, sex, race, age, disability or sexual orientation.

Q - Are there exceptions to the general rule that employers don't have to give references?

A - The general rule does not apply where the employment is regulated by the Financial Services Authority (FSA). There are specific rules imposed in this area, so information is available for prospective employers to ensure the honesty and integrity of individual advisors who are regulated by the FSA.

If there is a contractual obligation to provide a reference, refusal may constitute a breach of contract.

Such a contractual obligation may not need to be a written term in the contract of employment if the employer's established standard practice is to provide references.

Q - Are there legal issues that employers need to be aware of in giving references?

A - An employer giving a reference may be liable not only to the employee but also to the prospective employer who receives the reference. Other areas of law that employers need to be aware of are defamation, negligent misstatement and data protection.

An employee or the recipient of a reference can sue a referee for negligence if a reference is inaccurate and leads to financial loss.

There is a general duty owed by the referee to the employee and recipient to take reasonable care and ensure the information in the reference is fair and accurate.

References usually involve the use of personal data and may cover sensitive matters regarding individual employees, such as sickness records, so employers must ensure they are acting in accordance with data protection requirements.

* Tom Devlin is a solicitor in the employment law team with Blackett Hart & Pratt LLP Solicitors. Contact him on 0191-221-0898.