The Scottish Council for Voluntary Organisations is the membership organisation for Scotland's charities, voluntary organisations and social enterprises. Charity registered in Scotland SC003558. Registered office Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB.
When and how to give a reference
Seeking a reference
An employer is under no obligation to obtain a reference for a potential new employee, but it is common to seek at least one reference and to make any job offer conditional on receipt of a satisfactory reference. If the reference obtained is unsatisfactory the employer will usually be entitled to withdraw the offer, even if the employee has already commenced work. However, if the reference is discriminatory, the new employer may itself be liable under the Equality Act 2010 if it withdraws the offer on the basis of the discriminatory reference.
It is for the new employer to decide whether a reference is satisfactory. However, to avoid any uncertainty over the meaning of “unsatisfactory” new employers may wish to say “subject to receipt of a reference that we consider satisfactory” in their offer letters, rather than “subject to receipt of a satisfactory reference”.
If the offer letter sent to the employee makes no mention of satisfactory references, the employer will be in breach of contract if it receives an unsatisfactory reference and withdraws the offer. This may mean that the organisation is required to pay the employee’s notice, or allow the employee to work out any notice.
Duty of care
If an employer provides a reference, it is under a duty to provide one which is in substance true, accurate and fair and can be sued for negligence if it does not do so and causes either the employee or the prospective employer loss. An employee who has had a job offer withdrawn, because of an unfavourable reference, can bring a claim for the loss suffered. An employer who has relied on a statement by the previous employer and suffered a loss may also be able to bring such a claim. This is perhaps most likely to apply where the employer does not mention some act of fraud or dishonesty of which it is aware and the employee goes on to commit fraud or other dishonesty at the new employer.
The reference must not give an unfair or misleading impression overall, even if its discrete components are factually correct. Provided it gives a balanced view of the employee, it does not need to be comprehensive. An employer will not be liable for omitting relevant information unless the reference gives a misleading impression because of the omission. For this reason it may not be safe for an employer to provide even a bare reference for an employee who has been dismissed for gross misconduct, without mentioning that dismissal.
If the employer decides to provide a reference, it should ensure that the best person placed to comment on the employee either prepares or approves the reference. The employer should also ensure that the person preparing the reference on behalf of the organisation has been trained to do so in accordance with its procedures and has all the relevant information regarding the individual.
Any reference should be addressed to the organisation which has requested it. General references marked "to whom it may concern" are best avoided.
Contractual term
Employers will usually be obliged to give a reference where there is an express or implied contractual term to this effect.
Settlement agreements will often contain an express term saying that a reference will be given, and sometimes that the reference will be in a particular form. In entering into such an obligation, an employer should make it clear that it reserves the right to alter the reference as appropriate (or not to give a reference at all) if facts emerge after the agreement has been entered into which mean that the reference, or part of the reference, is no longer true.
An implied contractual term will arise if it is normal practice in the type of work covered by the employee's contract. A contractual term requiring an employer to give a reference may be implied if it is the employer’s standard practice to provide a reference, or if it is normal practice in the type of work covered by the employee's contract for a reference to be given and it would be unreasonable to expect a new employer to take on the employee without a reference.