Employment References – A Risky Business?
20 April 2016
As a result of a recent UK decision, we review risks associated with providing employment references and with seeking to withdraw a job offer on foot of a negative employment reference. We explore steps that organisations can take to protect themselves against adverse findings of discrimination, breach of contract or defamation.
A recent Employment Appeal Tribunal ("EAT") decision in the United Kingdom demonstrates the risks of employment references, both for those who issue them and those who rely on them. In this case, Ms. X suffered from a “disability” and had prolonged periods of absence throughout her employment with Company A.
Company A mentioned Ms. X’s absence in her employment reference and also commented that it felt she was unsuitable for the role with Company B. As a result, Company B withdrew the job offer it had made to Ms. X. The EAT found both Company A and Company B were guilty of discrimination. Although the case was in the United Kingdom, had the same facts come before the Workplace Relations Commission in Ireland, a similar outcome may have resulted.
In Ireland the Employment Equality Acts, 1998-2015 (the “EEA”), prohibit discrimination on nine grounds - age, civil status, disability, gender, family status, religious belief, race, sexual orientation and membership of the Traveller community. The protections from discrimination apply to employees, applicants for employment and independent contractors. Employers need to be mindful of what they include in employment references, whether in writing or verbal.
Employment references can be a sensitive subject, particularly where the employee has left under unfavourable circumstances. In Ireland there is no statutory obligation on an employer to issue an employment reference and many employers opt for a “Statement of Employment” – which gives basic, objective details such as the employee’s name, term of employment, title, duties etc. Whilst this level of detail is unlikely to get the author into legal difficulty, it is of little value to a prospective employer.
There are various factors to consider when deciding whether to give employment references, and getting the balance right by being fair to the employee and prospective employer, whilst at the same time protecting your organisation, can be difficult. If an employer wishes to disclose comprehensive, subjective details about an employee, it is important to be mindful that the details are in no way connected to the grounds of discrimination set out under the EEA. It is also important that the employment reference is fair and accurate to ensure you are protected from a potential defamation claim. It is worth bearing in mind that employees and applicants can gain access to any personal data an organisation has relating to them under the Data Protection Acts 1988 and 2003.
Dealing with the net question, can a prospective employer withdraw a job offer for an unsatisfactory reference? In short, the answer is yes, but the right is not unconditional. Where the reasons for the withdrawal are objective reasons, i.e. qualifications, technical ability, skills etc., and are not directly or indirectly associated with the nine protected grounds, then the prospective employer can withdraw a job offer. If it relates to a discriminatory ground, this will be more difficult. In addition and depending on the circumstances of the case, the prospective employer may be under a contractual obligation to pay the employee the notice entitlement set out in the contract of employment.
The content of this article is provided for information purposes only and does not constitute legal or other advice.