Providing a reference for a current or former employee might seem like a relatively straightforward task, but in actual fact references can be a legal and practical minefield for employers. Whether you’re writing a reference for a current employee or responding to a request for a former member of staff, there are a number of important considerations to keep in mind. This guide to employee references will walk you through the do’s and don’ts, helping you to stay compliant and avoid unnecessary disputes.
Are You Legally Required to Provide a Reference?
In the vast majority of cases, as an employer, you are under no legal obligation to provide a reference for a current or ex-employee. However, there are a few exceptions to this rule. Employers must provide a reference when there is a contractual obligation to do so. Additionally, if an agreed reference is part of a legally binding settlement agreement then a reference must be given, or finally when the reference request is from an employer in certain regulated sectors, for example if they are regulated by the Financial Conduct Authority, then again a reference needs to be provided. These exceptions are confirmed by ACAS guidance.
Even if you as an employer aren’t obliged to provide a reference, if you choose to write one, the reference must be accurate, fair, based on factual information and must not be misleading. By failing to follow these simple guidelines when giving a reference your business runs the risk of claims of defamation or discrimination.
Legal Compliance – Key Aspects
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GDPR (General Data Protection Regulation)
References contain personal data, meaning GDPR applies. Employers therefore need to ensure:
- The data provided regarding the employee who is the subject of the reference is accurate and up to date.
- Employees are aware that a reference is being provided and that they have given their consent.
- Sensitive personal information (such as health data) is not disclosed without explicit consent from the employee.
Employees can request to see a copy of their reference, but this doesn’t mean automatic disclosure and employees wish to view their reference may need to submit a subject access request in order to do so if their employer refuses.
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Discrimination Risks
The content of a reference must not reflect discriminatory attitudes so it is crucial to avoid:
- Making comments or disclosures in the reference about protected characteristics (for example age, gender, disability).
- Unconscious bias – even unintentional comments can carry legal consequences.
References should focus solely on objective, work-related facts.
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Defamation
A negative reference can lead to defamation claims if the employee believes the content is inaccurate or harmful to their reputation. To avoid this:
- Ensure all statements are based on verifiable facts.
- Avoid personal opinions or ambiguous wording.
For example a bad reference might be one where an employer states that performance targets were not met. There will no doubt be objective performance data and information to support that statement so whilst it is negative comment, it is not unlawful as it is based on facts.
If you’re unsure, then as many employers tend to do, stick to providing very basic information in a reference such as the employee’s job title and their dates of employment.
Common Pitfalls to Avoid
- Inconsistency – Providing detailed references for some employees but not others can lead to claims of unfair treatment.
- Over-disclosure – Sharing more information than necessary can breach GDPR or result in discrimination claims.
- Vagueness – Ambiguous statements, for example, “I cannot comment”, may lead to assumptions and potential legal risks.
Consistency and clarity are crucial. As an employer you may wish to have a company reference policy and a standard response template which all managers can use or it may be that in your business all reference requests are completed by the same person which again will provide for a consistent approach.
Handling Reference Disputes
In some cases employees might challenge the content of a reference. Here’s how to manage this:
- Review and respond – Consider their concerns carefully and check the accuracy of the reference.
- Correct errors – If an error is found, issue a corrected reference.
- Document everything – Keep records of the dispute and how it was handled to demonstrate fairness and compliance.
Employee references, when handled correctly, can benefit both employers and employees. By following best practice and staying mindful of legal issues, you can minimise risks while providing fair and balanced references. Remember, when in doubt, less is often more.
Do you have any questions about today’s blog, need help in becoming legally compliant with contracts/policies or can we support you in taking away any people pains to give you peace of mind?
If you answered yes to any of the above, just give us a call at CUBE HR on 01282 678321, or book in a FREE 30 Minute HR Health Check here FREE HR Health Check and we’ll happily give your business a full HR overview with our personal recommendations absolutely FREE!
Why not also check out last weeks blog Statutory Rate Changes In 2025 And What That Means For Employers
We also have a YouTube channel with loads of handy videos outlining various HR related scenarios.
