Court of Appeal decision gives guidance on references

A recent Court of Appeal decision has provided some guidance on how an employer should deal with a reference request when allegations about an ex-employee come to light after they have left. 

In the case of Jackson v Liverpool City Council, Mr Jackson was refused employment with a new employer on the basis of a reference given by his former employer. This reference referred to negative reports and allegations about Mr Jackson which had not been investigated and could not therefore be substantiated.

The High Court held that Liverpool was in breach of its duty of care in that the reference was true and accurate, but not fair. It found that it was unfair to refer to the allegations without investigating them or giving Mr Jackson a chance to answer them.

Liverpool appealed and the decision was overturned by the Court of Appeal, which ruled that the reference was fair and not negligent because it was made clear to the prospective employer that the issues raised about the employee were allegations only which had not been investigated.

The Court of Appeal did not agree with the High Court that Liverpool could have refused to give a reference as it noted this was likely to have led to negative conclusions being drawn anyway.  It also noted that the organisation which requested the reference could have discussed the allegations with Mr Jackson.

Kevin McCavish, a partner at Shoosmiths, commented: “If an employee leaves in circumstances where there are material questions over their performance or conduct, or these subsequently arise after they have left, employers should disclose such issues accurately to any perspective new employer. 

“However, they should also be careful to make absolutely clear that such allegations have not been investigated and that no assumptions can be made.  Given the possibility of incurring liability in this area employers should have robust internal procedures for giving references in respect of ex-employees in place.”