Employee character references - employers beware

In Jackson v Liverpool City Council the Court of Appeal has given some helpful guidance to employers on the provision of references in circumstances where there are outstanding but uninvestigated allegations about a former employee.

Mr Jackson worked for Liverpool City Council for 12 years. When he left Liverpool it provided a satisfactory reference to his new employer, Sefton Borough Council. However one year later Mr Jackson applied for another job within Sefton which required a further reference from Liverpool. This reference raised a concern about Mr Jackson’s performance, who did not obtain the employment he sought and was subsequently unemployed for a year. Mr Jackson brought a claim against Liverpool for damages in relation to the reference.

The second reference differed from the first because after Mr Jackson had left Liverpool concerns had been raised about his work. However Liverpool had decided that the allegations could not be investigated because Mr Jackson was no longer an employee. When communicating with Sefton in response to the second reference request Liverpool made it clear that although issues in relation to Mr Jackson’s work had come to light they had not been investigated. Liverpool also made it clear that it was not able to answer the specific questions asked by Sefton: “Would you re-employ him? Do you know of any reasons why we should not employ the applicant?” in either a positive or negative manner.

The Court of Appeal concluded that the reference was true, accurate and fair. Accuracy and truth go to the facts which form the basis of the reference and fairness goes to the overall balance of the reference and any opinion contained within it.

The Court of Appeal considered it key that the reference made it clear that Mr Jackson left Liverpool before the matter could be investigated and that investigation would have been fraught with legal and practical difficulty. It also highlighted that not providing a reference at all might have put Mr Jackson in a worse position. Liverpool had made it clear that the allegations had not been investigated and that if the allegations had been upheld they would have resulted in a performance improvement plan rather than formal disciplinary action. The communications between Liverpool and Sefton which took place around the same time as the provision of the reference were highly material and in the view of the Court formed an integral part of the reference.

In conclusion, when providing references employers should have regard to the general rule that an employer is under no duty to provide a character reference for an employee or ex-employee, but if they do they should take care to provide a reference which is true, accurate and fair. Where there are concerns over an employee or ex-employee’s conduct or behaviour an employer should disclose those concerns as part of the reference but ensure that it does so in a measured and unprejudiced way, making it clear where concerns have not been investigated and that therefore there is no assumption of guilt or impropriety.

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