01 October 2018
Job References – What You Need to Know
In an ever competitive job market it is vitally important for you to know your rights when it comes securing that all-important new role and a reference can make all the difference.
The Advisory, Conciliation and Arbitration Service has recently released new guidance on job references which can be found here.
References are important for your future prospects and it is advisable that any issues surrounding your reference are addressed before the termination of your employment where a direct relationship still exists between you and your employer.
Read our reference-related commonly asked questions below.
Does your employer have to provide a reference?
Generally, there is no legal obligation on an employer to provide a reference. One exception to this is certain employees in regulated businesses (see below).
If your employer has a policy this should always be followed to avoid inconsistencies. Providing a reference to one employee and not another could give rise to a claim for discrimination or victimisation.
What can be included in a reference?
Employers are under a legal obligation to ensure that the reference is a true, accurate and fair reflection of your employment.
The majority of references given are factual. This means that they include only basic facts such as your employment dates and job title. As this type of reference is now so common, it is unlikely that any negative inference will be drawn by your new employer.
References containing more detail may include:
- Answers to specific questions that a potential employer has asked such as levels of absence and the reason for leaving.
- Details about your skills and abilities.
- Details about your character, strengths and weaknesses.
What impact can a reference have on a job offer?
There are two types of job offer that can be made:
- A conditional job offer. This can be withdrawn if a certain condition is not met, for example, a satisfactory reference.
- An unconditional job offer. This cannot be withdrawn and is formed on your acceptance.
Most job offers are conditional on satisfactory references being taken.
Your new employer should always obtain your permission before they make the reference request.
Can an employer give a bad reference?
Your employer can give you an unfavourable reference but only if they believe it to be true and accurate and have reasonable grounds for that belief.
If your employer does include opinion, this should be supported by facts and should not give a misleading impression.
If you have had long periods of absence or issues surrounding your performance, it is advisable to find out what your employer’s policy is on the provision of references before your departure. If your employer had cited your absence or poor performance and it is related to a protected characteristic under the Equality Act 2010 (for example disability or pregnancy), they could be acting unlawfully. Many employers decline to give information about a former employee’s sickness record as a matter of policy.
What are my rights if I have been given an unfavourable job reference?
- Retrieve a copy of the reference from your employer to find out what has been written. If your employer refuses, consider making a subject access request under the General Data Protection Regulation.
- If the reference is inaccurate or untrue, discuss this with your employer to find out if you can reach a mutual agreement as to what will be said in future references.
- You should also speak to your prospective employer to discuss any concerns and suggest ways to alleviate these, such as offering the job on a probationary period in the first instance.
- If the matter is not resolved informally, you may be able to claim damages in court. You will need to show that the information was misleading or inaccurate and you have suffered a loss, such as withdrawal of a job offer.
If the negative reference is an act of victimisation (perhaps because you had raised a grievance about discrimination with your former employer) or a detriment because you were a whistle-blower, you may bring a claim in the Employment Tribunal.
Can a reference be agreed as part of a settlement agreement?
It is common for a settlement agreement to include an agreed reference.
Due to the risks to employers of providing detailed references, it is usual that only a factual reference is agreed when negotiating a settlement. In many sectors detailed references are so rare now that it can cause a prospective employer to question why the individual has been able to obtain such a reference. However, in some professions and sectors a more personal reference may be expected.
Regulated References - what are they?
All firms regulated by the Financial Conduct Authority and the Prudential Regulation Authority are required to conduct appropriate due diligence on candidates. Mandatory obligations are placed on firms such as banks, building societies and insurers, to prevent individuals with poor records from moving between financial institutions undetected.
Any candidates applying for the following roles will require a regulatory reference:
- Senior management functions under the Senior Manager and Certification Regime (SMR) and the Senior Insurance Managers Regime (SIMR);
- Significant harm functions under the SMR;
- Significant influence functions under the SIMR; and
- Notified Non-Executive Director roles under the SMR or SIMR.
What will my former employer(s) include in a regulated reference?
A mandatory template is used with questions about specified categories of information covering the last six years of your employment history.
All information must be disclosed that is relevant to determine whether you are “fit and proper” to perform your function. The information that must be required as a minimum is:
- An assessment of the Fit and Proper Test covering honesty, integrity and reputation, competence and capability and financial soundness;
- Any outstanding liabilities;
- Any outstanding or upheld complaints.
A firm is also obliged to state whether there has been any breach of regulatory rules which has led to disciplinary action. As a result, if you have been suspended, issued with a written warning, been dismissed or your remuneration has been reduced or recovered by your employer, this will be included in the reference. Suspensions purely for the purposes of investigation are not required to be included.
Can a regulated reference be varied if I am entering into a settlement agreement?
The rules governing regulated references expressly prevent employers from entering into an agreement that limits their liability to disclose information about your conduct.
It is standard practice for an agreed reference to be included as part of a settlement agreement but firms will not be able to fetter their obligation to provide the mandatory information. You can still ask to see what it is they intend to say so you can ensure it is accurate.