Tiptoeing through the employee reference

Providing a job reference can be a famously tricky business, says Clive Day. Employers who provide a reference owe a duty of care to the employee and the prospective employer.

But how easy is this to do in practice? If your former employee left on good terms and was an exemplary employee the balance should be relatively easy to strike.

On the other hand, the recent case of Bullimore v Pothecary Witham Weld Solicitors (& Others) reminds us that giving a reference against the background of an employee dispute can feel more like a high wire act.

The (old) 2004 claim
The Claimant, Ms Bullimore, had been employed by a firm of solicitors called ‘Witham Weld’ (which later became ‘Pothecary Witham Weld’). After a dispute with the firm, she resigned in 2004. She subsequently brought claims (including a claim for sex discrimination) which Witham Weld settled.

Although this initial complaint sex discrimination was settled, it’s important to appreciate that (i) making the allegation of sex discrimination as she did and (ii) her tribunal complaint for sex discrimination both remained acts separately capable of protection in their own right.

If an employer ‘victimises’ an employee (or a former employee) because they previously brought or threatened discrimination proceedings, this can form the basis of a separate claim. It was against this background that Witham Weld were later asked (in 2008) to provide a reference for Ms Bullimore.

The 2008 reference
Ms Bullimore’s new prospective employers in 2008 were Sebastians solicitors. The firm contacted Witham Weld to obtain a reference. The reference they received was in very negative terms.

Significantly, when asked how the end of Ms Bullimore's employment had come about, Witham Weld did not confine ityself to saying simply that she had resigned. Instead the firm went on to give details of the tribunal proceedings she had brought against it, which included a claim for sex discrimination.

Sebastians was concerned about this reference. The firm looked into her 2004 claim against Witham Weld, and went as far as obtaining a copy of her claim form. They also telephoned Witham Weld to make further enquiries.

As a direct result of the reference and information received from Witham Weld, the firm decided to change the terms of their job offer to Ms Bullimore. They introduced a six month probationary period, during which Ms Bullimore would be liable to dismissal on one month's notice.

Ms Bullimore refused to accept these revised terms. A subsequent Employment Tribunal found that Sebastians ‘were not prepared to strive to resume the relationship, because they had come to the view that the claimant was trouble’.

The second (2010) claim
Following the breakdown of her negotiations with Sebastians, Ms Bullimore brought proceedings before the Employment Tribunal for victimisation against both her former employer (now called Pothecary Witham Weld) and her prospective employer, Sebastians.

Importantly, the tribunal found both parties liable for victimising Ms Bullimore under the Sex Discrimination Act 1975.

The reference given by the former employer (Witham Weld) was described by the tribunal as both ‘damaging’ and ‘negative’. The reference was found to be directly influenced by the fact that Ms Bullimore had previously brought sex discrimination proceedings against the firm.

In deciding upon the motivation for the negative reference, the tribunal viewed as significant the fact the reference went beyond what was necessary to give an accurate picture of employment. Importantly, an earlier reference given to a different firm (called Carter Bells) contained none of the negative details later provided to Sebastians.

In that context, details of previous litigation looked to the tribunal like a gratuitous and unnecessary act of victimisation.

So what view did the tribunal take of Sebastians, the prospective employer? The firm’s actions (changing the terms on which employment was offered) were also held to have been influenced by the fact that Ms Bullimore had brought previous sex discrimination proceedings.

Those previous proceedings were found to be an underlying motivation to carry out what (in effect) amounted to the withdrawal of the firm’s job offer. This again amounted to unlawful victimisation for bringing previous tribunal proceedings.

The financial implications
Both Pothecary Witham Weld and Sebastians were held liable to pay Ms Bullimore significant compensation.

As the prospective employer, Sebastians settled the claim after the finding of victimisation and chose to pay Ms Bullimore £42,500 rather than face a separate ‘remedies’ hearing. This sum included a substantial amount on account of lost earnings, even though Ms Bullimore had never worked for them.

Initially, Pothecary Witham Weld, appeared to have more limited financial exposure. Although the firm was held liable for victimising Ms Bullimore, the initial tribunal limited the award to £7,500 on account of ‘injury to feelings’.

Worryingly for employers, however, the Employment Appeal Tribunal reversed this decision and clarified losses could be claimed for loss of earnings as well. So if an ex-employer unlawfully ‘victimises’ a former employee (giving them a poor reference because they previously complained of discrimination) that ex-employer can also be liable for loss of earnings where the job is then withdrawn.

A discriminatory decision by another party to withdraw the offer of employment doesn't get the ex-employer off the hook, or (in legal terms) ‘break the chain of causation’.

Lessons for the referee
What are the lessons we should take from this case? In order to act consistently and fairly, a key requirement is to have a clear policy on references.

The key points that any policy should cover include:

• Identifying who can and who cannot give references (should this, for example, be limited to senior management).

• The nature and scope of any references provided – should it confirm only the employee's details or should it give a subjective assessment of the employee's work and character?

• Providing strict guidelines restricting the circumstances when and who can provide oral references (when, and in what terms, they will be given).

• Putting checks in place to ensure that all the facts in the reference are accurate.

• Ensuring that the reference does not present an unfair or misleading impression of the employee.

• Raising awareness that when recruiting, all applicants should be treated equally regardless of whether a reference refers to there having been complaints of discrimination or other matters raised by a candidate.

• Avoiding the inclusion of any information when giving a reference about the employee's poor performance if the employee has not yet been approached about the standard of his or her work

• The inclusion of a standard disclaimer on liability arising from the content of the reference

Clive Day is an associate solicitor in the Employment Department of HBJ Gateley Wareing LLP