liability to former employees

Posted on June 23, 2011 by Martin Malone

Most employers know that there is no general legal requirement to give a reference for an ex-employee. Most also know that if they do give one, they may face problems if it is misleading or wrong and the ex-employee cannot get another job as a result. The High Court has recently taken this further. It has held that an ex-employer was liable to a former employee for damaging information about the former employee which was not in a reference at all. You can read the full judgment here.

Mr McKie was given a good reference when he left Swindon College. This helped him get a new job at Bath City College.

Shortly afterwards the HR Manager at Swindon College sent an email to his equivalent at Bath stating that Swindon College would not have Mr McKie on the premises due to safeguarding concerns for the students and serious staff relationship problems which occurred whilst he was employed there. The email stated that no formal action was taken due to his timely departure. Bath City College dismissed Mr McKie and he sued Swindon College.

He won. All evidence pointed to Mr McKie being an exemplary professional. The contents of the email were fallacious and untrue. Nothing justified sending it and the procedures at the college giving rise to it being sent were slapdash, sloppy, and failed to comply with any sort of minimum standards of fairness. The email would obviously impact upon his employment, yet there was no formal discussion, meeting, examination of personnel record, or recording of processes leading to the decision to send it.

The High Court found that Swindon College owed a duty of care to Mr McKie, and that it was "guilty" of having breached that duty. The fact that the breach was not in a formal reference did not let Swindon College off the hook.

The moral for employers is obvious. Make sure your staff do not make disparaging remarks about ex-employees, at least unless those comments are true and can be shown to be true.

Liability for discrimination resulting from a reference

Posted on January 25, 2011 by Martin Malone

It used to be the case that an employer could claim legal “privilege” concerning the contents of a reference on the basis that the purpose of a reference is to provide a “no holds barred” assessment of the individual concerned. In recent years that protection has been eroded so that the provider of the reference can be held liable and required to pay compensation to both the subject of and the recipient of the reference if the opinions expressed do not stand up to scrutiny.

In Bartholomew -v- London Borough of Hackney (1999), a decision I remember well, the claimant alleged race discrimination and his claim was settled and he took voluntary severance. He was facing allegations of financial irregularities. He applied for another job and the former employer said that he took voluntary severance when he was facing disciplinary proceedings for alleged gross misconduct. The job offer was withdrawn and he sued for negligence. Mr Bartholomew lost because the former employer had a duty to the prospective employer to provide a reference which was in substance true, accurate and fair and did not give a misleading overall impression of the individual concerned. There existed a duty to the prospective employer and this meant that the old idea of protection when providing a reference was vulnerable.

This was a big change and it more or less inevitably followed that the duty to a prospective employer applied equally to a former employee. This was duly confirmed in the key decision in Spring -v- Guardian Assurance which was a decision of the House of Lords and confirmed that the employee also had a potential claim for economic loss resulting from negligent misstatement.

The new authorities were tested in Cox -v- Sun Alliance Life Limited. Mr Cox was employed in a sector in which favourable references are more or less a precondition to employment. On the termination of his employment he agreed terms in a COT3 (via ACAS) which included a broadly complimentary reference. However, Sun Alliance provided a further reference which suggested that that he was suspended and would have been dismissed were he not allowed to resign. The case went to the Court of Appeal which found that the employer had relied in giving the reference on investigations which were not concluded. Accordingly the employer was negligent in reaching conclusions which were expressed in the reference.

This potential liability has now been extended to the sphere of compensation for victimisation as a result of the decision of the President of the Employment Appeal Tribunal in Bullimore -v- Pothecary Witham Well and another. Ms Bullimore appealed against the award of compensation awarded to her following a successful claim against her former employer. She maintained that, following settlement of her claim, she was offered another job but this was converted to being subject to a six months’ probationary period after the former employer referred to a poor relationship with the firm and her claim.

There were technical issues but the upshot was that the provider of the reference was liable for compensation resulting from victimisation based on discrimination.

All our subscribers are advised about and assisted with the problems which can arise from providing references. This comes with the service and the problems which can be encountered as outlined above are therefore eliminated before they even arise.

newsletter – job references

Posted on October 26, 2010 by Martin Malone

As is well known there is no general rule that an employer must give a reference for an (ex-)employee, but if he does give one he must take reasonable care to ensure that it is fair. A case at the end of September in the Employment Appeal Tribunal shows how important it can be to take care when giving a reference for an ex-employee.

Solicitor Ms Bullimore was employed by a firm of solicitors from 1999 to 2004. After she left she claimed unfair dismissal and sex discrimination and an “out of court” settlement was agreed. She then got a job with another law firm, the first one providing a “bland reference”.

Some four years later she was made redundant and was offered a job by a third firm of solicitors, subject to receipt of satisfactory references. The first firm provided a reference but this time included a number of negative comments about Ms Bullimore. Specifically the reference noted that she had brought employment tribunal proceedings against the first firm. It also referred to her poor relationship with the partners and said that “she could on occasion be inflexible as to her opinions”. As a result of this reference the third firm changed its job offer to include a six month probationary period. Ms Bullimore was not happy with this and the resulting impasse led effectively to the job offer being withdrawn.

Ms Bullimore then sued both firms of solicitors and the individual partner in the first firm who had given the reference. She settled her claim against the firm which had withdrawn its job offer (for a substantial sum – £42,500) but her claim against the first firm, and the individual partner who had provided the reference, went to an employment tribunal. She won, essentially on the basis that she had been victimised for having brought a sex discrimination claim and the tribunal awarded her £7,500 for injury to feelings.

Ms Bullimore was not satisfied with the £7,500 and appealed to the EAT. Although the EAT refused to increase the award for injury to feelings it referred the case back to the employment tribunal to consider an award for loss of earnings, rejecting the first firm of solicitor’s argument that the damage was too “remote” for them to be liable. The EAT stated that, as a matter of principle, “When an adverse reference, given for an illegitimate reason, leads to an employer deciding not to make, or to withdraw, an offer to a candidate it is hard to see why that consequence should be regarded as too remote to attract compensation from the giver of the reference …”.

There was one crumb of comfort for employers in that the President of the EAT noted that the original employment tribunal’s conclusion “might, without reference to the detailed facts, seems rather harsh: the position of employers who are asked for references for employees with whom they have fallen out is a very delicate one…”. Nevertheless the overriding message for employers is to take great care when providing a reference for an ex-employee.

This is an item from our October 2010 newsletter. If you are interested in subscribing to our monthly newsletter please click here.