Foul ref
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In a ground-breaking case the Law Lords ruled that employers must take care when writing references for former employees. What effect will this have on recruitment procedures?
people are the most important asset of any business. Employees have the power to make or break a successful branch or department, and so the consequences of employee fraud and negligence can be serious for the employer. The recruitment of appropriate employees is therefore extremely important to any haulier.
A key part of the recruitment process is usually the receipt of good written references. However, in future it may be more difficult to find out who is working for you.
The background to this change is the recent decision of The House of Lords in the case of Spring us Guardian Assurance. In this case, the Court ruled that employers have a duty to take reasonable care when writing references about former staff members. The result opens the possibility for both former and existing employees to bring court actions against companies on the grounds that they have been negligent in assessing the conduct and behaviour of their employees. This is likely to change the future attitude of employers to both giving and receiving references together with reference policies generally
Consequences
The receipt of a request for a reference about an employee or an ex-employee is a common occurrence.
Ordinarily, an employer is not obliged to provide such a reference but, as the consequences of failure to do so may be grave for the employee, most employers are happy to co-operate. However, the Guardian Assurance case will raise doubts about the willingness of employers to continue with this approach in the future.
z The case concerned the liability of a finan
D cial institution for a reference provided for a
..:i . z dismissed salesman, but it is equally applicz-i
8 ble to all other employers. Spring was dis L.,
>.. missed by Guardian Assurance. He then
z applied to Scottish Amicable for a position as R a salesman. Following a request from the 1 prospective employer, Guardian Assurance supplied a reference which was described in =1 Court as The kiss of death for a man in insur
ance". Not surprisingly, the company declined Spring's application.
Spring brought proceedings against his former employers. The Court declined to imply any term into Spring's contract that a reference should be prepared with reasonable care. However, the Court found that the company did owe him a duty to exercise due skill and care in the preparation of any reference.
So how does an employer protect itself against such claims? One option would be to stop giving references; another would be to encourage the practice of giving confidential references over the telephone.
However, these are only partial solutions as employers who fail to check references may find themselves liable for any acts of negligence or criminal acts committed in the course of the employee's employment. An employer could be found to have failed to take reasonable care in his recruitment procedures if he failed to obtain written references for any position of trust.
The precise standard of care which will he expected by employers when they ask for references is unclear. I Iowever, some guidance is obtained from the case Lawton vs HOC Transhield Limited 1987.
"If an employer receives an application from another employer for a reference for departing or departed employee, it must be obvious that it is about future employment, obvious that the employee has given the former employer as support, and equally obvious shat the employee is relying on his former employer to get the facts right...The reference must be honest, accurate and not negligently written".
It is common practice for a reference to deal with the specific questions posed by the enquirer. There is considerable advantage to the donor employer in adopting a more circumscribed approach to such requests. Similarly, it is to the recipient employer's benefit to receive answers to key questions.
An employer should consider dealing with the following matters: a) Length of service.
b) Position or job title.
c) Competence in the job.
d) Honesty e) Timekeeping.
f) Reason for Leaving g) Any other particular remarks about the employee such as long periods of absence due to sickness.
Furthermore, hauliers shouid always ensure they see prospective drivers' licences. Employers should also avoid making remarks of a personal nature about the employee. Employers must try to ensure the accuracy of the information provided in the reference, and that any statements are reasonable when viewed against the documentation and information which are within the employer's possession.
A further complication arises out of the Data Protection Act 1984. If information about an employee is stored in a computer, then the provisions of the act must be complied with. In summary the employee has the right to be informed by the employer about any personal data relating to the employee, and also to be supplied with a copy of any information constituting such data.
Prudent
The act requires that personal data kept on computer must be accurate and kept up to date. It is therefore prudent for an employer to circulate to employees on an annual basis a print-out of information stored about them on computer.
Clearly most employers provide careful references, but in the result of this case those employers who failed to achieve this standard in funire will have to compensate their employees or former employees who suffer damage as a consequence. No system can be foolproof, and nor can it detect every rotten apple in the barrel. However, the careful provision of references can therefore only be neglected at the employer's peril. The golden rule in this area must be to do unto others as you would have them do unto you.
El by Catherine Prest
Catherine Prest is a barrister and a member of the Employment Law Department at &et-sheds Hepworth & Chadwick.