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Generally speaking, there is no legal obligation on an employer to provide a reference for a former employee. However, where an employer does provide a reference it has a duty of care to the former employee and must take reasonable care in the drafting of the reference which must be true, accurate and fair and not give a misleading impression. An employer may be held liable for negligent misstatement in circumstances where references are given are inaccurate.
The recent Court of Appeal decision in Abdel-Khalek v. Ali has confirmed the legal duties which apply to those offering references. In this particular case, the Court of Appeal looked at a claim for negligent misstatement in respect of an informal reference provided by an individual to a new employer. In summary, Mr Ali worked with Mr Abdel-Khalek for about four months and there was apparent animosity between them. Mr Abdel-Khalek was subsequently offered a locum post at another hospital. However, that offer was withdrawn after his prospective employer spoke to Mr Ali on the phone. The latter made various statements which gave the impression that there were concerns regarding Mr Abdel-Khalek's clinical competence. Specifically, Mr Ali disclosed that Mr Abdel-Khalek’s complications and complaints rate had been higher than expected. As a consequence of this, his offer of employment was withdrawn and he subsequently sued alleging that the adverse statements made about him were incorrect and provided negligently.
The Court of Appeal found that the number of patients suffering complications had been exaggerated. However, it was also found that Mr Abdel-Khalek had failed to prove there was not a higher than expected level of complications. Mr Ali’s suggestions were found to not be misstatements, because it was a general concern regarding the greater than expected complication rate that led to the offer being withdrawn, rather than the specific numbers. It was found that the other errors of detail were not relevant to the prospective employer’s decision to withdraw the offer. Mr Ali therefore, escaped any liability.
This case helpfully confirms that mistakes in the detail of a reference will not necessarily lead to liability if the overall impression offered is generally accurate, and it is that impression which is then relied upon. However, relying on this rule is a risky strategy as employers may still be held vicariously liable if a reference has been given negligently. This case also serves a useful reminder how things can go wrong when informal references are given.
It is best practice to establish a policy clearly stating whether you give references and if you do, who should give them and what they should contain. It is worthwhile considering providing only factual references to avoid the risk of negligent misstatements.