The value of quality employment references

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Man reading employment reference

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We’ve all seen the expression “subject to satisfactory references” in contracts and offer letters but whilst the whole process of obtaining references is quite time consuming, the real question is – does it add any value and are references worth the paper they’re written on?

The true test of the value attached to the process is determined by the quality of the information (and the extent to which it is acted upon) but these days it’s more common to merely provide factual references and not comment on issues such as work output, quality, initiative.

Does a Company have to provide a reference?

There is no legal obligation to provide a reference and a business can simply refuse to provide one or ignore a reference request.

Can a Company be sued for something that we say in a reference?

In theory, yes, but it’s highly unlikely. But you owe a duty to the employee and a prospective employer to ensure that reasonable care is taken to ensure that the information given is true, accurate and fair. Similarly, you owe a duty to the individual not to make defamatory comments.

Herein lies the challenge – to provide a reference that is factually correct and not malicious so that it gives a fair assessment of the employee.

Arguably, it is the fear of being sued that leads Companies to take the view that providing a reference is just too risky andtherefore, it’s easier to provide a statement that confirms dates of employment, what their job role is and, maybe why they left.

Punctuality and sickness absence are often issues that people want to explore in a reference and whilst you can comment on a punctuality problem or sickness, it is necessary to be able to substantiate anything you say.

Who within the business should give a reference?

There’s no right or wrong answer although it makes sense that reference requests are coordinated centrally and to manage business risk, there should be clear Company rules or policy regarding who gives references and what they say. HR is a natural point of contact for reference requests but not all businesses have an HR function.

Informal networks and “off the record” references

At middle and senior manager level, the reference process can be less formal relying on networks and contacts and people will pick up the phone and ask for an “off the record” chat. This happens and will always be part of daily business life but it is important that people understand that taking a reference on the basis of an “off the record” is not without risk.

Similarly, you will hear CEOs, MDs or business owners saying about someone – “I’ll make sure they never work in the industry again”. Macho words but again, not without risk.

References and settlement agreements

Quite often at middle/senior management level, a “form of words” is agreed as a reference between employer and employee as part of a settlement agreement on termination. But, it is also easy to be cynical, and reading some references that form part of a settlement agreement, you are compelled to ask why a business might want to lose someone if they are saying such wonderful things in a reference.

It is easy to spot a reference agreed as part of a settlement agreement!

Are references still relevant?

All this begs the question whether the whole process of obtaining references is still relevant. It expends considerable amounts of HR resource, time and effort but in reality, not many people are terminated on the grounds of unsatisfactory references.

Also, the general principle with taking up references is that they aren’t taken up until after an offer has been made. So, an employee gets offered a new job, resigns from old job and then potentially the new employer says the references are unsatisfactory. Employee is now jobless and previous employer pleased to see rid…..the whole thing is bizarre.

Contrast with the approach of the public sector where it is normal for references to be taken up before the interview process. This alerts the current employer that you’re looking for another job and being flippant, the employer can either step in and make it worthwhile to stay or give a somewhat favourable reference to increase the employee’s chances of getting the new job.

We have become a victim of our litigious culture where, for fear of being sued or making comments which could be perceived as malicious, defamatory or even discriminatory, it is easier to suggest that employers should only provide, brief, factual details and to include a statement that says it is Company policy only to provide basic details and that should not be interpreted to be disparaging of the employee in any way.

Unless the reference is purely factual, it’s all about opinion and the reference process relies too much on subjectivity.

Small wonder people question if they are worth the time and hassle or the paper they’re written on.

Adrian Berwick of ABHR Solutions gives practical HR support – either call 07885 714771 or e-mail

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