References - employers beware!

When we’re negotiating compromise agreements, we’re often on the receiving end of unhappy employees who cannot believe why their employer will only give them a reference which does little more than recognise that they actually worked there.

The case of Bullimore v Pothecary Witham Weld Solicitors and another, which admittedly is probably at the extreme end of reference cases, shows exactly why. The referee was held liable to compensate the employee for loss of earnings arising out of the new employer withdrawing the job offer as a result of a negative reference.

The employee claimed that the reference given by her former employer (PWW), which was negative to say the least, and the resulting withdrawal of a job offer by S, were both unlawful acts of victimisation. Is it surprising that these respondents were firms of solicitors? Some would say no, and indeed the EAT’s judgement expresses the view that they should have known better. Often they don’t, but that is a different topic entirely. The PWW reference candidly informed S that B had brought a claim for sex discrimination against them, and that she had poor relationships with the firm’s partners. As a result of this reference her new employer withdrew the job offer.

The Tribunal agreed with the employee that both employers had victimised her and S sensibly settled their part of the claim before the remedies hearing. The remaining question before the tribunal then was to consider what compensation should be paid by PWW.

The Tribunal agreed with PWW that compensation for loss of earnings should be paid only by S and that PWW were only on the hook for an injury to feelings award. B appealed.

And not surprisingly the EAT took a different view. They said that it was obvious that any new employer would react badly to receiving such a reference and that withdrawing the offer was “evidently foreseeable”. In the interests of fairness and public policy, a referee should be liable for the direct consequences of its actions and a claimant should not be deprived of a remedy if he or she lost a job on the basis of such a reference.

As we have said, this case is at the extreme end of what not to write in a reference. But it pays to be careful. Not giving more than a standard reference can be an act of victimisation or discrimination if your normal practice is to give a full reference. You may be asked over the phone for more detail about an employee. Proceed at your peril, as not only might you find yourself facing criticism by a judge, but it could cost you dearly, particularly if the employee in question struggles to find a new job.