Reference Rules: Navigating the Dos and Don’ts for Employers.

One of the most common ways an employer will assess a candidate’s character and learn more about their work ethic and suitability for the role is by examining references from previous employers. A glowing reference can improve a candidates chances of standing out from the competition when applying for a competitive role, demonstrating their most valuable skills and attributes, while at the same time confirming they are an employee that is capable of performing the role.

A bad reference, on the other hand, can instantly destroy an individuals chances of getting their dream job, and make it almost impossible for them to find a new employer.

Unfortunately, in most parts of the world, giving a bad reference (or no reference at all) isn’t illegal. Here’s everything you need to know about giving or receiving a bad reference.

Can an Employer Give You a Bad Reference?

Though a bad reference can severely harm a candidate’s chances of being hired, they’re not illegal. There are very few laws that prohibit an employer, co-worker, or anyone else approached for a reference from sharing negative information about an individual. However, the exact rules and guidelines around references vary from one country to the next.

Legal Regulations in the UK

In the UK, an employer isn’t required to give a reference, unless they agree to do so in writing. If an employer chooses to share their thoughts on an individual’s attributes and work ethic, they are required to provide accurate insights, which are fair and legitimate.

While employers are allowed to share honest information about things like poor punctuality, whether someone was fired, and whether an individual acted inappropriately, they are not permitted to add unfair or misleading information to a reference.

If an employee or ex-employee believes the statements made about them in a reference are false, they may be able to claim damages in court. An employer will be required to back up the reference and show evidence of its accuracy.

Legal Regulations in the US

The legal regulations surrounding references in the USA are similar to those in the United Kingdom. However, it’s worth noting different states may impose their own rules on top of federal laws. On a federal level, all employers are required to give accurate, true, and fair insights into their employees when writing a reference. This means that an individual can still challenge a reference if they believe it’s unfair or misleading.

Many states also regulate exactly what an employer can say about a previous employee. For instance, some states prohibit an employer from sharing personal information about a staff member without their consent. Some states have “service letter laws” which require employers to describe certain aspects of a team member’s employment, such as their work history, pay rates, or reasons for termination.

Legal Regulations in Australia and New Zealand

In Australia and New Zealand, employers will not breach any Commonwealth privacy laws by providing personal information in a reference that relates directly to an employee’s job. However, they are often required to ask for consent when sharing specific details.

Employers are required to carefully consider what information is appropriate to provide in a reference. Generally, employers aren’t permitted to disclose private information about their staff members, such as their medical history, due to Commonwealth privacy laws. However, the exact information an employer can share may vary based on state or region.

When Might An Employer Give a Bad Reference?

In most parts of the world, employers are permitted to share negative comments about an employee if they’re relevant and fair. Most local and federal laws allow employers to comment on an employee’s conduct in the workplace, their performance, and other factors, such as poor attendance.

However, employers typically aren’t permitted to share defamatory comments based solely on their dislike of an employee, or another irrelevant factor.

Negative references not only damage an individual’s chances of getting the next role they apply for, but they can also have a long-standing impact on their professional brand. If word spreads about an individual’s negative attributes, they may struggle to take the next step in their career.

What Can You Do if You Receive a Bad Reference

Receiving a bad reference can be extremely detrimental to an individual’s future. That’s why it’s so important they hold themselves to high standards when working in any environment, regardless of whether they’re planning on seeking out a new job or not.

If you receive a bad reference for a candidate you were hoping to employ what can you and they do:

  • Speak to the individual: Talk to your would-be employee about the reference to allow them to challenge any aspects they believe to be unfair or unreasonable. If the reference is accurate, tackle the negative feedback head-on, to allow the individual to explain what influenced their performance previously, and how they plan on addressing these issues in future.
  • Explain their legal rights: While employers are permitted to share negative insights into an employee, they can only do so when their statement is fair and accurate. If an individual believes what their employer has said about them in a reference is incorrect they should first obtain a copy of the reference (if you are willing to provide it), and consider seeking legal advice.
  • Talk to their former employer: Depending on their relationship with their current or former employer, it may be helpful for the individual to speak with them about the reference. They should question the inaccuracies they believe exist and ask their employer/former employer whether they may be willing to correct the reference. Apollogising for any misconduct may help to resolve the issue amicably.
  • Assess other references: It may be possible to mitigate the impact of a bad reference by applying for other positive references for your prospective new employee. Look at statements given by other colleagues, co-workers, and employers in the past.

You can also consider speaking to your recruitment company for some extra advice. They may be able to offer insights on how an individual can reduce the impact of a bad reference or seek out better commentaries from other people in their history.

Neil Scarborough

Managing Director

At The Recruiting Office, we have been helping firms with their talent acquisition, and a wide range of job seekers find their ideal roles for almost a decade and have successfully placed hundreds of top tier candidates.

If you want to find out how we can help you – call us on 01603 964816 or email neil@therecruitingoffice.co.uk

Further reading:

6  Great Ways to Improve Your Talent Acquisition

5 Warning Signs Your Top Employee is About To Leave