Employee Relations

Can HR give a bad reference?

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It’s a bit of an urban myth that employers are not allowed to give a bad reference for an ex-employee. But as with most myths, there is a little truth behind it.

In this guide, you’ll find the answer to the mysterious question: ‘can an employer give a bad reference?’ We’ll also explore the ways HR can respond to reference requests about an employee who you don’t feel deserves one.

So, can employers give an employee a bad reference?

The law is clear: references must be factual. Therefore if an employee has underperformed at work or acted unfavourably, it is not illegal for an employer to state this in a reference as long as it’s wholly accurate. 

For example, if you’ve been dismissed or received a disciplinary, an employer can state this in your reference, which may not look good to your new potential employer. If you think your old employer has given you a bad reference, it is your right to be able to ask to see a copy and check if it’s true to your working experience there.

If you think it’s likely that your employer will give a bad reference, you should look elsewhere for a better reference. You don’t have to give your most recent employer as a reference, or your direct line manager at the time. You can ask someone from HR, or an older employer to give you a more favourable reference. Ultimately, if you think a bad reference means you lost your job as a direct result, you can take them to court if you think it’s right.

How should employers handle giving a bad reference?

Despite what many people think, employment law in most countries does not prevent employers from giving a ‘bad’ reference. As explained by UK employment advice service ACAS, references must simply “be a fair reflection and accurate”.

But while this doesn’t prevent previous employers from giving a ‘bad’ reference, you (HR) must still be wary about including any conjecture, or personal, biased assessment of a person’s character. In other words, you should steer clear of making statements that are subjective or opinionated.

If you feel uncomfortable giving a reference because you know it’ll reflect unfairly on the ex employee, you must remember:

  • There is no legal obligation to give a reference
  • If one is given, it should be fair and accurate
  • Prospective employers may only request a reference with the candidate’s permission

In many countries, employment law is a variation on the same theme.

Giving bad references can be risky – especially in countries with litigation culture

The USA is perhaps the country most strongly associated with ‘litigation culture’. People seem able to sue, or to be sued, for defamation of character, including giving out ‘bad’ references. And even if you’ve done nothing wrong, you’ll still need to fork out cash to defend your case. For this reason, employers are often very reluctant to give out ‘bad’ references for ex-employees who have caused them trouble.

“You can give a bad reference, but it has its risks” explains Dan Kalish, Managing Partner at HKM Employment Attorneys. “If you give a bad reference, and the person does not get the job, you could be liable for defamation. To avoid these risks, several companies have a policy that they will only give out dates of employment and last position held for all their former employees.”

Many people agree that you’re unlikely to land yourself in trouble for stating facts – for example, an employee’s attendance record, or their start and end dates. But anything that could be considered a personal interpretation of these facts, which goes on to affect the employee’s future career prospects, could cause trouble.

Three ways to deal with reference requests for ‘bad’ employees

Many employers consider it a challenging moral decision, when they get a reference request through for somebody who they consider a ‘bad’ ex-employee.

“I could never give somebody a good reference if I didn’t think they were a good employee” explains Brianna Rooney, founder of Techees.com. “I would never omit the positives, but I would tell the whole story. I wouldn’t want to do a reference check and have a company lie to me. Therefore, I would never do that to someone else.”

So how do you deal with the reference request? After speaking to HR and business  experts, we found that there were three main trains of thought.

1. Refuse the reference request

From a legal standpoint, refusing a reference request is probably the safest way to go. The guidelines by ACAS say that there is no legal obligation to provide one, and according to lawyer Dan Kalish, “a former employee will generally not have a claim against you if you refuse to provide a reference.”

Of course, some employers feel that providing a reference is the least they can do to help an ex-employee on their way.

2. Only mention the positives

Possibly the most common way to get around providing a reference, is to only mention the positive traits an employee exhibited. For example, if an employee was really bad at timekeeping, but really good at hitting their sales target, then the previous employer might mention how well the employee did meeting their quota, but say nothing about their punctuality or deadlines.

But while it is up to the new employer to make their own assessment of the facts, talking about positives while omitting negatives could actually lead to a false assessment of the candidate’s value. And this could be detrimental to the prospective employer’s business.

3. Confirm only the dates of employment

When faced with a reference request, some companies have a policy of only confirming the start date, end date, and job role of the ex-employee. This can be a good way of responding to reference requests relating to employees who you feel did not perform their job role well. And according to Nannina Angioni, employment attorney with Kaedian LLP, this policy is a good one to apply to all reference requests as a rule of thumb.

“This protects the company against claims by the former employee if you say something negative” she explains, but adds that “you also don’t want to give a false positive recommendation. If, for example, the ex-employee stole money and in talking with a potential new employer you praise the former employee’s trustworthiness, you could find yourself on the receiving end of a complaint by the new employer.”

Key takeaways

For an employee, it’s important to remember that employers can give you a bad reference as long as it’s factually accurate, so it’s important to choose a referee who you can trust to give a good, honest reference. For employers and HR, it’s important to remember that you don’t have to give a reference, or you can give a simple reference, if you think it may cause you legal problems in the future.

References can be a serious pain point for HR departments. It takes time to collect the information employees require, such as employment dates, disciplinaries and punctuality, especially if they’re an employee from years ago. By using a centralised HR software, all of your HR data will be in one place, making providing accurate and factual references a breeze.

Try PeopleHR HR software today with a free trial.

Further reading

If you found this article useful, you may want to keep reading with some of our other HR insights: