Just for reference: how to avoid pitfalls of making a bad appointment

In July 2017, the RCVS put out a strongly worded note to practices warning them not to employ Peter Keniry, a man with a string of convictions in his native South Africa dating back to 1986 for fraud and impersonating a veterinary surgeon.

The RCVS said Keniry had been known to steal the identities of legitimately registered members to support fraudulent applications for employment or practise fraudulently.

Other cases of criminality have occurred in the profession. Take vet Francisco da Cruz who, in September 2013, was struck off the RCVS register for defrauding insurance companies of about £10,000 with fictitious claims for veterinary treatment on non-existent pets. More recently, Carlos Egido Cortes was struck off in August 2017 after a conviction for possessing indecent images of children and an extreme pornographic image involving an animal.

Clearly, job applicants need to be checked – and the most obvious way is via a reference.

Philip Richardson, a partner and employment law solicitor at Stephensons, said it is a common misconception that an employer is under a duty to provide a reference for an existing or former employee. The reality is quite different – “other than where a reference is needed by a regulatory body or there is a prior written agreement to provide a reference, there is no strict obligation on an employer to give a reference to an employee”.

In practice

In practice, however, it is rare for an employer to refuse to provide a reference. This is partly because it is good practice to do so and partly because of the adverse consequences a refusal would have on the employee concerned.

It’s because of this, Philip said, the response to a general request for a reference may contain nothing more than factual information about matters such as job description, length of service and reason for leaving. Sometimes, prospective employers ask more specific questions, about matters such as competence and character.

Philip offered caution: “It has been established over the past few years that employers owe a duty to former employees to take reasonable care over the preparation of references. Although a reference given by one employer to another about an employee has qualified privilege, which protects employers from liability for untrue statements provided they ‘honestly believed’ in the truth of what they said, there are some limits to what an employer can say.”

In particular, he says an employer must not:

• give any information about convictions that are spent under the Rehabilitation of Offenders Act 1974 (Rehabilitation of Offenders [NI] Order 1978 in Northern Ireland), unless the job in question is exempted
• maliciously make false statements
• negligently make a wrong statement

Unsatisfactory references?

But what happens where an employee has been dismissed on the grounds his or her work was unsatisfactory? Again, Philip suggested being careful: “Although employers may have no wish to ruin the former employee’s future career just because the working relationship broke down, this could backfire if the employee then challenges the reason for dismissal in an action for unfair dismissal.”

He explained the point further with a case – Castledine v Rothwell Engineering Ltd (1973): “Here, a tribunal held that an employee had been unfairly dismissed after his employers failed to show a proper reason for dismissal. The employer argued that the reason for dismissal was the employee’s lack of ability, but the tribunal found this irreconcilable with the very favourable references they gave him on leaving.”

Situations like these can make matters stickier for employers. They are often not aware of the action an employee can take if he or she has suffered a loss as a result of an inaccurate reference, especially so if he or she has been unable to obtain employment or because he or she has been dismissed for having unsatisfactory references. Three possible causes of action are available to them – the general common law category of “tort”; namely defamation, malicious falsehood and negligence.

Defamation and malicious falsehood

Philip said: “Where an inaccurate reference attacks the employee’s reputation, the tort of defamation is the most obvious cause of action.

One element of a defamatory statement is its falsehood. If the maker of the statement wants to allege that the statement is true, then he or she has the burden of proving it is so. In the context of job references, the referee will have the protection of the defence of qualified privilege.”

In essence, he said, the tort of malicious falsehood protects a person from loss of business reputation. The employee has the burden of proving the statement was made “maliciously” – that is, defined as “calculated to cause damage”.

Both malicious falsehood and defamation may prove to be inadequate because of the difficult task of establishing malice and the fact an employee is looking for a remedy that will compensate him or her for loss of opportunity.

“Quite simply, the best course of action for an employee who gets an inaccurate or unfair reference is to sue his or her former employer in negligence,” said Philip.

Negligence

With negligence, employers are obliged to not provide an inaccurate reference as they have a duty of care not to make negligent misstatements.

Philip said: “Take the case of Spring v Guardian Assurance plc & ors (1994). It confirmed an employer who gives a reference in respect of a former employee is under a duty to take reasonable care in the preparation of that reference and would be liable to the employee in negligence if the reference was inaccurate and the employee suffered loss as a result.”

He added the duty requires employers to use reasonable care and skill to ensure the accuracy of facts used in a reference.

But is this duty contractual? Philip isn’t so sure: “It has long been a matter of debate whether an employer has a contractual duty to take reasonable care in preparing a reference. The courts have usually declined to imply such a term into the contract of employment because, generally, it is not necessary to give the contract ‘business efficacy’.”

Claim from a new employer

There is another player to consider – the new employer. What happens if it recruits someone on the basis of a good reference that turns out to be inaccurate and suffers loss as a result? Here, the employer may have to go through the expense of recruiting again, or could suffer loss through the incompetence or dishonesty of the employee.

It, too, has rights – as Philip noted: “A remedy could be available in the tort of deceit for fraudulent misstatement, but, where a referee has been careless, the new employer will have a potential action against the referee for negligent misstatement.”

Rock and hard place

It would appear a former employer owes two incompatible duties: one to the future employer and one to the employee. On one hand, the employer must take care to not paint too bad a picture of the employee so as to damage his or her prospects. On the other hand, the employer must ensure it mentions any facet of the employee’s capability or conduct that is relevant to the future employer.

At the end of the day, employers must exercise care when preparing references. Philip said: “If an employer takes a common-sense approach, there should be nothing for the employer to worry about. Employers must ensure all the facts on which the reference is based are accurate and that the overall impression of the employee is not misleading.”