Reference costs £42,500!!

Providing a damaging reference can prove costly, for the reference provider but it might also surprise people that the recipient, prospective employer can also be liable. The facts of a recent case follow. The Claimant was a solicitor in a law firm. Following the termination of her employment she brought proceedings in the employment tribunal against that firm, alleging both unfair dismissal and sex discrimination. The proceedings were eventually settled. The Claimant subsequently obtained employment with another solicitor's firm subject to references. Her former line manager was given as a referee but he gave a negative reference. He referred to her poor relationship with the partners and the practice director, gratuitously mentioned that she had brought employment tribunal proceedings against her former employer and said she could on occasion be inflexible as to her opinions. The new employer investigated further, including requesting a copy of the Claimant's tribunal pleadings, and decided to alter the terms of the offer to include a long probation period. The Claimant was unhappy with this and the job offer was eventually withdrawn. The Claimant brought further proceedings against both her old employer and the new employer. The Tribunal found that the giving of a reference in these terms constituted a detriment and that the line manager had been significantly influenced in what he chose to say by the fact that the Claimant had brought sex discrimination proceedings against her former employer. The giving of the reference was thus an act of unlawful discrimination by way of victimisation. In addition the tribunal held that the new employer had been specifically influenced in their decision to withdraw their job offer by the information that the Claimant had brought sex discrimination proceedings against her former employer. This constituted an act of a kind specified in section 4 (1) (a) of the 1975 Sex Discrimination Act (a "protected act"). Accordingly it held that the withdrawal constituted unlawful discrimination, by way of victimisation. Quantum was not decided at the hearing and whilst waiting for the remedy hearing the new employer decided to settle for £42,500! That left only the old employer and line manager as parties to the claim. In discrimination claims individuals can also be named as a party to the claim and be held directly liable. At the remedy hearing an award of £7500 was made to the Claimant. The award was for injury to feelings and not loss of wages as the tribunal thought this was too remote. The Claimant appealed on 2 grounds. 1. that the award should have included loss of wages and 2. the injury to feelings award should have been higher. In relation to the former the EAT said the Claimant suffered loss as a result of the combination of two wrongful acts, the old employer in giving the damaging reference, and the new employer in withdrawing the offer following receipt of that reference. It seemed to the EAT that "as a matter of policy and fairness the Respondents (old employer and the line manager) ought plainly to be liable here. When an adverse reference, given for an illegitimate reason, leads to an employer deciding not to make, or to withdraw, an offer to a candidate it is hard to see why that consequence should be regarded as too remote to attract compensation from the giver of the reference: so far from being remote, it seems to us both close and direct. As the case-law shows, the giving of damaging references is a not uncommon form of victimisation (or alleged victimisation). It would be most unsatisfactory if a claimant who lost the opportunity of employment as the result of such a reference were unable to recover substantial damages from his former employer. A remedy against the recipient of the reference will by no means always be available. It was only so in the present case because part of the damaging information supplied took the form of information about the earlier proceedings, which constituted a protected act, and Sebastian's (new employer) were held to have been motivated by that specific information." As a result the case was referred back to the tribunal to assess an addition to the award of loss of wages. The appeal against the quantum of the award for injury to feeling was however dismissed. Interestingly the EAT suggested that the damages should be apportionment between the provider and recipient of the reference to reflect their culpability, an exercise which involves, essentially, an assessment of the parties' respective culpability and their degree of responsibility for the loss suffered was perfectly practicable. In this case the reference was directly linked to a discriminative act but employers still need to be careful when giving a reference. There's no legal obligation to provide a reference to a former employee or their prospective employer and some employers decline to provide references to former employees as a matter of policy. Other employers are happy to provide a factual reference only and of course some will provide a full and glowing reference. Generally speaking providing a reference is a simple affair but if you are asked to write a reference for an ex-employee that you have reservations over the best policy is usually to decline to offer a reference on policy grounds. Even then be sure to take advice because even an omission to act can be an act of discrimination. Full Case: http://www.bailii.org/uk/cases/UKEAT/2010/0189_10_2109.html