There is no legal obligation on an employer to provide a reference.
Your policy on references needs to be consistent and must be followed by management and HR departments to avoid claims of discrimination.
If you decide to provide a reference, even if you just confirm period of employment and job title, there is a duty on you to take reasonable care towards both the subject and the recipient to ensure the information contained in the reference is true, accurate and fair. Hence where an employee has been dismissed for gross misconduct your failure to inform a prospective future employer of the dismissal could put your business at risk of a later claim.
All references given should include a disclaimer. Where it is your policy only to provide short-form references this should be stated in the reference.
Some employers are tempted to give departing staff glowing references believing this reduces the risk of a later tribunal claim. It is true that the sooner a former employee finds a new job (perhaps assisted by a glowing reference) the less lost future income he/she will have to sue for in the Employment Tribunal. However, the downside of giving such a glowing reference, especially where the employee has been dismissed, is that the reference may well contradict the reason given for the dismissal (perhaps undermining a dismissal for lack of capability) and can be produced as evidence against you at the Tribunal.
If you need advice or have any questions in relation to the above, please contact David Greenhalgh on 020 3603 2177.
This article/blog is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.