Implications of the Justin Forsyth story for employer references. Do new questions of balance arise?

It was reported last week that Justin Forsyth faced a formal grievance from a female colleague before resigning from Save the Children, as opposed to an informal complaint resolved via a confidential internal mediation process.

As UNICEF reportedly had no knowledge of the grievance until now, we have been reflecting on the possible form of reference which UNICEF claim to have received from Save the Children before Forsyth took up his employment there.

As a matter of policy, many employers only offer a basic reference. This is often referred to by employment lawyers as a ‘tombstone’ reference and contains basic information on employment such as the employee’s name, job title and the dates they were employed. Tombstones often contain a statement that such basic references are company policy, to ensure that nobody can infer anything negative at all from their brevity, and many references contain a liability disclaimer.

These references are designed to protect the employer from potential claims by the new employer or employee for, amongst other things, negligent misstatement and defamation. An employee can potentially sue if a misleading reference compromises their conditional job offer; an employer can also sue if a referee misleads, even by omission, and which causes the employer loss.

The Forsyth story may cause worry for employers about the extent to which a reference disclaimer can protect them in these circumstances, and about decisions not to disclose a formal but unproven grievance or, indeed, a disciplinary allegation.

As for a disclaimer, case law appears quite settled that a clear disclaimer should protect the employer from claims by the recipient of the reference. However, a disclaimer is unlikely to offer protection against claims by an employee.

An employee could in some cases rightly complain about their previous employer referencing what they consider to be a spurious and unfounded complaint which has not been properly investigated. In Forsyth’s case, it is reported that the formal grievance was withdrawn when Forsyth left Save the Children.

In 1999 the Court of Appeal held, in the case of Bartholomew v London Borough of Hackney, that the employer did not breach its duty of care towards its employee when it provided details of pending disciplinary proceedings, as it would have failed in its duty to the recipient had it not done so.

However, such decisions will always prove a difficult balancing act for employers. The answer may be that employers should investigate and decide on a grievance or disciplinary allegation which relates to such serious allegations of misconduct, even (perhaps even more so) when the accused jumps ship at an early stage.

The employer may also wish to consider refusing to give a reference at all in high risk circumstances, such as those involving senior or high profile employees. There is generally no legal obligation to provide a reference, with risks of a claim only usually arising from the contents of any reference.

Finally, this story also raises implications for settlement agreements. Employers should think twice before rubber stamping a tombstone reference within a settlement document, particularly in circumstances where allegations of discrimination or dishonesty have been made.