Your employer can be sued if a careless reference costs you a new job.
“Employer liable for negligence in preparing a careless reference that cost a former employee a new job.”
Your employer owes you a duty of careA legal responsibility to take reasonable care to avoid causing someone harm. In an occupational health context, it matters because this duty is owed to your employer, not to you. when writing your reference, and can be liable if they get it wrong through carelessness.
- Ask for a copy of any reference given about you if you suspect it damaged a job opportunity.
- Keep clear evidence of the job or opportunity you lost and when you lost it.
- Get advice from an employment solicitor before pursuing a claim, since these cases depend on proving both carelessness and financial loss.
The situation
Working as a sales manager for an insurance company, the employee sold policies on behalf of a larger insurer, until the business changed hands and, once new management took charge, tension between them built quickly and he was dismissed. He tried to set up on his own, selling insurance for a different company, but the regulator at the time required his old employer to provide a reference before he could be approved. His former employer sent a reference that was damaging to his reputation, based on a hurried and inadequate internal check rather than a fair assessment. The new company turned him down, and he was unable to work in his industry.
What the court found
The House of Lords ruled that an employer owes a duty of care to a former employee when writing a reference for them. If the employer is careless in preparing that reference, causing the employee real financial loss, the employee can sue for damages in negligence. This was a significant shift. Until this case, references sat in a grey area where employees had little practical recourse even when a reference was inaccurate or unfair, because a claim in defamation is difficult to bring and easy for an employer to defend. The House of Lords confirmed that negligence law offers a separate and more workable route: the reference must be prepared with reasonable care, not just without malice.
House of Lords, 1994