“Subject to satisfactory references” – why bother?

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We’ve all seen the expression “subject to satisfactory references” in contracts and offer letters but whilst the whole process of obtaining references is quite time consuming, the real question is – does it add any value?

The true test of the value attached to the process is determined by the quality of the information (and the extent to which it is acted upon) but more and more organisations these days are taking the easy option and only providing factual references and won’t comment on issues such as work output, quality, initiative.

Instead, employers are asking questions like do I have to provide a reference?…..can we be sued for something that we say in a reference?…….is it better to stick with factual information about the employee rather than provide an opinion about their suitability for the role?…..

Whilst, there is no legal obligation to provide a reference and a business is entitled to refuse to provide one, it is important that if you intend to go down this route, you should be consistent in your approach and not bend the rules depending on who it is.

Whilst you can be sued for something said in a reference, this is rare and you owe a duty to the employee and a prospective employer to ensure that reasonable care is taken to ensure that the information given is true, accurate and fair. Similarly, you owe a duty to the individual not to make defamatory comments. Herein lies the challenge – to provide a reference that is factually correct and not malicious so that it gives a fair assessment of the employee.

Arguably, it is the fear of being sued that leads Companies to take the view that providing a reference is just too risky and therefore, it’s easier to provide a statement that confirms dates of employment, what their job role is and, maybe why they left. Given that such a letter hardly gives us valuable insight into a person’s qualities – does it add any value? Yes – if the information provided in the reference is at variance with the employee’s CV….surely not?

Punctuality and sickness absence – for instance – are often issues that people want to explore in a reference. You are at liberty to pass comment on a punctuality problem or poor attendance, but it is necessary to be able to substantiate anything you say.

People often ask who should give a reference. Quite simply, there is no right or wrong answer although it makes sense that reference requests are coordinated centrally and to manage business risk, there should be clear Company rules or policy regarding who gives references and what they say. HR is the natural point of contact for reference requests and if the policy is to give detailed references, they can take soundings from line management but HR should have final veto on content.

At middle and senior manager level, the reference process is invariably less formal and relies on networks and people will pick up the phone and ask for an “off the record” chat about someone. This happens and will always be part of business life but it is important that people understand that taking a reference on the basis of an “off the record” is not without risk.

Similarly, you will occasionally hear Chief Execs or MDs saying about someone – “I’ll make sure they never work in the industry again”. Macho words but again, not without risk.

It is also easy to be cynical, not least where employer and employee agree a reference as part of a termination settlement, which is very common. Reading some references that form part of a settlement agreement, you are compelled to ask why a business might want to lose someone if they are saying such wonderful things in a reference.

It begs the question whether the whole process of obtaining references is still relevant. Considerable amounts of HR Administration time and effort are expended on getting references for new employees as well as other pre-employment checks but in reality, very few people are terminated on the grounds of unsatisfactory references.

Also, the general principle with taking up references is that they aren’t taken up until after an offer has been made. So, an employee gets offered a new job, resigns from old job and then potentially the new employer says the references are unsatisfactory. Employee now jobless and previous employer pleased to see rid…..the whole thing is bizarre.

Contrast with the approach of the public sector where it is normal for references to be taken up before the interview process. This alerts the current employer that you’re looking for another job and being flippant, the employer can either step in and make it worthwhile to stay or give a somewhat favourable reference to increase the employee’s chances of getting the new job.

We have become a victim of our litigious culture where, for fear of being sued or making comments which could be perceived as malicious or even discriminatory, it is easier to suggest that employers should only provide, brief, factual details and to include a statement that says it is Company policy only to provide basic details and that should not be interpreted to be disparaging of the employee in any way.

Employees aren’t either good or bad – it’s a matter of opinion and the reference process is somewhat outdated and relies too much on subjectivity.

Adrian Berwick gives practical HR support – either call 07885 714771 or e-mail info@abcommercialhrsolutions.com

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