Article highlights
- There is no general legal or statutory obligation to provide a reference, although an obligation may arise from an employee's contract or an employer's established practice.
- Poor handling of a reference request can increase an employer's financial exposure where it contributes to a former employee's ongoing loss following an unfair dismissal.
- Employers can adopt a policy of providing factual statements of employment only, but that policy should be communicated clearly and applied consistently.
- References should contain accurate, job-related information. False statements or discriminatory comments can expose an employer to defamation or equality claims.
Introduction
It is often a pre-condition of employment to provide one or more satisfactory references from previous employers. Accordingly, where an employee is leaving employment, it is commonplace to request a reference from their employer. Prospective employers may also reach out to ask for a reference in respect of a former employee. Many employers have moved away from providing employment references at all and will only supply former employees with a Statement of Employment. There are a number of factors an employer must consider when they receive reference requests. In this article, we explore the legal risks and considerations at play.
Can an employer refuse to provide a reference?
Whilst there is no general legal or statutory obligation to provide an employee with a reference, a legal obligation to provide a reference could arise if it is an express or implied term of an employee's contract of employment that a reference will be provided and/or the employer has a standard custom and practice of providing references. Employers should be aware therefore that a decision to refuse to furnish a reference does not come without consequences.
Unfair dismissal compensation risk
One such consequence can arise where the former employee brings a claim to the WRC under the Unfair Dismissals Act, 1977. If the WRC finds the dismissal was unfair, the WRC then looks to calculate the employee's losses to determine the appropriate level of compensation up to the maximum statutory cap of two years' remuneration. The Complainant has a duty to mitigate their loss by seeking alternative employment. In this context, an employer's decision not to provide a reference has the potential to lead to a higher award before the WRC if the employee can demonstrate that a failure to provide a reference adversely impacted on their ability to secure alternative employment.
In Graziano D'amato v. TripAdmit Ltd., ADJ-00047459 (October 2024), the Complainant was dismissed without notice. The Respondent employer in evidence confirmed they do not provide written references but are happy to supply verbal references. The Complainant had applied for 37 jobs and was unsuccessful and he attributed his inability to secure new employment to the employer's failure to provide a written reference. The WRC found that the employer's failure to provide the Complainant with a reference without any justification, contributed to the Complainant's loss of earnings. While the WRC did not confirm what portion of the award was due to the failure to provide a written reference, the Complainant was awarded €42,000 for the unfair dismissal.
In Shulammite Awotundun v. Brendan Vacations Ireland, Ltd., ADJ-00059093 (May 2026), the WRC found the Complainant's redundancy was not genuine and amounted to unfair dismissal. In assessing financial loss, the Adjudication Officer held that “the Respondent's handling of a post-dismissal reference request was a causative factor in the termination of the Complainant's subsequent employment”. The Complainant had secured a new role and provided two referees from the Respondent. When the new employer contacted the referees with a questionnaire, neither completed it. The Director of Operations instead issued a statement of service by email. The Adjudication Officer confirmed he took no issue with the Respondent limiting its reference to a statement of service, noting this was an entirely legitimate and long-established policy within the Respondent. However, the Adjudication Officer criticised the Respondent's failure to communicate that policy clearly and in a timely manner to the new employer, and found it “striking and particularly disappointing” that, when the Complainant raised the adverse impact of the delayed and deficient handling of the reference process, the Respondent neither acknowledged responsibility nor made any effort to mitigate the impact. The Respondent's conduct effectively prevented the Complainant from exiting the loss position created by the dismissal. This was a factor considered by the WRC in deciding the appropriate level of compensation of €40,789, however, again, we do not know how much compensation was attributed to the reference issue.
Even where an employer has a policy of only providing Statements of Employment, such statements should be issued as a matter of course to employees on termination of employment, as opposed to the employer waiting for a specific request from the employee, to ensure that no argument about inability to mitigate can arise in any subsequent claim.
What should an employer include in a reference?
Where an employer is providing an employment reference, they ought to be careful when preparing a reference as the content of a reference could expose the Company to liability. In the first instance, and perhaps somewhat obviously, employers ought not to include false statements about the individual as this could expose the Company to potential defamation action.
Employers should also be careful not to raise any inference of discrimination against the individual in what they set out in the reference. In the WRC decision of Employee v. Personnel Manager,ADJ-00024794 (August 2021), the Complainant was an employee who received an unsatisfactory employment reference from her line manager when she was seeking promotion. The Complainant suffered from anxiety, which she disclosed to her line manager. Her line manager provided a reference which rated her as unsatisfactory across several competency areas, including time management, leadership, and reaction to a busy environment. The reference explicitly noted that on one occasion she had failed to attend an important meeting because "she experienced anxiety and had to return home". The Complainant was informed by HR that her reference was not satisfactory. The Complainant obtained a copy of the reference via a Data Subject Access Request. The WRC held that by making direct references to the Complainant's anxiety, the Respondent discriminated against the Complainant on the disability ground, and this impacted her ability to acquire new employment. The Complainant was awarded 6 months' salary by way of compensation which is by no means insignificant.
Off the record conversations
Employers may also receive a request for an "off the record" discussion with a prospective or new employer regarding a former employee. In reality, labelling a conversation as "off the record" affords little protection and prudent employers engaging in such discussions should do so appropriately, bearing in mind that the former employee is likely to learn of their comments in some way. If that happens, the former employer could be exposed to litigation for comments made in that "off the record" conversation.
Statement of employment or full reference?
Many employers are now opting to provide a factual statement of employment as opposed to a traditional, personalised reference. A statement of employment can include, for example:
- The individual's job title
- The dates of employment (commencement date and end date)
- The duties/responsibilities of the role held
As outlined in the Shulammite Awotundun v. Brendan Vacations Ireland, Ltd. decision discussed above, there is no issue in adopting a policy to provide factual statements of employment only. The Adjudication Officer confirmed "[m]any employers adopt such an approach for the sake of consistency, and it is entirely legitimate to do so." It is important to note though, as confirmed by this decision, that if a new employer asks for a reference in a specific format and an employer is not prepared to provide a reference in the requested format (e.g. a questionnaire), they should explain that their Company policy is to provide a statement of employment only.
Managing the reference risk
Recent WRC decisions confirm that while there is no statutory or general legal obligation on an employer to provide a reference, the manner in which a reference request is handled can have significant legal and financial consequences. Employers should adopt a clear and consistent policy on the provision of references and communicate that policy to all employees. Care must be taken to ensure that any reference is accurate and does not contain statements which could expose the employer to litigation. Where an employer elects to limit references to a statement of employment, it should be prepared to explain that position to a prospective employer who requests a more detailed reference. Employers should also be mindful that a failure to provide an adequate reference can be taken into account by the WRC when assessing the appropriate award in a successful unfair dismissal action.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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