Employers facing defamation risk over references

Employers must be mindful of the information they disclose when providing a reference or risk facing claims such as defamation, a workplace law expert says.

Peter Ferraro, senior associate at Harmers Workplace Lawyers, says providing references can lead to a number of issues including misrepresentation and defamation claims, and invasion of privacy.

“There is a fine line between providing too much or not enough information about a candidate’s skills, previous experience and their ability to do the job,” he says.

Ferraro says while many referees feel compelled to provide positive references for a former employee, sticking to the basic facts is sometimes the safer option.

According to Ferraro, former employees are under no legal obligation to provide a reference, stating it is acceptable to simply confirm the details of a person’s employment.

“If you do want to provide a character reference for a former employee, do this cautiously as you don’t want to run the risk of being held liable for defamation because you provided an unfavourable reference for someone that didn’t get the job,” he says.

“In addition, intentionally providing inaccurate information about someone or withholding critical information about an employee could land you in trouble with a claim for misrepresentation from the new employer with the potential to seek compensation for damages.”

Ferraro says many organisations now have a ‘no written reference’ policy, providing only a statement of employment certificate. He says this places even more importance on the validity of verbal references.

“My advice to employers regarding their duties and obligations is, if in doubt about a particular employee, don’t provide a written reference,” he says.

Ferraro offers employers some key tips when providing a reference:

• Provide factual and truthful information and avoid disclosing personal details about the candidate’s details that may hinder their chances of securing a role.
• Don’t talk up a poor performer for the sake of placing them elsewhere.
• If you can’t answer the questions honestly, or you don’t want to be negative, don’t answer the questions.
• Instead of providing a character reference, this could be handled by saying, “I know Sharon in a professional capacity and, to my knowledge, she did her job properly.”