So I know it is rare to have a hand written reference but it is common place for employers to be asked to provide a reference for that departing employee.  Firstly, there is no obligation to supply a reference unless of course you have agreed to do so as part of a contractual exit package with your employee or have a contractual policy in place.

Secondly, if you do so, you are under a common law duty to the employee and to the new employer to exercise due skill and care in providing a reference.  Failure to do so can leave you open to a negligence claim and liable for the losses that either the new employer or the employee suffers as a result of the reference. Fraudulent references can also leave you open to the tort of deceit.  This is a false and dishonest statement which is intended to be relied upon.  When it is and then the deceived party suffers losses and damages they can bring a claim.

This is often why you see a disclaimer at the end of the reference and why so many employers have a standard policy of only giving a factual reference.  A factual reference is commonly only the start and finish dates and the job title sometimes with the salary contained within it.  I have a standard template for a factual reference in my resources section for free download which can be found here.

For those in the financial services sector, such as banks, investment firms and insurers, additional burdens now apply.  A regulatory reference regime came into force on 7th March 2017.  The regime applies to those applicants being recruited into regulated roles including senior insurance management, management controlled functions and roles involving significant harm.  Relevant firms now have an obligation to seek references covering the last six years and it is designed to prevent the “bad apple” rolling from one employer to the next.

The reference must be in a prescribed form set out in Annex 1 to SYSC 22 of the Financial Conduct Authority Handbook and found here.  Firms are required to disclose all information relevant in determining whether a candidate is fit and proper.  This will include details of any breach of the conduct rules where there has been disciplinary action including formal written warnings.  It has to be provided within 6 weeks and if there has been a breach, its outcome. Even serious misconduct committed more than 6 years ago needs to be included. Firms are also under an obligation to update references given in the past 6 years if information subsequently comes to light i.e. after the employee has left conduct is discovered. Employers cannot include the usual clauses in a settlement agreements to limit the reference given and their discretion must be unfettered to ensure compliance.

The consequences under the regime mirror those in paragraph 2 above but in this case staying silence is indicative of confirmation there is no information questioning whether the candidate is fit and proper and silence could also be deemed as fraudulent.  There is an onus on employers to properly investigate issues that arise and report these to the new employer when the employee moves on.  The regime therefore has far reaching implications for firms and individuals performing regulated functions as these references could end careers.