He then learnt that one of his references was considered unsatisfactory and the job offer was withdrawn. By the time the candidate had secured a retraction from his previous employer, the job he wanted was gone.
According to Alannah Hunt, a partner in Price Waterhouse, 'References are absolutely key to any job application.' Ms Hunt is better placed to know than most; she heads the executive search and selection department for the international firm of chartered accountants.
'As a matter of practice we would take up references typically covering the candidate's last five to seven years of employment. There can be difficulties where former employers have collapsed, but in these circumstances there is still usually a former senior executive around who will provide a reference,' Ms Hunt said.
Employers are under no legal obligation to provide former employees with references, even though it is established custom. If they do, however, they are under a legal duty to a future employer to ensure it is accurate.
The employee's position appears to have weakened, as a result of a case decided earlier this year in the Court of Appeal. The court held that employers did not owe a duty to employees to ensure that a reference was accurate. In order for an employee to obtain compensation from an employer for financial hardship caused by a misleading reference, the employee must show not only that the reference was untrue but also that the employer was motivated by malice.
The court reasoned that it preferred to encourage frankness in employers rather than increase employees' legal rights.
Richard Monkoom, an employment specialist at the City law firm Druces & Attlee, said: 'Whenever possible I would advise employees to negotiate the format of any reference with their employer prior to their departure. It prevents any acrimony or misunderstanding in the future.'
Many employers seek to exclude liability for the contents of a reference. But this exclusion can be circumvented by telephoning the employer to seek clarification on any points of concern. In such circumstances, the employer is less likely to remember to verbally exclude liability.
In the present employment market, some employers find that between the time an offer is made and the proposed starting date, they are no longer able to take on a new employee. Some seek to rely on the argument that the references received are not satisfactory.
Recent case law has stated that whether references are satisfactory or not is a subjective test, allowing that employer total discretion. This means that an employee may resign from one job confident he has received a good reference, but may still not be guaranteed his new job. This is hardly a comforting thought, even during a recovery.Reuse content