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COMMON LAW DUTY OF CARE: Liability of Employers and Institutions Regarding References...

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Common Law Duty of Care 1

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Common Law Duty of Care 2 Introduction Currently, it is not easy to ignore the importance of referencing for anyone who intends to get employed. In most cases where job seeking is characterised by cut-throat competitiveness, a good reference from your previous employer or your institution could be the difference between landing the coveted job or failing to meet the cut. Correspondingly, the relationship between your previous employer or your conduct in a learning institution could greatly influence the contents of a reference. Comparatively, issuing of inaccurate references occasioned by negligence, malice or carelessness could have not only debilitating effects on the prospective employee chances but also attract legal repercussions. In this paper, I am going to articulate the duty of care as a common law principle in regard to employer’s liability concerning references. Equally, I shall draw parallel to other institutions such as those of higher learning in their issuance of references in respect to current or former students keen to secure employment. Obligation to provide references Fundamentally, there is no legal requirement that obligates an employer to provide references to its current or former employees. Nonetheless, it only becomes an obligation if such a condition has been expressly provided for either statutorily or by regulations governing such an industry. Commonly, employers and institutions always feel obligated to provide references by virtue of positive duty but not legal one (Middlemiss 2004, p. 59). In instances where such an obligation is legal either by express statutory requirement or implied, the concerned institutions or employers shall provide such references or risk legal consequences. As reasoned by Lord Woolf and Lord Slynn in Spring v Guardian Assuarance plc and others [1994] IRLR 460, HL posited that some instances the obligation to provide a reference can be through an implied contract (Allen 1995, p. 553). In addition, such an obligation can be construed to exist if it is customary to provide one within a stipulated industry and failure to do so would have debilitating consequences for either a student or former employee chances of securing prospective employment (Cabrelli 2014, pp. 164-166). Specifically, in Spring v Guardian Assuarance plc and others the employer was under a legal duty to provide a reference as articulated by Life Assuarance and Unit Trust Regulatory Organisation (LAUTRO) which was a self-regulatory framework for life insurance industry practitioners (Middlemiss 2004, p. 60). Expressly, LAUTRO required employers to submit references to other employers who were covered by that scheme. Equally, as stipulated in paragraph 4 and 6 of Financial Services Agency guidelines, previous employers are under a duty to furnish references regarding employees who intend to perform the customer related function for a new employer (Middlemiss 2004, p. 60). Nevertheless, this becomes an obligation if the previous employer and the prospective employer are both regulated by Financial Services Agency guidelines (Middlemiss 2004, p. 60). Subsequently, if a learning institution stipulates in their internal rules that references will be issued to students and goes further to stipulate how such references shall be issued under what circumstances, it becomes an obligation for them to do so.

Common Law Duty of Care 3 As indicated earlier, there is no legal obligation to provide references unless stipulated by a statute or a regulatory framework. However, refusal to provide a reference based on mala fides can impose liability on the concerned employer or institution. As articulated in the case of Coote v Granada Hospitality [1999] IRLR 452 the employer was found culpable based on the prevailing circumstances (Martin 2006, p. 28). In this instance, the employer was deemed to have victimised his former employee by acting uncooperatively for not providing a reference (Martin 2006, p. 28). As shown in section 4(1) of Sex Discrimination Act 1975, the employee had brought an action against her employer on the ground of sex discrimination. Equally important, the employee was able to show that the employer was discriminative in his actions as there was previous evidence that the same employer had provided a reference for other employees (Martin 2006, p. 28). When a duty of care arises As extensively articulated there is no obligation to provide reference unless it is legally prescribed. However, the absence of obligation does not negate the duty to provide such references accurately. That means employers and institutions will be held liable for breaching the duty of care if they negligently supply inaccurate information in their supply of references regardless of whether such an obligation existed previously. Fundamentally, the duty of care shall be gauged on the standards prescribed in the case of Caparo Industries Plc v Dickman [1990] 2 AC 605 which provides for reasonable foreseeable harm , availability of proximity in the relationship and a justifiable reason to impose such a duty (Kelly, Hammer and Hendy 2017, pp. 223-224). In the context of issuing references, the case of Kidd v Axa Equity and Law Life Assurance Society [2000] IRLR 301where culpability was imposed to the former employer who gave misleading information regarding a former employee and as a result led to loss (Middlemiss 2004, p. 61). Similarly, this duty of care is not just limited to employees as the provider of reference can be held liable by the other employer for giving an inaccurate reference as illustrated in Castledine v Rothwell Engineering Ltd [1973] IRLR 99. In this situation, the employer can bring an action on a misrepresentation if it is discovered that such a false reference induced him/her to employ the concerned employee (Brown 2008, p. 160). Comparatively, it is sometimes blurry to decide which information qualifies as a reference before action can be preferred. As exemplified in McKie v Swindon College [2011] EWHC 469 (QB), [2011] All ER (D) 128 any communication between employers in regard to an employee, despite its level of formality, qualifies as a reference (Holland 2013, p. 171). Moreover, this case clarified the issue of proximity as prescribed by the Caparo case stating that passage of time is immaterial in determining proximity (Holland 2013, p. 171). Uniquely, as stipulated in Caparo case, there must be legal justifications for observing the duty of care. For instance, in Bartholomew v London Borough of Hackney [1999] IRLR 246 the court clarified that employers are under a duty to furnish accurate references and not just favourable ones (Middlemiss 2004, p. 62). The reasoning behind this decision is based on the fact that employers also owe other employers a duty of care as stipulated in Castledine case. However, references based on unsubstantiated facts can be considered as unjustified

Common Law Duty of Care 4 based on the reasoning derived from Cox v Sun Alliance Life Ltd [2001] IRLR 448 (Middlemiss 2004, p. 63). Conclusion There is no clear demarcation on liability imposed on employers and institutions in so far as the provision of references is concerned. Importantly, there is no obligation to provide references for students or employees unless expressly or impliedly prescribed by a legal instrument. In instances where an institution or an employee provides a reference, they must do so in full knowledge that the information given must be accurate. Failure to exercise this duty of care as prescribed by the Caparo case, will inevitable invite legal repercussions to the providers of such information.

Common Law Duty of Care 5 References Allen, T. (1995) ‘Liability for References: The House of Lords and Spring v Guardian Assurance’, Modern Law Review, 58, 553-560 Brown, A. (2008) The Practice Manager's Law Handbook: A Ready Reference to the Law for Managers of Medical General Practices, Oxon: John Wiley & Sons. Cabrelli, D. (2014) Employment Law in Context: Text and Materials, Oxford: Oxford University Press. Dunklee, D. and Shoop, R. (2006) The Principal's Quick-Reference Guide to School Law: Reducing Liability, Litigation, and Other Potential Legal Tangles, London: Sage Publication. Holland, J. (2013) Employment Law 2013, Oxford: Oxford University Press. Kelly, D., Hammer, R., and Hendy, J (2017) Business Law, 3rd edition, Oxon: Routledge. Martin, D. (2006) Discrimination Law and Employment Issues, London: Thorogood Publishing. Middlemiss, S. (2004) ‘The Truth And Nothing But The Truth? The Legal Liability of Employers for Employee References’, Industrial Law Journal: Recent Cases, 33, 5967....