When revenge is bitter sweet

Why employers need to think twice about giving (or acting upon) a bad reference!

Most employers will know that you do not have to give a reference for an employee, but if you decide to give a reference, it must be fair and accurate. What is less well-known is that an employer who gives a poor reference or rejects a job applicant because of a poor reference can be liable to pay substantial damages to that person!

In the case of Bullimore v Pothecary Witham Weld Solicitors and Another a firm of solicitors had provided a poor reference for Ms Bullimore to her prospective new employer because she had pursued a claim of sex discrimination against them. The reference referred to the sex discrimination claim, Ms Bullimore’s "poor relationship" with the firm's partners and that she could be "inflexible as to her opinions"! As a result, the prospective new employer withdrew its job offer to Ms Bullimore. The tribunal found the actions of both the past employer and prospective new employer to be unlawful victimisation.

Ms Bullimore and the prospective new employer reached a settlement before the tribunal remedy hearing. That hearing was therefore limited to a consideration of the compensation the past employer should pay.

The Employment Appeal Tribunal held that it was "evidently foreseeable" that the prospective employer would react to the poor reference as it did, and that its reaction was "a direct and natural consequence of the supply of the information", even though it was unlawful. The Tribunal also noted that the provision of damaging references is a fairly common form of victimisation and a remedy against the recipient of the reference will not always be available (as their response will not always be unlawful). It would therefore be "most unsatisfactory if a claimant who lost the opportunity of employment as the result of such a reference were unable to recover substantial damages from her former employer".

In this case, the past employer was liable to compensate Ms Bullimore for her future loss of earnings, caused by the withdrawal of the job offer, even though the new employer’s conduct was in itself unlawful!

This decision sends a clear message to past and prospective employers alike - that they may both be required to compensate employees for their future loss of earnings if they give or act upon a bad reference because an employee has made a tribunal claim! 

To comment on this article or if you would like further Employment Law advice on references, please contact Jenny Kinman who specialises in Employment Law by clicking here