Everything you need to know about professional references

We look at several issues, as this can be more complicated than it initially looks! (updated 2025)

Do Employers have to seek references when recruiting?

Generally, there’s no legal obligation on employers to seek references for new employees.

Employers can choose not to seek references and to rely on information provided by the candidate instead, particularly if the role is temporary or the employer requires someone urgently.

However, most employers prefer to obtain at least one reference from the applicants’ current/previous employer to verify the accuracy of the information provided. Employers in the finance sector are required to obtain references when recruiting for an “approved person” role.

Employers should generally not approach the prospective employees’ current or previous employer unless the candidate has given permission, for data protection reasons.

Employers should also respect a request from a job applicant not to contact their current employer until the appropriate time.

Is there a legal obligation for a previous employer to give a reference to their ex-employee?

There is no legal right for a employer (the referee) to provide a reference about an ex-employee, whether the request is from the ex-employee, another employer, a bank or a landlord, unless this was a requirement of their employment contract.

However, if an employer is regulated by the Financial Services Authority and they receive a reference request relating to a former employee who was an ‘approved person’, whose new role will include performance of a ‘controlled function’, the employer is obliged to respond as soon as reasonably possible, and to provide all the relevant information.

An employer may also have an obligation to provide a reference for a former employee if they’ve agreed to do so under the terms of a Settlement Agreement (which is a mutual agreement that the employee’s employment is to be terminated). In these circumstances, specific wording to be included in the reference is often agreed between the parties when drawing up the settlement agreement.

Can a new employer withdraw a job offer on receipt of a bad reference?

Yes, if a job offer has been made that’s conditional on receipt of satisfactory references, the employer can withdraw the job offer if it receives what it considers to be a bad reference. The employer should investigate the situation further though, before withdrawing the job offer, to see if the individual is unsuitable or not and whether it wishes to employ them.

The employee affected may have the right to see this reference. There are two possible ways:

• The Data Protection Act 2018 (following the GDPR) includes a specific exemption for confidential references given (by an ex/current Employer) for the purposes of prospective or actual employment, so that the references does not have to be disclosed to the employee, and the employer can refuse to show the employee the reference (even if the employee raises a Subject Access request). The exemption applies to confidential references so it would be a good idea to mark any references you give as ‘confidential’ to avoid any argument that they are not caught by this exemption.

However, the recipient of the reference (the prospective employer) may disclose the reference to the employee if the employee asks. However the prospective employer isn’t obliged to comply with the request from the employee unless the author of the reference (ex-employer) agrees to this, or it’s reasonable to comply with the request without the author’s consent. If the author of the reference has compelling reasons for the reference to be edited or not disclosed the prospective employer cannot disclose the reference.

• The individual employee, if they believe a negligent reference has been given about them, can take Court proceedings against their ex/current-employer

When a previous employer provides a reference what obligations do they have?

• An employer owes a duty of care to the recipient of the reference (the prospective employer) to ensure that it is true, accurate and fair, and doesn’t give a misleading impression. The employer giving the reference could be sued by the recipient if it gives a negligent or careless reference which subsequently results in financial loss to the recipient
• The employer also owes a duty to the ex-employee to take reasonable care in the preparation of the reference. If, for example, the employee fails to secure a new job because of an inaccurate or misleading reference, he or she will be able to sue his or her ex-employer for damages (libel, discrimination or defamation of character). Following a case in 2011 that went to the High Court, this appears to apply regardless of how many years ago the employee left their previous employer
• Employers should therefore ensure that the information they give in a reference is accurate and genuinely or reasonably believed.
• Employers should always be consistent about they type of information they provide on references, and when references are given. Employers should consider whether they have need for a Reference Giving Policy that makes this clear to all/any managers who are asked to provide references.

Data provided in a reference is likely to be ‘personal data’ covered by data protection legislation (the GDPR and Data Protection Act 2018). Therefore, the employer must satisfy one of the conditions required for processing data when giving references – the most likely condition to apply is that the individual employee has consented to the data being processed. Confirming dates of employment and length of service and probably salary should not be a problem as this is factual information, even though it is of course ‘personal data’ of an employee, but confirming an employees attendance records, or disciplinary records may require specific consent from the employee which may be hard or impossible to achieve, as under GPDR, consent must be voluntary, explicit and informed.

The prospective employer could send the previous employer a photocopy of the individual’s signed consent to its seeking the reference, in the reference request. This will normally be sufficient for the previous employer to process the personal data.

If the previous employer has any doubts about whether or not the employee has given consent to the reference, they should contact the employee to check. The employer should obtain their consent in writing if possible, or should at least make a note of the individual’s verbal consent.

To obtain the individual’s explicit consent, the employer should write to him or her, asking for their written consent to the request and clearly stating:

• Why it wishes to process the data
• The specific information to be processed
• To whom the information is being given to
• For what purpose the information is being provided.

References should also be marked ‘confidential’ and for the attention of the addressee only.

Many employers add a disclaimer to the reference, stating that they can’t accept any liability for errors or omissions in the content of the reference. A disclaimer will be effective only if it’s reasonable. If the employer has, or would be expected to have, direct knowledge of the information provided, it’s unlikely to be able to rely on a disclaimer if the reference contains information that’s not true, accurate and fair.