A case considered whether a past employer could be liable for the future loss of earnings caused by providing a bad reference.
The Claimant in the case of Bullimore v Pothecary Witham Weld Solicitors and Another
had previously brought a claim for sex discrimination against her past employer. A prospective employer requested a reference from the previous employer, who provided a reference which referred to the sex discrimination claim and stated that the employee had a "poor relationship" with the firm's partners and could be "inflexible in her opinions". As a result of this reference, the prospective employer did not employ the employee.
The employee brought a claim against the prospective employer, as well as the past employer. The prospective employer settled prior to the hearing. The Tribunal considered that the prospective employer's unlawful action of rejecting the employee on the basis of the reference broke the chain of causation so that the past employer was not liable. The EAT reversed the Tribunal's decision and considered that it was foreseeable that the prospective employer would react as it did. As a matter of fairness, the past employer should be liable for the result of its actions. The case has now been re-submitted to the Tribunal to consider the level of damages to be awarded.
Many employees now have a policy of only providing factual references. The above case is a classic example of the dangers in going beyond a purely factual reference. In our view, the risks are not worth running.