Employment law

Employment references

TSB Bank Plc v Harris (2000) IRLR 157Until a few years ago, the legal obligations on employers as regards the giving (or withholding) of references in respect of current or former employees were limited.

That is no longer the case.

This decision of the EAT provides a striking example of how far the law has moved.

As the editor of the IRLR says, one of the key points to emerge is that 'an accurate and truthful reference may not be a reasonable and fair reference' - a conclusion that will come as a surprise to many employers.

The EAT upheld a tribunal's decision that the employers were in fundamental breach of the implied term of trust and confidence by revealing in a reference to a prospective employer complaints against the applicant of which she was unaware, thereby blocking her progress in the financial services industry.The House of Lords' decision in Spring v Guardian Assurance Plc (1994) IRLR 460 provided authority for categorising the matter as an allegation of breach of contract such as to give rise to a constructive dismissal.

On the facts, the tribunal was entitled to find that the employer's practice of revealing in a reference complaints which the employee did not know about and had been given no opportunity to answer was misleading and potentially destructive to her career.

The employers could have ensured no harm was done by informing her of the complaints against her when the question of a reference arose, or of providing a fuller reference.There was a breach of the implied term even though, in disclosing the complaints in the reference, the employers were only doing what was required of them under industry regulations.

The employers' obligation to their regulators was not the measure of their obligations to their employees.

In any event, there was nothing in the regulations to prevent disclosure of complaints so that employees could be forewarned at the time of the reference being given.

Finally, the tribunal had not erred in holding that the employee resigned as a result of the employer's breach, even though she was considering departure in any case.

Because of the breach, she left without another job to go to, which is different from leaving to go to another job.

There was no evidence to force the conclusion that she would have left in any event, and thus the finding of unfair dismissal was legitimate.Transfer of Undertakings (Protection of Employment) Regulations (TUPE)University of Oxford v Humphreys & Associated Examining Board (2000) IRLR 183The Court of Appeal upheld the High Court's refusal to strike out a claim for damages for wrongful dismissal by an employee who treated his contract as ended on the grounds that the transfer of the undertaking in which he was employed would involve a substantial and detrimental change to his working conditions.

In a case where employees object to their employment being transferred because they do not wish to work for the transferee, in accordance with reg.5(4B) of TUPE, their employment is terminated by the transfer and the employee is not able to claim there has been a dismissal by the transferor.

However, where a transfer will involve a substantial and detrimental change to an employee's terms and conditions of employment within the meaning of reg 5(5) of TUPE, the employee is entitled to treat his contract as terminated by the employer and to seek compensation.

If this is the case, the employee's right exists against the other parties to the contract, that is, the transferor, in the absence of any statutory novation.

by Martin Edwards, Mace & Jones, Liverpool