Employers have become hesitant to give proper references, for fear of legal liability. On the other hand, the unemployment rate, desperate job seekers and onerous dismissal requirements make prospective employers wary of appointments without reliable references.
In terms of civil litigation, giving an unfavourable reference might expose the employer to a potential defamation suit by the former employee, or a claim for loss of prospective gains as a result of non-employment by a prospective employer. However, a number of factors will have to be proven in order to succeed with either of these claims. Important considerations will include the reason for and content of the reference, and the relevance of the information provided.
An overly favourable but false reference that persuaded a prospective employer to appoint the employee, might be grounds to sue the former employer for damages based on negligent misrepresentation. In all instances, the rights of all the parties (protection vs infringement) will have to be weighed up on a case to case basis.
While it may therefore seem prudent for legal advisors or human resources practitioners to advise employers to either decline or say as little as possible when asked for a reference or to qualify each statement, there is also an argument to be made for providing meaningful references in order to sustain an employment reference system and not lose the value it provides.
A very good exploration of the philosophy behind giving references or not, was done by Martie Bloem, a lecturer in the Department of Private Law at the University of the Free State in Bloemfontein. She wrote a dissertation on the topic (see full document here) and an extract thereof was published in the De Rebus of 1 February 2019: "Employment references: Practical guidelines to avoid delictual liability"
She provided some practical guidelines to employers in terms of navigating legal exposure, whilst still contributing towards establishing a well-functioning and reliable reference system in the South African employment sector:
"It is not recommended that employers simply refuse to provide employment references to avoid the risk of liability. Employers should instead ensure that they provide meaningful, truthful and relevant references, which will make a positive contribution to establishing a well-functioning and reliable reference system in the South African employment sector.
I suggest that an employer consider the following practical guidelines when preparing such references:
Another article on this topic was published on the SEESA-blog by Tersia Landsberg in April 2019, where she also gave some pointers to employers:
"Employment references must be reliable, and therefore not inaccurate or an unsubstantiated subjective opinion about the employee. The purpose of an employment reference is to ensure that the appointed candidate possesses the required skill and competencies and should therefore not contain more information than what is necessary for the prospective employer to make an informed decision.
When asked to provide an employment reference, one should not use the opportunity to disclose all the employee’s shortcomings and wrongdoings. Employers should instead ensure that they provide meaningful, truthful and relevant information. Keep employment references factual and objective, treat all employees equally and consistently and avoid comments that may be construed as discriminatory." (Read the full article here.)
From a practical point of view, employers should ensure that they have an internal policy in place in respect of who may give references, and what process should be followed if a request for a reference is received - telephonically or otherwise. It cannot be left to the discretion of the individual staffer who may pick up the phone, to navigate this in the absence of a clear protocol in this regard.