There can often be some misunderstanding amongst employers regarding their duty to provide references for former staff. However, there is no legal obligation for our clients to comply with a reference request, unless they operate in a regulated industry or if this is expressly stated as a contractual provision.
Having said this, it is relatively unusual for an organisation to refuse requests to provide a reference and doing so to punish an employee for involvement in harassment claims, or whistleblowing, will be unlawful. If our clients are going to withhold a reference, it is important to make sure this approach is applied universally, as any inconsistency in giving references is likely to increase the chances of former employees feeling that they have been discriminated against.
On the other hand, if you clients do agree to provide a reference then they have a duty of care to ensure the information given is accurate and fair. After all, there is a risk that our clients could face claims of defamation, or malicious falsehood, for providing unfavourable statements that are untrue, especially if these cause individuals to miss out on a job.
As a result, it will be wise for our clients to stick to providing basic references that confirm details such as the individual’s position and their length of employment. Whilst they can always add more information regarding the individual’s performance if they wish, they must ensure that this remains a true representation of their time with the business.
With this in mind, it is worth noting that the government have confirmed plans to consult on making it mandatory for employers to provide simple references for staff. Although there is no indication that this is close to becoming a legal requirement, this proposal is designed to prevent situations where employers are able to silence victims of workplace harassment with the threat of withholding a reference.
As such, it may be wise for our clients to get ahead of the curve and implement their own approach to providing simple employee references, making sure to outline this in a relevant workplace policy. 
 Reproduced with permission on Croner Taxwise