Introduction

An employment reference is an in-depth letter provided by a previous employer to either an ex-employee or prospective employer, and it provides invaluable insights and information into a professional’s work life, performance, skill, abilities, and suitability for the new role.¹ The act of giving an employment reference to an ex-employee or a prospective employer, is a long age practice that has indeed resulted in both positive and negative outcomes. In some cases, the employee requests such reference from his ex-employer or a prospective employer directly requests same from the former employer, either secretly, or with the knowledge of the prospective employee when considering such a person for a new position.

An employment reference plays a crucial role in the recruitment process. It gives the prospective employer a firsthand knowledge of the abilities and suitability of a prospective employee, and it determines the accuracy of the qualifications and experience stated in the curriculum vitae of the prospective employee. This paper seeks to expound on the obligations of an employer to give an employment reference to an ex-employee, and factors to be considered when the issue of employment reference arises.

Employer’s Obligation to Give Ex-Employee an Employment Reference

Under the common law, the law places no obligation on an employer to provide reference for an ex-employee, unless same is expressly provided for in the terms of employment with the ex-employee or where the ex-employer has undertaken to provide a work reference.² Similarly, under the Nigerian Labour Act, Cap 198, Laws of the Federation 1990, there is no provision requiring an employer to provide work reference or work certificate to the employee.

However, where such a reference would normally be required before being employed in the industry where the employee works, for instance in the financial services industry, the court may in the absence of any express provision of such in the terms of employment, imply an obligation on the part of an ex-employer to provide a work or an employment reference to its ex-employee in appropriate circumstances. It is a practice in our Banking industry where the usual terms of engagement of a prospective employer includes an obligation to issue employment reference to the ex-employee for future employments.

This practice is regulated by our law to protect our Banking industry and eliminate fraud within the banking system. The Banking and Other Financial Institutions Act, Cap B3 LFN 2004 (BOFIA Act) provides that:³

“Any person whose appointment with a bank has been terminated or who has been dismissed for reasons of fraud, dishonesty or convicted for an offence involving dishonesty or fraud shall not be employed by any bank in Nigeria”.

In line with the above provision, Central Bank of Nigeria (CBN) issued a guideline in 2016 mandating banks to always forward the names of affected staff to CBN through the Secretary of the Bankers Committee for inclusion in the Register (Black book) of terminated, dismissed, or convicted staff of banks and other financial institutions. The effect of this is that any individual whose name is listed in the black book is barred from holding any employment within the financial system in Nigeria. This procedure of blacklisting must conform with principle of fair hearing (audi alteram partem) as enshrined under the Constitution of the Federal Republic of Nigeria,1999 (as amended).⁴ Under the guideline, the Banks and other financial Institutions are cautioned against the dangerous practice of advising such staff to simply resign because such financial institution will be severely sanctioned. This makes it obligatory in the Banking industry to issue employment reference.

Duty and Liability of an Employer Who Opts to Give Employment Reference

As mentioned earlier, an employer is not obligated to give an ex-employee an employment reference except in circumstances where there is a duty to do so. The duty and liability of an employer who opts to give an employment reference may arise in different situations. Where an employer has entered into a prior agreement to give a reference on certain terms or where industry regulations mandate the provision of reference to an employee, such employer is obligated to give such reference and an employer who fails to give reference under these circumstances may be liable in damages to the ex-employee.

In the unreported case of Kelvin Nwaigwe v. Fidelity Bank ⁵, the Claimant sued his former employer, Fidelity Bank, claiming amongst others for a right to an employment reference and an order directing Fidelity Bank to give reference of career records on demand to him. In delivering the judgment on 24 January 2016, Honourable Justice B.B Kanyip of the National Industrial Court Lagos Division explained circumstances where an employer may or may not be bound to give an employment reference. The Court held that there was no obligation on the employer to give employment reference except where there is a written agreement to do so, or where the obligation is regulated by industry practice, like in the financial industry, as such there is an implied obligation to give such reference. The Court further held that while discharging the obligation to give employment reference, the requirement of the law is that such reference must be fair, accurate and not capable of misleading a future employer.

In another case of Kefre Ekpo Inyang v. Alphabeta Consulting LLP⁶ decided by the same Judge, the Claimant brought an action against the defendant claiming amongst others, damages for loss of N72,000,000 (Seventy-Two Million Naira) being the Claimant’s basic income and earnings of N600,000.00 (Six Hundred Thousand Naira) per month for the secured initial 10 years term in the claimant’s new contract of employment. The Claimant lost his new employment due to his former employer’s deliberate refusal to provide an employment reference, despite the existing obligation to do as expressed in the Employee Handbook. The court held that the Defendant having accepted the Claimant’s resignation and refused to give the Claimant his Certificate of service despite several demands and notice of the requirement of the certificate to save his new employment, was in breach of a term of the Employee’s handbook, and the Claimant was entitled to bring a claim against him. The Court ordered the Defendant to immediately issue the Certificate of Service to the Claimant, and ordered the Defendant to pay amongst others, the sum of N72,000,000 (Seventy-Two Million Naira only) as compensation.⁷

Another instance where the duty and liability arise, is at the point where the reference is to be given. The law provides that where an employer is giving an ex-employee a reference, such reference must be accurate, fair, and not in any way misleading to anyone who refers to or acts on such employment reference. The law further provides that when giving such a reference, the employer must exercise reasonable care, as such an employer stands the risks of liability in tort or contract where the employment reference turns out to be false, inaccurate, or misleading.

This was first expounded in the English case of Cox & Cross v. Sun Alliance Life Ltd.⁸ In that case, Mr. Cox, a manager was reported to his employer that he had received illegal and improper payments in a transaction he was involved in. The said allegation was investigated, but the alleged misconduct was not proven. However, Mr. Cox resigned after his employer agreed not to mention the unproven allegations in any employment reference to future employers. Unfortunately, Mr. Cox was dismissed from two jobs as a result of his ex-employer’s disclosure of unproven allegations to his subsequent employers. The Court of Appeal held that his ex-employer had breached his duty of care and the agreement between the parties. The Court further held that discharging the duty of care involves an accurate and fair reference after a thorough investigation had been done, and there were reasonable grounds to believe that the said allegations are true. This common law position has been applied in our Nigerian Labour Court, as seen in the unreported case of Kelvin Nwaigwe v. Fidelity Bank already cited above.

Factors to be Considered in Giving an Employment Reference.

Providing employment references to employees is an everyday task accompanied by its inherent risks. As such, employers must be mindful of information provided in these employment reference. The following factors must be considered where an employer elects to give reference.⁹

I. Any reference given needs to be true, accurate and fair, remembering there is a duty of care owed to both the employee and their new employer.

II. Information given regarding the individual’s performance or absence from work should be scrutinized so as to not fall foul of disability discrimination provisions.

III. If reference is made to allegations of misconduct that have not been investigated, the fact that they have not been investigated must be stated.

IV. Written references should be marked as “strictly private and confidential” and addressed to the name of the individual who has requested it only.

V. Employers may wish to consider including a disclaimer of liability within the reference. Although the effectiveness of such a disclaimer will often be limited, there may be certain situations in which a disclaimer does assist in limiting liability.

VI. Consent should always be sought from the individual who is the subject of the reference request. Where such is not expressly stated in the terms of employment or requested directly by the employee in compliance with the Nigeria Data Protection Act, 2023.¹⁰

Conclusion

In conclusion, except where an employer is mandated by industry practice to provide full disclosure, it is best sometimes for employers to adopt the position “no comment” reference by just providing a statement of service confirming an employee’s length of service and not commenting further as this does not expose the employer to any liability. The employer may also provide all the relevant details of the employee, including appraisals and potentials, while leaving it to the potential employer to draw its conclusions. An employer cannot be held liable for defamation in providing this type of reference as long as it is made without malice and the information is based on credible evidence. However, it is safer to provide information based on performance appraisals that were counter-signed by the former employee. This will prevent potential liability for negligent misstatements.

1. hipeople.io/glossary/employment-reference
2. Malik v. Bank of Credit and Commerce International SA (BCCI) (1997) UKHL 23
3. Section 48(4) Bank and Other Financial Institutions Act 8
4. Section 36 1999 Constitution of the Federal Republic of Nigeria (As amended)
5. SUIT NO: NICN/LA/85/2014
6. SUIT NO. NICN/LA/550/2016
7. Kefre Ekpo Inyang -vs- Alphabeta Consulting LLP - LawCareNigeria
8. (2001) IRLR 448
9. What are the things to consider in an employment reference letter? - Quora
10. Section 25 (1) NDPA 2023