What Employers Can (and Can’t) Say in UK Employment Reference Letters

If you run a small business, there’s a good chance you’ll be asked to provide an employment reference letter at some point - whether it’s for a current team member moving on, a former employee applying for a new role, or even a lender/landlord asking for confirmation of income.

On the surface, it feels straightforward: write a few lines confirming dates and job title, send it off, and get back to work.

But references can create real legal and reputational risk if they’re inaccurate, unfair, inconsistent, or disclose information you shouldn’t be sharing.

In this guide, we’ll walk through what you can (and can’t) say in an employment reference letter in the UK, how to keep your process consistent, and how to protect your business while still being helpful.

Are Employers Legally Required To Provide An Employment Reference Letter?

In most situations, UK employers are not legally required to provide an employment reference letter. That surprises a lot of business owners - but it’s generally true.

That said, there are a few important exceptions and practical realities:

• Contractual obligations: the employment contract, a settlement agreement, or an internal policy might say you will provide a reference (or set out what it will include).
• Regulated industries: some roles (particularly in financial services and certain regulated sectors) may have specific reference requirements (for example, where a regulator expects a reference as part of a fit-and-proper or certification process).
• Commercial reality: even if you can say “no”, refusing to provide any reference can create friction, lead to complaints, and sometimes escalate into disputes.

It’s worth having a clear approach before the request comes in. A consistent policy helps you avoid the “we did it for one person but not for another” problem, which can trigger allegations of unfairness or discrimination.

If you’re wondering where you stand on refusing, this is a useful starting point: Reference policy.

What Can You Include In An Employment Reference Letter?

Most small businesses choose to provide a “basic” or “factual” reference. This is usually the safest option because it reduces the scope for disagreement and keeps the reference verifiable.

Common inclusions in an employment reference letter are:

• Employee’s full name
• Job title(s)
• Employment start date and end date (or confirmation they are currently employed)
• Work location (optional)
• Employment status (e.g. full-time/part-time)
• Brief outline of duties (optional, and ideally consistent with the job description)
• Confirmation of salary (only where it’s necessary and you have a lawful basis to share it - for example, the employee has asked you to provide it, or it’s needed for a specific purpose like a mortgage or tenancy reference)

If you want to go a step further, you can include performance-related comments - but you should do so carefully. The more subjective the reference becomes, the more you need to ensure it’s supported by evidence and framed fairly.

Factual vs Character/Performance References

In practice, references tend to fall into two categories:

• Factual reference: confirms objective information (dates, role, etc). Low risk and commonly used by employers.
• Character/performance reference: includes opinions about conduct, performance, strengths, or suitability. Higher risk if not handled properly.

There’s no rule that you must provide only a factual reference - it’s a business choice. But if you do provide performance comments, make sure you’re prepared to justify them.

Having a consistent format helps. Many businesses use an Employee reference template so the basics are covered every time, and any additional commentary is controlled.

What Employers Can’t (Or Shouldn’t) Say In A Reference

There isn’t a single “blacklist” of forbidden words for employment references in the UK. Instead, the risk comes from how the reference is used and whether it causes harm because it’s inaccurate, misleading, or unlawfully discriminatory.

Here are the big categories to watch.

1. False Or Misleading Statements

If you provide a reference, it should be:

• True (factually accurate)
• Fair (not distorted or presented in a way that misleads)
• Not misleading by omission (for example, praising someone’s “excellent attendance” if you know they had persistent unexplained absences may be risky, depending on context)

A common small business trap is trying to be “kind” by overstating performance, then later being asked to confirm details or explain why they left. If your reference creates a false impression and a new employer relies on it, you can end up dealing with an accusation of negligent misstatement.

2. Discriminatory Comments (Even If Unintentional)

References can create discrimination risk if they include commentary connected to a protected characteristic under the Equality Act 2010 (such as age, disability, pregnancy/maternity, religion, sex, sexual orientation, race).

Examples of high-risk areas include:

• Commenting on pregnancy, family plans, childcare arrangements, or maternity leave
• Referencing health conditions or disability (even indirectly)
• Making assumptions about someone’s capacity based on age
• Including stereotypes (“not a cultural fit”, “too sensitive”, “aggressive”) without objective evidence

Even where you believe you’re being factual, it can still be interpreted as discriminatory if it’s irrelevant to the role or inconsistent with how you treat other people.

3. Medical Information Or Excessive Personal Data

As an employer, you’re handling personal data, and references are one of the easiest places to accidentally share more than you should.

Generally, you should avoid including:

• Details of medical conditions
• Information about sickness absence reasons
• Information about disciplinary allegations that are unproven
• Personal circumstances unrelated to work

Remember that under UK GDPR and the Data Protection Act 2018, you should only share personal data that is relevant, necessary, and accurate - and you should have a lawful basis for doing so. In many cases, that won’t require “consent” (and consent isn’t always appropriate in an employment context), but it does require you to be clear about why you’re sharing the information and to keep it proportionate.

If you’re unsure what you can lawfully share, it’s worth grounding your approach in solid privacy compliance. A good starting point is having the right Privacy Policy and making sure your internal HR processes align with UK GDPR and the Data Protection Act 2018.

You can also reduce risk by keeping references factual unless you have a specific, documented reason to include more.

4. Anything That Breaches Confidentiality

References shouldn’t disclose your confidential business information (client lists, commercial terms, internal disputes, financial issues) or information you owe confidentiality obligations to others (for example, another employee who raised a grievance).

A reference that casually mentions “they were investigated due to X complaint by Y” can create a privacy issue for multiple people - and can fuel workplace conflict after someone has left.

If confidentiality has been a recurring issue for your business, it may help to tighten up your contracts and policies. This links closely to Confidentiality and having clear rules about what information staff can share internally and externally.

How To Manage “Tricky” Reference Scenarios (Disciplinary Issues, Poor Performance, Dismissal)

This is where most small businesses get stuck: you don’t want to sabotage someone’s future, but you also don’t want to mislead another employer or expose your business to legal risk.

Let’s break down a few common scenarios and a practical way to handle each.

When The Employee Left On Bad Terms

If someone resigned suddenly, left during a dispute, or there was conflict, it’s usually safest to provide a short factual employment reference letter only.

Key tips:

• Keep it objective: dates, role, and (if requested) basic duties.
• Avoid “coded language” that implies misconduct without saying it (this can still be defamatory or misleading).
• Don’t editorialise about attitude, reasons for leaving, or internal issues.

When There Was Poor Performance

You’re allowed to give an honest reference, but the words “poor performance” can become a flashpoint if you can’t support them.

Ask yourself:

• Do you have documented performance management records (objectives, feedback, review notes)?
• Did you apply a fair process consistently?
• Is the performance issue still relevant to the role they’re applying for?

If your records are thin or inconsistent, a factual reference is usually the safer option. If you do comment, keep it proportionate and evidence-based (for example, “met some targets but not others, as documented in annual reviews”).

This is also a good reminder that solid HR foundations reduce risk across the board - including references. Having a well-drafted Employment Contract and clear performance processes makes your position much easier if you’re challenged later.

When There Was A Disciplinary Investigation

Small businesses often ask: “Do we have to disclose disciplinary history in an employment reference letter?”

Usually, no - especially if you’re giving a factual reference. But be careful if you decide to include it.

As a general risk-management approach:

• If allegations were not proven, disclosing them can be particularly risky.
• If there was a proven serious issue and you choose to mention it, you should be accurate, fair, and avoid speculation.
• If the new employer asks a direct question (e.g. “Have they ever been disciplined for dishonesty?”), you need to think carefully before answering - because a misleading answer can also create risk.

Where possible, align your practice with a documented reference policy and get advice for difficult cases.

When The Employee Was Dismissed

If someone was dismissed, you can still provide an employment reference letter. Many employers choose to provide a factual reference only, without stating the reason for leaving.

If you do mention dismissal, stick to verifiable facts (for example, “employment ended on ”). Avoid emotionally loaded descriptions.

Also, remember that how you communicated termination matters. If you need to formalise exits cleanly and consistently, a compliant Termination letter can help reduce confusion later when reference requests come in.

How To Set Up A Reference Process That Protects Your Business

The best way to reduce reference risk isn’t to argue over individual words when a request lands in your inbox - it’s to set up a simple process you can apply every time.

1. Decide What Type Of Reference You’ll Give

Most small businesses choose one of these approaches:

• Factual references only (lowest risk)
• Factual references + limited performance comments (moderate risk, needs consistency and records)
• Full references (highest risk, generally not recommended unless you have clear, well-kept HR documentation)

Once you decide, write it down as a policy and apply it consistently across staff.

2. Limit Who Can Give References

To avoid mixed messages, it’s smart to limit references to:

• HR (if you have it)
• The business owner/director
• One nominated manager trained on what to include

This helps prevent well-meaning supervisors from sending informal references that contradict your official position.

3. Get Consent Where Appropriate

If you’re sharing anything beyond basic employment details (like salary or performance commentary), consider confirming in writing what the employee wants you to share and the purpose of the reference. Depending on the circumstances, your lawful basis might be the employee’s request, your legitimate interests, or another appropriate basis - but the key is to make sure what you share is necessary and proportionate.

This won’t remove all risk, but it helps manage expectations and reduces misunderstandings.

4. Keep A Record Of What You Sent

Keep a copy of each reference you provide and note:

• Date sent
• Who requested it
• What information you disclosed
• Any lawful basis/permission you relied on (where relevant)

If there’s a dispute later, you’ll be glad you can produce the exact wording.

5. Be Careful With Email References

References are often sent by email for convenience. That’s fine - but remember that email can still be legally significant, and casual phrasing can create unnecessary risk.

If your team is giving confirmations by email (even short ones), it’s worth ensuring they understand when communications can have legal consequences. This connects closely to Emails and how written statements can be relied on later.

Key Takeaways

• In the UK, providing an employment reference letter is usually not legally required, but refusing can create practical and relationship issues, so it’s worth having a clear policy.
• The safest references are typically factual - confirming job title and employment dates - because they’re easy to evidence and less likely to be disputed.
• If you choose to include performance or character comments, make sure they’re accurate, fair, and supported by documentation (and applied consistently across staff).
• Avoid including medical details, irrelevant personal data, or confidential information - references can raise privacy and confidentiality risks under UK GDPR and the Data Protection Act 2018.
• “Tricky” situations (poor performance, disciplinary issues, dismissal) are usually best handled by sticking to a factual reference and getting advice if you’re unsure.
• A simple internal process - limiting who gives references, using a template, keeping records, and managing email wording - can significantly reduce risk for your business.

If you’d like help putting a reference policy in place, reviewing your employment documents, or handling a difficult reference request, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.