TSB Bank plc v Harris [2000] IRLR 157

The House of Lords Employment majority decision in Spring v Guardian Assurance in 1994 that an employer who provides a reference is under an implied contractual duty to use skill and care in preparing the reference has been developed further in the case of Harris v TSB. The Spring case established the duty owed by a former employer to an ex-employee. In Ms Harris's case she was still working for the TSB when they supplied a reference about her to the Prudential.

Ms Harris, an Investment Advisor, had performed consistently with the TSB. She knew of two complaints which had been made against her, one of which resulted in her being given a final written warning for forgery. (She had corrected an entry on a form and initialed it with the customer's own initials to save time.)

She applied for a job at the Prudential and explained both complaints at the interview. The Prudential then requested a reference from TSB.

The TSB provided a reference limited to the factual history of her employment. It recorded that there had been 17 complaints against her, 15 more than she knew of, and that four of them had been upheld and eight remained outstanding. The reference said nothing about Ms Harris' character nor ability to undertake her job.

The Prudential withdrew the job offer. Ms Harris resigned from TSB and claimed constructive dismissal on the basis that the reference provided on her behalf was in breach of the implied terms of mutual trust and confidence.

The Employment Appeal Tribunal upheld the Tribunal's decision that Ms Harris had been unfairly dismissed. The TSB's use of unrevealed complaints which blocked her progress amounted to a fundamental breach of the implied term of trust and confidence. It should have made Ms Harris aware of the complaints before the reference had been given in order to allow her the opportunity to address the damaging information which was on her file. The reference supplied was unfair and misleading and not prepared with due skill and care.

Although the reference complied with the financial industry's guidelines, the duty of the TSB to it's regulatory body was not the measure of the duty of the TSB to it's employees. The minimum reference demanded by Industry Practice meant the TSB had misled the prospective employer as to the ability and character of the employee.

This decision strengthens employee rights and puts employers at considerable risk if they pass on negative information contained in an employee's personal file of which the employee has not been made aware before the giving of the reference, even if this is the industry standard.