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References and Settlement Agreements

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References and Settlement Agreements


Under a Settlement Agreement it is likely that an outgoing employee will want to secure a reference for their new employment. There is no requirement on any business to provide a reference to an outgoing employee unless they are in a regulated industry, such as banking, finance or care.

Under a Settlement Agreement an agreed reference can be drawn up between the parties to be used when a request is made by a future employer. These references could include details of:

  1. The employee’s start date;
  2. The employee’s end date;
  3. The job title;
  4. A description of the main duties of the employee;
  5. An assessment of how these duties have been performed; and
  6. A comment on integrity and timekeeping.

The reference could also include a personal statement from a manager about, for example, how well the employee worked as part of a team or their general attitude towards work.

There is no requirement for an employer to provide a favourable reference, the reference must only be true and this is the importance of negotiating an agreed form of reference under Settlement Agreement.

If the employer does agree to provide a reference to the employee as part of the agreement, the employer should not deviate for the agreed reference when they provide this to a new employer. If an employee suspects that they have not provided the correct reference, for instance if they suddenly had their job offer withdrawn, the employee can make a Subject Access Request for this information as it is covered by Data Protection law with the potential new employer. If the former employer has not conformed to the terms of the agreed reference then there is a liability under contract law for a breach of the settlement agreement.

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Speak to a member of our team today by contacting us on 0845 225 2635 or completing our online contact form here.

For business law advice call 0114 249 59 69


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