Byrnell v British Telecommunications & Anor

An employer has no general common-law duty to provide a reference. Such a duty may arise from a regulatory scheme or an implied custom in a particular trade. Where an employer does provide a reference, it must be accurate, or at least not negligently inaccurate. A short factual reference may properly qualify as a reference; there is no general entitlement to a testimonial or full assessment of performance.

A compromise agreement satisfied the statutory requirements where it identified the types of claims arising from the termination and acknowledged compliance with the statutory conditions. Advice to accept the agreement was not negligent where the settlement represented a substantial payment, litigation was uncertain, and the employer’s position on references was clear.

The claimant appealed against the Master’s order striking out his claims against British Telecommunications, while the second defendant, Mr Stanbury, appealed against the refusal to strike out the negligence claim against him.

The claims arose from the claimant’s departure from employment under a compromise agreement. He alleged that BT had failed to provide a satisfactory reference, had made misrepresentations and had conspired to cause economic loss. He alleged that Mr Stanbury had negligently advised him about the agreement, the value of the settlement and the possibility of obtaining a fuller reference.

The central issues were whether BT owed a duty to provide a reference, whether the short factual reference supplied complied with the agreement, whether the compromise agreement satisfied Employment Rights Act 1996, section 203, and whether the negligence claim against Mr Stanbury had a realistic prospect of success.

1. Claims against BT. The appeal by the claimant was dismissed. There is no general common-law obligation on an employer to provide a reference. A duty may arise in a particular industry under a regulatory scheme, or from an implied custom of the trade. If a reference is given, it must be accurate, or at least not negligently inaccurate.
2. The short factual document supplied by Syntegra was capable of being a reference. The law did not require a testimonial or a comment on suitability for future employment. The reference was not prejudicial when read as a whole, because it made clear that the employer did not provide further comment.
3. The arguments based on the Unfair Contract Terms Act failed. The claimant was not dealing as a consumer, and the agreement was not made on BT’s standard terms of business. The argument based on Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd was also rejected. The agreement had been provided in advance, the claimant had time to consider it, and he obtained independent legal advice.
4. The claimant was given notice and remained employed and paid during the notice period. He was not summarily dismissed within the principle discussed in Cort v Charman. His claims concerning termination were therefore compromised by the agreement, and the conspiracy and misrepresentation claims had no realistic prospect of success.
5. The agreement complied with Employment Rights Act 1996, section 203(3)(b). The earlier decisions of the Employment Tribunal, Employment Appeal Tribunal and Court of Appeal were not undermined by University of East London v Hinton. The agreement sufficiently identified the kinds of claims arising from the termination. Section 203(3)(f) was also satisfied because the claimant acknowledged that the statutory conditions had been complied with.
6. Claim against Mr Stanbury. His appeal was allowed and the negligence claim was struck out. There was no realistic prospect of showing that he should have advised the claimant that the agreement was invalid, that he had been summarily dismissed, or that substantially more compensation was available. In the circumstances, advice to accept a payment equivalent to more than 13 months’ salary was not negligent. The advice concerning later negotiation of the reference caused no loss and did not prevent a subsequent claim if a reference were later wrongfully refused.

• High Court (Queen’s Bench Division): The claimant appealed against the order striking out his claim against BT. Mr Stanbury appealed against the refusal to strike out the claim against him. The claimant’s appeal was dismissed and Mr Stanbury’s appeal was allowed.
• Court of Appeal: Permission to appeal from the Employment Appeal Tribunal was refused. Mummery LJ and Tuckey LJ held that the compromise agreement satisfied section 203(3)(b) of the Employment Rights Act 1996.
• Employment Appeal Tribunal: The claimant’s appeal from the Employment Tribunal’s dismissal of his complaints was dismissed.
• Employment Tribunal: The claimant’s unfair dismissal and discrimination complaints were dismissed because they were barred by the compromise agreement.