Getting the Record Straight: Employers’ Duties and Risks in Providing Employee References

Introduction

What obligations does an employer have when providing an employee reference? And when might an inaccurate reference give rise to liability in negligence or defamation?

In Chua Kim Chuan v HSBC Life (Singapore) Pte Ltd [2026] SGHC 189, the Claimant (“Mr Chua“) discovered that a reference provided by the respondent (“HSBCL“) incorrectly stated that he had left AXA Insurance Pte Ltd (“AXA“) due to an “involuntary resignation” for a “failure to complete fit and proper exercise”.

The HSBC Group had bought over AXA, following which AXA was renamed as HSBCL. HSBCL relied on AXA’s electronic records in the provision of Mr Chua’s reference. AXA’s electronic records were later discovered to be inaccurate when compared against its physical records.

Mr Chua brought claims in negligence and defamation against HSBCL. Among other matters, the Singapore High Court had to determine:

1. whether HSBCL had breached its duty of care in failing to check AXA’s physical records;
2. whether any such breach had caused Mr Chua to lose a real chance of securing employment;
3. whether the errors were defamatory; and
4. if so, whether there was malice to defeat HSBCL’s defence of qualified privilege.

Mr Chua’s claims against HSBCL were dismissed in entirety with costs in favour of HSBCL. Certain aspects of his claim were also found to be speculative by the Court.

HSBCL was successfully represented by Rebecca Chew and Priscilla Soh of Rajah & Tann Singapore.

Background to the Dispute

Mr Chua was appointed by AXA before he resigned voluntarily in 2002. He was subsequently appointed by Phillip Securities Pte Ltd from 2002 to 2008.

In 2009, Mr Chua unsuccessfully applied for jobs with several financial advisory companies. In 2010, he joined Marina Bay Sands (“MBS“) as a dealer inspector, where he has been working in MBS since then.

In 2022, AXA was acquired by the HSBC Group and subsequently renamed as HSBCL. In the same year, Mr Chua applied to join Prudential Assurance Singapore Pte Ltd (“Prudential“). Prudential through an agent obtained an employment verification response (“EVR“) from HSBCL, as part of its background screening process on Mr Chua. In the EVR, HSBCL disclosed that:

1. Mr Chua’s reason for leaving AXA was “involuntary resignation” (“Error 1“) for a “failure to complete fit and proper exercise” (“Error 2“). It was undisputed that Errors 1 and 2 were inaccurate.
2. Mr Chua was not the subject of any complaints, disciplinary actions or misconduct.

The EVR was completed based on AXA’s electronic records. There was no reason for HSBCL to doubt the accuracy and reliability of AXA’s electronic records at the material time.

Following the provision of the EVR, Mr Chua’s solicitors requested pre-action discovery from HSBCL of all reference checks concerning Mr Chua. This prompted HSBCL to check AXA’s physical records, which showed that Mr Chua had resigned voluntarily from AXA. HSBCL then immediately clarified the facts with Prudential and apologised to Mr Chua. HSBCL, through its counsel, informed Mr Chua and his counsel to approach them should they have any other requests. No such approaches were made.

Instead, Mr Chua brought proceedings in the Singapore High Court against HSBCL for:

1. negligence for the preparation of the EVR and provision of inaccurate records in the EVR during Prudential’s background screening process;
2. negligence during the period from 2009 to 21 February 2023, for disseminating inaccurate records when Mr Chua interviewed with other prospective employers in the financial advisory industry; and
3. further and/or in the alternative, libel for the publication of Error 2.

Decision of the Court

Negligence Regarding the EVR

It is well established that HSBCL owed Mr Chua a duty to exercise reasonable care in providing the EVR to Prudential. As regards the question of whether HSBCL breached its duty of care, the Court observed that what constitutes reasonable care depends on the gravity of any adverse suggestion or inference in the EVR – the greater the gravity of any adverse inference, the more closely will the employer’s conduct be scrutinised to ascertain whether it has taken reasonable care to ensure that the inference was (i) based on true and accurate facts; and (ii) fair and reasonable, in view of those facts.

While the Court found that HSBCL did not exercise reasonable care in providing the EVR and Errors 1 and 2 did impute an adverse inference, HSBCL was not liable to Mr Chua for negligence.

1. On the evidence, Prudential was aware of the EVR but did not reject Mr Chua’s application outright. Instead, Prudential required Mr Chua to leave his job at MBS before Prudential could accept him.

2. Contemporaneous WhatsApp messages showed that Mr Chua intended to join Prudential part-time as he wished to retain his job at MBS to ensure that he had a secure income. Mr Chua’s application to join Prudential lapsed because he did not follow up to confirm his willingness to leave MBS.

3. It was wholly speculative for Mr Chua to argue that he would not have been able to join Prudential even if he had resigned from MBS because of Errors 1 and 2.

As Mr Chua could not show that the EVR caused him to lose a real chance of employment with Prudential, his claim against HSBCL in negligence failed.

Negligence from 2009 to 21 February 2023

To begin with, Mr Chua did not produce any evidence that AXA or HSBCL had sent an erroneous reference check from 2009 to 21 February 2023. Section 24B of the Limitation Act stipulates an overriding time limit of 15 years from the “starting date” of the negligent act. The “starting date” was the date that HSBCL allegedly provided erroneous references. Mr Chua had commenced his action on 16 August 2024. Thus, any reference check provided between 1 January 2009 and 16 August 2009 was time-barred.

The Court found that Mr Chua failed to provide any evidence that reference checks were sent by HSBCL to other prospective employers between 17 August 2009 and 21 February 2023. There was also no evidence that any alleged reference check caused Mr Chua to lose a real and substantial chance to be hired during this time period.

Defamation

The Court agreed that the words “failure to complete fit and proper exercise” were libelous. Its ordinary and natural meaning suggested that Mr Chua had been asked to resign for reasons relating to a failure to complete the “fit and proper exercise”. This was defamatory as it would lower him in the eyes of prospective employers in the financial advisory and insurance industry.

However, the defence of qualified privilege applies where it can be shown that (i) a defendant has an interest or duty, whether legal, social or moral, to communicate the information; and (ii) the recipient has a corresponding interest or duty to receive the information. It was well established that employee references were an instance where the defence of qualified privilege applies.

Such defence could only be defeated if Mr Chua was able to show malice on HSBCL’s part. He failed to do so, as:

1. There was no evidence that HSBCL knew, ought to have known, or genuinely believed that it was providing untrue information in the provision of the EVR.
2. There was no proof that HSBCL’s dominant motive was to injure or harm Mr Chua.
3. HSBCL was not reckless as to the truth, as it had checked AXA’s electronic records before the EVR was provided to Prudential.

As such, the defence of qualified privilege was not defeated, and the claim for defamation was not made out.

Key Takeaways

This decision highlights that employers must exercise reasonable care when preparing employee references, particularly where the information provided may convey an adverse impression of a former employee. The degree of care required will depend on the gravity of the adverse inference. The more serious the implication, the more closely the employer’s conduct may be scrutinised to determine whether the reference is based on accurate facts and presents a fair and reasonable account of those facts.

Employers should therefore ensure that information contained in a reference is appropriately verified before it is communicated to a prospective employer. The absence of an obvious “red flag” does not necessarily relieve an employer of the need to check its records, especially where the information may carry negative implications for the former employee. However, an inaccurate reference does not automatically result in liability. A former employee must still prove that the inaccuracy caused the alleged loss.

The decision also illustrates the interaction between inaccurate employee references and defamation. Words in a reference may be defamatory if their ordinary and natural meaning would lower the former employee in the estimation of prospective employers. However, employee references will ordinarily attract qualified privilege unless there is proof of malice on the employer’s part. Employers should therefore ensure that references are prepared honestly, on a properly verified basis, and without any improper motive.

For queries on this matter, please reach out to our team, Rebecca Chew and Priscilla Soh, set out on this page.

For assistance with general employment law matters, please contact our Employment Practice, co-headed by Partners Desmond Wee and Jonathan Yuen. For regional Employment matters, please see Rajah & Tann Asia’s Employment Practice Group for more information.