When it comes to employment references, a distinction is made between final references—which are due and owed only upon termination of the employment relationship—and interim references, which provide an interim assessment of performance and conduct during the current employment relationship.
The importance of interim references should not be underestimated because, according to the case law of the Federal Labor Court, the employer generally binds itself to the content of such references.
This means that if a company issues an interim reference with a “good” or “very good” rating and the employment relationship ends in the short or medium term, there must not be a significant downward deviation in the rating. The reason for this is that, by issuing the interim reference, the company has bound itself to the ratings provided therein.
It is therefore highly recommended to request an interim reference after the employment relationship has lasted for a certain period of time.
If the company refuses to issue an interim reference, this is likely unjustified in cases of doubt, as the right to such a reference is already justified by the freedom of occupation guaranteed under Article 12 of the Basic Law.
When evaluating employment references, one must examine whether:
- they include qualifications regarding the grading,
- all essential elements of the typical evaluation criteria are listed, and
- there is a so-called “coded truth” intended to devalue the employee’s performance through ambiguous phrasing.
Claims for correction of a reference can be asserted out of court and even through a lawsuit filed with the labor court. Reference clauses that assign grades are also regularly the subject of contract negotiations, termination agreements, or court settlements.
It should be noted that, according to recent case law of the Federal Labor Court, reference clauses that assign specific grades are not enforceable in court settlements.
Given the standard nature of these formulations, it is advisable to have the reference letter reviewed by a certified specialist lawyer in employment law.
