Other than some exceptions within regulated industries there is generally no requirement on employers to provide an employment reference – there is just an obligation on employers, should they choose to provide a reference, that they take reasonable care to ensure the information given is accurate.
There is also no legal requirement for settlement agreements to include an employment reference, however, employment references are commonly included in a settlement agreement (and is one of the benefits of signing a settlement agreement) and if one is not in your original settlement agreement it is certainly something that we at Just Employment we would recommend is negotiated.
Most employers are willing to provide employment references in a settlement agreement, but many employers will only confirm factual matters such as dates of employment and your job title, however, some may be willing to expand the employment reference to include details of your duties and possibly your abilities.
The reference clause will usually be drafted to put an obligation on an employer to provide the specific reference when prospective employers make an enquiry. The reference will usually be attached to the settlement agreement as a schedule or annex. The settlement agreement may also specify that telephone enquiries should be responded to with just the information in the agreed reference. Having an agreed reference is useful because it should prevent the employer from disclosing any further, potentially negative, details about you.
An employment reference is therefore a valuable element of a settlement agreement so don’t forget about it!