Can your employer give you a bad reference?
It is commonly assumed that a previous employer must give a reference and is legally prohibited from giving a bad one. This is not the case. Your employer can give you a bad or unfavourable reference, but only if they genuinely believe it to be true and accurate and have reasonable grounds for that belief. Your employer is, in fact, not obliged to give you any reference at all (unless the right is specifically stated in your contract of employment or a Settlement Agreement).
Any information given in a reference must not be misleading to a future employer i.e. it must not lead a reasonable person to make an incorrect inference, whether as a result of the information itself or the manner in which it has been recorded.