Out of the blue and after 8 years working in the same company my employer is asking for references for two employers from the past.
Can they do that?
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An employer can do anything which isn't forbade by law or contractual agreement.
In your situation, you are about to be made redundant for reasons which you haven't given. This makes the request for references all the more strange as the primary reason one asks for references is to determine if a potential candidate is trustworthy or qualified. The other reasons are associated with such things as security clearance or background investigations, or potentially when you're being promoted into a role where references might be more critical than they were at the time of your hiring.
Ultimately you have to decide if you are going to provide the references, but I know that I always ask if the friend or former colleague wants to be contacted in the first place. Were I in your situation I would respectfully decline with something like "I value my friends' time and don't believe this would serve any useful purpose." If what they are asking for is merely the name of the employer, you can provide that as it isn't a big deal. But I'd refrain from providing actual names of people who might get pestered for some pointless reason.
Putting my cynic's hat on for a moment, I wonder if this is an attempt to find something from your past to show you did something like lied on a resume, which would mean they could terminate you without any compensation.
Before giving references I would ask what the purpose of the references is. It's a reasonable question - if they just want to verify employment details then you can direct them to HR for your previous companies. If they want to get a references for your quality and behaviour you can reasonable ask what possible purpose that would have. At the least it would be amusing to hear their justification. However refusing at this stage is probably counterproductive. It might give them the excuse they want to fire you with cause instead of laying you off.
If you can provide two people who you know are going to give you excellent references, I would provide them. Alternatively it might be worth giving them what they ask, just very slowly. It should be pretty easy to take four weeks to contact the references you want and get them to agree. Once you have left, and received your redundancy payout, it's going to be a lot harder for them to claw it back for some reason.
As for consequences if you are too slow, this seems like a classic use of "What are they going to do - fire you?"
If they try to make you redundant, and cite the lack of references as a reason, get an employment lawyer. There are plenty around, just use Google to find one.
Consider that the statute of limitations in the UK is five or six year. Eight years is past that. Nobody can expect you to know anyone from that long ago. In my case, only one company that I worked for in the last 32 years is in existence anymore, so I couldn't possibly give you two different references before my current job!
If you think they are out to get you, just tell them (in writing) that you gave them references when you started. If they don't have them, they must have lost them. It's eight years ago. You didn't keep them, it's eight years ago. Your employment lawyer will love this and make them pay.