Truth Or Lies: Providing Employment References

Are you one of the growing numbers of Canadian employers who are reluctant to provide employment references for former employees? Concerned you are going to be sued by a former employee for defamation if your reference is not positive enough? Concerned that you are going to be sued for misrepresentation by the employer who hires a former employee if things don't jive with the reference you provide?

What is Considered to be an Employment Reference?

An employment reference is not the same thing as a confirmation of employment (aka letter of employment/service). The latter generally only confirms such things as length of service, positions held, and key duties or responsibilities in such positions. I refer to this as providing "name, rank and serial number".

An employment reference goes further than this. It also includes positive comments - that is when the employment reference is positive - about the employee's skills, abilities, experiences, attitude, working relationships, attendance, involvement, commitment and/or other contributions to the business, and is designed to assist the employee to find employment elsewhere. When such additional details are not provided, there is often an assumption (either rightly or wrongly) made by the prospective employer that these additional details are being excluded for a reason - that there were problems with the employment relationship and, in particular, that the former employer has nothing positive to say about the employee.

So Why Provide a Reference?

Providing a reference often assists an employee post-termination with their re-employment prospects. The quicker that the employee obtains replacement employment, the less likely that the employee will commence legal action against the former employer for wrongful or constructive dismissal and, even if litigation is commenced, the less damages that the employee will suffer for which the former employer will be liable.

Conversely, the refusal to provide a reference letter has resulted in courts awarding higher damages to terminated employees.

Perhaps the best commentary about this can be found in the 2008 Ontario trial decision of Deplanche v. Leggat Pontiac1. In that case, at the time of termination, the 57-year old former Business Manager had been employed for 2 years, earning annual compensation of approximately $63,000. The employer refused her request for a reference letter, citing that it would be inconsistent to do so after terminating for...