Letters of Reference – bad idea?

Hand writingEarlier this fall there was a program on the CBC’s “The Story From Here” which ran a segment about a woman named Jo who, during a job interview, learned that her former employer had refused to provide her with a reference.  Her former employer had adopted a “no references policy”.

Jo explained that she felt quite embarrassed by the experience.  The refusal seemed to suggest that she was not a good employee.  The prospective employer seemed to share that perception – she did not get the job.

The issue of whether to offer letters of reference to departing employees is one that employers sometimes struggle with.  According to the interview, there is a growing trend among employers towards the “no-reference policy” which is reportedly more common in the United States.

Reasons that employers do not want to provide letters of reference appear to be varied and include:

  • Not having anything good to say about the employee;
  • Concern that by providing a positive letter the employer will misrepresent the skills of the employee to others within their industry to the detriment of their own reputation; and
  • Fear of law-suits.

The law-suit fears seem to be based on two potential scenarios.  In the first, the employee sues their former employer for giving a false or malicious reference.   Employees could potentially also sue their former employer if the employer divulged confidential information that they were not authorized to disclose.

The other situation is one where the new employer sues the former employer for negligent misrepresentation.  For example, one could imagine a new employer being rather put out if the former employer had told them that the jeweller they were thinking of hiring was very trust worthy when in fact they were fired for theft.

A cursory examination of the case law did not turn up any recent cases in Ontario where one employer was suing another for a false reference. If other people know of any cases I would be interested in seeing them.

While some letters may be easier write than others, as a general rule I think a well-crafted letter of reference that is mutually agreed upon at the time of an employee’s departure is more likely to help than hurt both the employer and departing employee.

For an employee, receiving a positive letter of reference can help take some of the sting out of a termination and assist in transitioning to a new job.    From an employer’s perspective, an employee who is working elsewhere has less incentive to bring or maintain a claim for wrongful dismissal, particularly if the salary is the same (or better).  An employee who finds another job is said to have mitigated their losses.  Furthermore if it is a letter both parties sign off on and provided directly to the employee the risk that the employee will claim it was false or negligent would presumably be reduced.

A reference letter need not be long and it must be truthful but in most cases an employer can at least confirm the dates of employment, relate some of the specific job related tasks that the person performed in the course of their job and if possible, comment on a positive accomplishment or contribution the employee made to the company.

Treating a departing employee in a courteous and professional manner that enables them to transition more smoothly is in everyone’s interest.

This blog was adapted from an earlier article published in Faces Magazine’s November 2013 issue. Read the original here.

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