"That's All You Can Tell Me?" A Closer Look at References

"That's All You Can Tell Me?" A Closer Look at References

Reference letters are a bit of a tricky business. At the best of times, they come from an employee's request at the end of a contract, where the employer may not be able to offer any more work but sincerely wants to help the employee achieve success in a new position. These letters can be warm and genuine, and any verbal references provided by the employer are often equally positive. 

On the other end of the spectrum, a reference letter can be given at the most difficult of times - once a terminated employee and their lawyer finish negotiating a settlement with the former employer following a rocky termination. In these instances, a reference letter and/or verbal verbal reference can form part of the deal in exchange for the employee signing off on a release. Reference letters in these situations, however, may not have the same 'glowing' tone.

Usually in these cases the employer is only willing (if they are at all) to offer their former employee a lukewarm confirmation of employment, or what employment lawyers refer to as a 'tombstone letter.' This type of letter will state that the person worked for the employer, but says nothing else. 

If an employer is still reeling from being sued by an employee they may have previously been enamoured with, a letter of reference can feel like asking for a positive review from an ex following a bad break-up. Yet a letter that is completely impersonal will tell a potential new employer nothing of a candidate's work experience, skills, or talents.  

Traditionally, the reluctance to give a positive reference letter is a trait commonly seen amongst US-based employers. American HR policies can be vastly different, and a reference letter may simply not be in the employer's standard practice.

However when it comes to terminations, a positive letter of reference can serve everyone's best interests. Not only is it beneficial for the former employee, but the financial settlement agreed to by the parties can be contingent on that employee finding a new position. In turn, the employee finding new work may ease the former employer's financial burden. When it comes to reference letters you can, as the old saying goes, win more flies with honey than with vinegar. 

"Do I Have To?"

Yes a reference letter may be a nice gesture, but is an employer legally obligated to provide one? The short answer is 'no,' however the Courts have historically been far kinder to employers who go that extra mile. In a 2007 Ontario Court of Appeal decision, the Court held:

“There is no legal obligation on an employer to provide a letter of reference. However, a threat to withhold a letter of reference by the employer as part of a negotiation/litigation strategy may, in some situations, provide valuable support for an employee’s subsequent claim that a release was unconscionable and should not be enforced.”

In other words, using the reference letter as a bargaining chip in exit negotiations can have serious legal consequences. The other common legal myth surrounding reference letters is that an employer can be sued for a reference letter if the employee performs poorly at their next job. Rest assured, employers, there is no such legal liability in Canada. 

For employers, while the law says that you do not have to provide a reference letter, it may not be a bad idea in most cases. It can be difficult to find kind words about an employee when they leave on strained terms, but even a letter simply outlining their job duties and work experience can go a long way. An employment lawyer can provide specific advice on what sort of reference letter a certain situation may warrant, and when 'less is more' may apply. 

For employees, it usually never hurts to ask, but do so wisely and with some forethought. Know that while it may be nice to receive a reference letter from a past employer, they are not obliged to give you one, nor may you agree with everything they have to say. If you are seeking a reference from a former (or current) employer, it is best to make sure that you will not violating your employment contract or any workplace policies by doing so.

Lastly, and this one is simply common sense, but it is always good for employees to give someone a 'heads up' wherever possible that they may be receiving a phone call. While you may be hearing George Costanza screaming at Cosmo Kramer to "SAY VANDELAY INDUSTRIES" in your head right now, you never know what can happen when someone receives a reference check by complete surprise. An employment lawyer can best help you navigate the transition to a new role and explain your rights and responsibilities along the way.

The bottom line is that while a reference letter is not a legal requirement, something more in-depth than a 'tombstone' letter can go a long way. 

*Many thanks to Stancer Gossin Rose LLP for allowing me to borrow from my earlier work for this piece.
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