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Deference to reference

Refusing to provide reference letters doesn’t really make sense

By Jeffrey R. Smith

When screening job applicants, most employers probably check out some of the references the applicants provide and consider any reference letters in making the final decision on whether to hire someone or not. It’s obvious references letters can be an important tool in hiring someone.

So why would an employer refuse to provide them to departing employees?

Some employers follow a practice of not providing reference letters at all or, if they do, then just basic information about the employee — the “name, rank and serial number” reference. But is this a good idea? What are they afraid of? Some might be worried about providing incorrect information and then being liable for damages suffered by a subsequent employer who bases a hiring decision on that information.

Others might be worried, if they don’t have anything good to say, of being accused of misrepresentation or libel by the employee. However, it really boils down to this: If the employer is honest and truthful in the reference, it shouldn’t have anything to worry about.

Can an employer get into trouble because of a reference letter? Well, probably not, unless it purposely provided inaccurate information in a malicious manner that could be seen as bad faith. As for liability for damages from another employer who hired someone because of a reference letter, as employment lawyer Stuart Rudner put it in the July 29, 2009, issue of Canadian Employment Law Today, “there does not appear to be a single instance in which a successful claim (for misrepresentation in a reference letter) has been made in Canada.”

In fact, an employer might be more likely to face trouble if it refuses to provide reference letters. A failure to provide one could potentially be seen as bad faith in a wrongful dismissal case and increase the damages owing to a dismissed employee, if the employee is able to prove that refusal hurt her reputation or her chances to find new employment.

Also, a reference letter could decrease the financial burden on the employer if it helps a dismissed employee find work sooner, which could decrease the notice period the employer is responsible for — and further show the employer is acting in good faith by helping the dismissed employee as much as possible.

Let’s face it — how many employers out there who don’t provide reference letters don’t check out ones provided to them by job applicants? Not many, I’m guessing, which would make them a little hypocritical. So does it make sense for an employer to have a policy of not providing reference letters for dismissed employees?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at employment law from a business perspective. He can be reached at jeffrey.r.smith@thomsonreuters.com. For more information, visit www.employmentlawtoday.com.

Jeffrey R. Smith

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective.
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