Breaking a promise can be costly decision (On law)

There is no obligation to provide a reference letter to a former employee, unless you’ve promised one
By Natalie C. MacDonald
|Canadian HR Reporter|Last Updated: 06/16/2006

When it comes to providing reference letters for former employees, many employers get cold feet. The reason for concern may vary from breaching human rights legislation to being sued by the former employee for libel or slander should something negative be written or said. There are also concerns about being sued by the new employer for negligent misrepresentation for failure to mention any negative qualities or traits of the former employee.

In short, reference letters can pose a major headache for employers. While there is no legal obligation on the part of the employer to provide a letter of reference to a former employee, failure to do so may result in increased damages, as a recent case illustrates.

In

Manoni v. Powell

, a decision last month by the Ontario Court of Appeal, the court awarded additional damages to the worker because the employer had promised a reference letter, but did not deliver one.

Pierre Manoni was a young employee who had been employed in the equivalent of a middle-level management position for a short period of time — about two-and-a-half years. He worked for the Central Ontario Regional Council of the United Brotherhood of Carpenters and Joiners of America. He was a union representative and was responsible for organizing local units and servicing the needs of individual brotherhood members. When Manoni was terminated, he asked for a reference letter. The employer said, in writing, that it would forward one shortly. But it never provided the promised letter. At trial, the judge felt this failure on the part of the employer to provide the promised letter of reference warranted additional notice. In total, the trial judge awarded Manoni 14 months’ pay in lieu of notice.

While the Ontario Court of Appeal found the failure to provide a reference letter should warrant some increase in damages, it found the significant extension given by the trial judge to be “manifestly excessive.” Consequently, it decreased the amount awarded by the trial judge from 14 months to seven months in total. The Court of Appeal found that seven months was more appropriate, not only due to the fact that it found the trial judge’s award excessive, but also due to the nature and short length of Manoni’s service, as well as the fact that the employment security provision contained within the contract provided little basis for an enhanced notice period.

At first blush, the Ontario Court of Appeal has appeared to switch gears from its 1997 decision in

Ditchburn v. Landis & Gyr Powers Ltd

. In

Ditchburn

, the Court of Appeal held that although the employer had not provided an adequate letter of reference, the employee was not entitled to receive an extension of the notice period. Similarly, the British Columbia Court of Appeal adopted this reasoning in its 2001 decision in

Shinn v. TBC Teletheatre B.C., a Partnership

. In that case, the court found that there was no obligation on the part of the employer to provide a letter of reference and that failure to do so should not be taken into account in determining what constituted reasonable notice.

But looking at the Ontario Court of Appeal decisions, a distinction can be made between the two cases. In

Manoni

, the employer had actually promised to provide a reference letter but failed to do so. In

Ditchburn

, there was no such promise. Although the decision in

Manoni

appears to contradict the

Ditchburn

decision, it does not change the more fundamental principle that employers are not legally required to provide a letter of reference to a former employee. Rather, the

Manoni

decision simply confirms that if employers promise reference letters, but fail to provide them, they will be held accountable through additional damages.

For more information see:

Manoni v. Powell

, 2006 CarswellOnt 2587 (Ont. C.A.)

Ditchburn v. Landis & Gyr Powers Ltd.

, 1997 CarswellOnt 1962, 29 C.C.E.L. (2d) 199 (Ont. C.A.)

Shinn v. TBC Teletheatre B.C., a Partnership

, 2001 CarswellBC 233, 6 C.C.E.L. (3d) 244 (B.C. C.A.)

Natalie MacDonald is a partner with Grosman, Grosman and Gale, a Toronto-based law firm specializing in employment law. She can be reached at (416) 364-9599 or nmacdonald@grosman.com.

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