Providing Reference Letters

Recently, I have written and spoken about the issue of providing reference letters to dismissed employees. The thrust of my comments has been that in the vast majority of cases, there is absolutely no reason for an employer not to provide a positive letter of reference for a dismissed employee.  As discussed below, this conclusion is based upon two general points:
There is little or no risk in providing an honest, good faith reference;
Organizations can benefit financially if a dismissed employee finds new employment quickly.

An assumption that I made is that, all else being equal, it will be easier for an individual to obtain a new job if they can include reference letters (not just confirmations of employment) with their application. What has surprised me is the amount of feedback that this assumption has generated. Many individuals who are part of the hiring process have disagreed with the assumption either partially or entirely.

I stand by the comments below (edited from a previously published article), as I believe that providing references has minimal risk while providing potential gain, but I think it would be very helpful to hear from those with a different perspective.

• Does your organization have a policy with respect to the provision of references? Why, or why not?
• If you are involved in hiring or screening, does the existence or lack of a reference letter have any impact?

Are There Risks in Providing Subjective References?

I reached my conclusion despite the fact that many organizations, including many of my own clients, have official or unofficial policies against providing reference letters.  In many cases, the policy is either not to provide anything at all, or to provide a confirmation of employment, which I typically refer to as a “name, rank and serial number” letter;  it does include any subjective comments whatsoever regarding the employee in question.

Many organizations defend their policy of not providing reference letters by referring to concerns of potential liability.  Typically, the concern is based upon a fear that a prospective employer might rely upon the content of the reference letter, hire the individual in question and then subsequently sue on the basis that the content was inaccurate and they suffered damages as a result of hiring the individual.  While I will admit that it is conceivable that a new employer could allege that a misrepresentation was made in a reference letter which they relied upon to their detriment, I am not aware of a single instance in which a successful claim has been made on that basis in Canada.

The other basis upon which opposition to writing letters of reference has been defended is the fear of a lawsuit brought by the subject of the reference letter, in the event that they are unhappy with the content thereof.  It is extremely unlikely that such a claim would succeed unless the author made comments that were not only inaccurate but also malicious.  Otherwise, reference letters have generally been perceived to be a privileged communication that will not be subject to liability so long as they are written in good faith and with the belief that the contents are accurate.

So why do organizations continue to refuse to provide positive references? Part 2 of my blog will discuss why organizations should reconsider their policy of not providing reference letters.

Stuart Rudner, Miller Thomson LLP