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Termination of employment can be a difficult experience. One of the major stressors for an employee is when and if they will find new employment. In connection with this, most employees are keen to secure a reference letter from their employer that will help them in finding new employment.

Some employers are hesitant to provide such a letter and employees are left wondering what their legal entitlements are in this scenario.

Below we address employee entitlements to reference letters, best practices for employers and strategies for securing reference letters.

No Legal Requirement to Provide a Reference Letter

In Ontario employers are not legally obliged to provide a reference letter to employees.

Employers should, however, consider carefully the potential liability created by refusing to provide former employees with reference letters.

Below we explore some reasons why employers are concerned about providing reference letters and how employees can overcome this to secure a letter.

Why are Employers Reluctant to Provide Reference Letters?

It is helpful to review the source of employer hesitation with respect to providing reference letters following a termination of employment.

Employers often list the following concerns:

  • Concerns about misstating an employee’s abilities and potentially opening themselves up to litigation relating to negligent misrepresentation;
  • If an issued reference letter is shown to impair an ex-employee’s job prospects, the ex-employee could claim damages against the employer;
  • Ex-employees may pursue litigation relating to defamation and privacy violations as a result of a negative reference letter.

As a result of these (and other) concerns, many employers have adopted the practice of writing neutral reference letters, which merely confirm that the ex-employee worked for the employer in a particular role, for a particular time period, or not issuing letters at all as a matter of policy.

Why Should Employers Consider Issuing Reference Letters?

There is no strict legal obligation for an employer to provide a reference letter of any kind. If, however, a court finds that an employer’s refusal to provide a reference amounted to “bad faith” conduct that caused the employee harm, this may entitle the employee to aggravated or punitive damages.

Further, courts have awarded employees increased compensation if the employer’s refusal to issue a reference letter negatively affected the employee’s efforts to find a new job.

Employees have an obligation to mitigate their damages following a termination of employment. Specifically, any income earned by the employee during the notice period is deductible from any potential wrongful dismissal damages owed by the former employer. Therefore, an employer also has an interest in their former employee being able to find new employment through the issuance of a reference letter.

What Can an Employee Do?

If your employment has been terminated and your employer has refused to issue a reference letter, you may wish to seek legal counsel to assist you with corresponding with your employer to highlight the legal liabilities associated with such a refusal. The goal here is to encourage the employer, relying on legal principles, to issue a reference letter or, at minimum, a confirmation of employment letter.

Employer Best Practices

Considering the above, employers should strongly consider providing reference letters to employees. While there are risks associated with issuing such letters, generally the risks associated with failing to do are greater than not doing so.

Employers should therefore consider the following:

  • Establishing a policy regarding the type of letters to be provided to former employees. This policy should be communicated to employees and applied in a consistent manner.
  • Ensuring that any letters written are true, accurate, and written in good faith. Employers can consider specifically quoting the employee’s performance reviews where appropriate/necessary.
  • Assigning reference letter writing to one person in the organization and having this person be responsible for follow-up calls from prospective employers. Information conveyed in follow-up calls should be consistent with the written letters.

If you believe you have been wrongfully denied a reference letter, please contact Toronto employment and wrongful dismissal lawyers, Sultan Lawyers, at 416-214-5111 or via email at khayward@sultanlawyers.com.


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