The pitfalls, and benefits, of providing references

By Peter Israel and Chris Foulon
|Canadian Employment Law Today

The assistance a reference letter can provide to a departing employee could reduce an employer’s exposure in a wrongful dismissal action. By assisting the terminated employee in finding a new position, the employer is assisting him in mitigating his losses, thereby minimizing any reasonable notice damages the employer may be on the hook for.

There are really two situations to consider when determining whether or not a letter of reference should be given to a departing employee:

The first instance is where the departing employee resigns or is terminated without cause and there have not been substantial concerns regarding the employee’s performance. In these circumstances, an employer’s motivation should be to help the employee find replacement employment and there really is no reason not to provide a positive letter of reference.