Bad references can be bad news for employers

Inaccurate and negligent references or refusing to give one at all can lead to bad-faith damages
By Brian Smeenk
|Canadian Employment Law Today

There used to be no obligation on the part of employers to give reference letters. If they did, there was little chance they could be successfully sued for any negative statements. Reference letters were governed simply by defamation and human rights laws. However, things have changed and employers need to be careful when considering giving references.

Previously, an action against a former employer because of a bad reference could only succeed if the employee could prove two things: False statements were made about the employee and the statements were motivated by malice.

This was the law for more than 200 years because the courts held it to be in the public interest that, in giving references, employers should be encouraged to express their honest opinions about a former employee. This protection, called qualified privilege, was only lost if the reference-giver was motivated to say something untrue by actual malice toward the employee. Otherwise, the defence of qualified privilege would be found to be “a complete answer to the claim” made by the disgruntled former employee as in