Job references are an invaluable way for employers to verify a prospective employee’s qualifications, experience, and character. A candidate may be look great on paper and interview well, but references can provide greater insight and perspective and may reveal certain strengths or weaknesses that an employer may otherwise miss in the recruiting process.
Although providing and soliciting job references are considered normal in the Canadian job market, there are legal obligations that employers need to be aware of when both contacting and giving a job reference.
Is there a legal right to receive/obligation to provide a reference?
It may come as a surprise to many employers and employees that, generally speaking, there is no right of an employee to receive a reference, even a basic one with dates and job, from a former employer, nor is the employer under any obligation to provide one. That being said, since most employers want to check references on new hires, they should cooperate by providing references in most cases, subject to the rules below.
Thus, employers can have a policy of not providing references, but some judges have relied on failure to provide a reference along with other employer behaviour to support a finding of “bad faith” in the dismissal process. This triggers additional compensation for any resulting mental distress.
Where an employee was terminated for just cause or suspected misconduct, it is prudent for an employer to decline to provide a reference rather than providing a negative reference or, worse, providing a falsely positive reference (see below).
In BC, the Personal Information Protection Act (“PIPA”) only permits private sector employers to collect, use and disclose employee personal information with consent, with few exceptions. Reference information, even simple facts such as what job an employee had or what they were paid, is “personal information” so governed by this rule. Similar legislation applies to private employers in Quebec and Alberta and to public sector employers in all provinces.
For references sources provided by the candidate, consent is implied, although the reference-giving employer should be notified by the candidate that they are able to provide the reference. More thorough hiring managers and recruiters often want to expand reference checks to others who worked with the candidate at a prior employer or to other past employers not listed by the candidate. In those cases, candidates should be asked to sign a written consent to broader reference enquiries. The reference-giving employer can require proof of consent, either in the form of a signed broad consent form or an email from the candidate confirming consent.
In addition to privacy considerations, employers should be aware that providing false negative or false positive statements about an employee’s employment or termination/resignation could attract liability under the common law in some situations.
If an employee has been terminated or has resigned (for constructive dismissal), employers should refrain from making negative comments regarding their departure. Negative and unsubstantiated remarks about the reasons for their departure to co-workers or customers could be considered “bad faith” conduct, which could entitle the employee to mental distress or punitive damages.
Additionally, false statements (or statements the employer cannot prove are true) that harm an employee’s reputation may also be considered defamation. However, the law of defamation offers the defence of “qualified privilege” when false untrue defamatory things are said with an honest and reasonable belief in their truth on a reference check. This defence is subject to an exception for defamatory statements made maliciously.
On the other hand, if a former employer:
- gives falsely positive information, or fails to disclose a material negative fact about the employee (e.g. he was fired for stealing from the company) when asked on a reference check;
- the new employer relies on this information in hiring the employee; and
- the new employer then suffers a loss as a result (e.g. the employee steals from the new employer),
the former employer is potentially liable to the new employer under the law of negligent/false representations. For this reason, false positive references should also be avoided.
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