They do this because of a misconceived view of the law of references, believing that saying something negative may lead to actions for defamation.

This fear is false, largely imported from United States, not Canadian, law. Canadian law allows employers to freely transmit even the most negative information about employees, as long as that information is honestly bestowed and the employer had some reasonable basis for their opinion. In other words, they were not entirely negligent.

Given the actual law, it makes little sense to hold back on your references. After all, if you are not willing to provide references about your former employees, you cannot realistically expect to obtain relevant information about your potential recruits in response. As well, if an employee believes that however well or poorly they perform, they will receive the same reference anyway (or no reference at all), it takes away one of an employer’s few motivational tools.

A U.S. reference checking company, Allison & Taylor Inc., found that almost 50 per cent of all references revealed some level of negativity. Some examples they provided included the following.

Regarding strengths and weaknesses, one reference said, “I cannot think of any strengths, only weaknesses” and another said, “I’d rather not comment — you can take that however you want.”

In answer to a question about the reasons a former employee left, one reference said: “You should call her other past employers. I made the mistake of not doing that.”

In response to an inquiry about an applicant’s “financial skills,” one reference didn’t hold back at all. “That’s why our company had a major layoff — we left her in charge of finances,” the person said.

And finally, respecting a question involving “technical skills,” one reference responded: “Is zero in your rating scale?”

Humorous as they may be, could an employer get away with these sorts of responses to a reference check? Shocking as this will be to most employers, they can as long as they honestly believe what they are saying, have no personal malice toward the employee and are not entirely negligent in providing the information at their disposal.

What employers do have to concern themselves with in providing references are:

1. Retaliation for filing an occupational health and safety complaint or attempting, for example, to organize a union under the Labour Relations Act;

2. Defamation, if the person providing the reference did not have an honest belief in what they were saying;

3. Negligence, if the reference given confounds all reality and there was no basis for it at all; and

4. Discrimination, if a case can reasonably be made out that the employee received the negative reference because of some prohibited grounds under Human Rights legislation i.e., because of their age, race, gender, etc.

But these are all rare and difficult to prove.

What about employees who simply cannot find a job as a result of a negative reference?

In those circumstances, I have found that a well-articulated letter through counsel making a threat of legal action based on any of the items listed above will generally lead to a negotiation as to future references.

What is the impact on references if an employee sues for wrongful or constructive dismissal?

Since finding another job reduces the damages awarded from any wrongful dismissal claim, ironically, suing your employer for wrongful dismissal is one of the best methods of ensuring a positive reference.

The fact of the lawsuit also makes it easier to argue that a negative reference is defamatory as tainted by malice. But significantly, in the settlement of the case, if a reference is still an issue, a smart employee will put in a clause dictating what the future references will be.

What if an employer provides a reference, which is positive but inaccurate? That is the bigger problem. A future employer, who was misled by that reference, and can prove damages, can sue that employer for negligent misrepresentation.