Legal Matters: Does an employer need to provide a reference letter?
An employer is generally not required to provide a reference letter to a dismissed employee, but it can benefit both parties for legal and practical reasons.
This isn’t the case if the employee’s contract requires the employer to do so, or if the employer has a well-known practice of doing so (which can create a contractual expectation that every employee will receive a letter). But this is not overly common.
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That said, there are good practical reasons why an employer should provide some kind of reference letter to an employee they’ve just dismissed.
Many employees are entitled to pay in lieu of notice of their dismissal beyond what the Employment Standards Act requires. This entitlement usually works out to somewhere around three to six months’ notice or pay in lieu per year of service.
However, the dismissed employee is obligated to mitigate their damages, meaning they need to act reasonably to find another comparable job. A reference letter may help an employee find that new job — and the sooner they find one, the less exposure their former employer has to paying wrongful dismissal damages.
For example, if an employee who says they’re owed 10 months of notice and sues their employer for that amount but then finds a new job paying as much or more than the old job after five months, the former employer is potentially on the hook for up to five months’ pay instead of the full 10 months.
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Recent court decisions also indicate that an employer who is sued for wrongful dismissal will have a much more difficult time arguing the employee didn’t act reasonably to find new work if the employer did nothing to help.
Employers need not provide every employee with a glowing reference regardless of the quality of the employee’s work, but a letter with a few kind and positive words — so long as they’re truthful — can greatly benefit both parties.
The advice offered in this advertorial column is for informational purposes only and is not intended to replace or substitute legal or other professional advice.
