When an employee is terminated from a job, employers often debate about
whether or not to provide the employee with a positive letter of
reference. The reasons for refusing to provide reference letters usually
involve some combination of fear and revenge towards the terminated
employee. This article attempts to educate and encourage employers to do
the right thing and provide each terminated employee with a letter of
reference. Listed below are my top four reasons why employers
should provide a positive letter of reference to their terminated
employees. I have also included a list of items that employers may
consider putting into a positive letter of reference, even if the
employee was terminated for just cause. The lists are not exhaustive.
Each employee or employer should seek a formal legal opinion from Gary
Bennett which takes into account their specific circumstances prior to
implementing a strategy based on the information below.
My top four reasons why employers should provide positive reference
letters 1. Positive reference letters can limit your financial
exposure for wrongful dismissal. One of the best ways to limit the
damages that may be owing to a terminated employee is to help that
employee to obtain a new job as soon as possible. Even if the employee
sues the employer for wrongful dismissal, the damages will be limited to
the set off between the reasonable notice pay owing and the income from
the employee's new job. If reference letters help former employees to
become re-employed, then employers should provide them willingly and as
quickly as possible. 2. Positive reference letters are a good
investment. Very few things in life are free. A positive letter of
reference does not cost an employer any money, but it can save a company
tens of thousands of dollars if it helps an employee to become re-
employed months sooner. A business strategy that is free but saves tens
of thousands of dollars makes good economic sense. 3. Positive
reference letters can help to limit bad faith damages in a law suit.
The Supreme Court of Canada has suggested that there are a number of
factors that can increase the damages owing to an employee who was fired
by the employer. One such factor is when an employer refuses to provide
an employee with a positive letter of reference. This factor on its own
can cost employers tens of thousands of dollars in bad faith damages or
other types of damages. If this factor is coupled with other bad faith
factors, the damages can be extremely high and punitive in nature to
employers. 4. Providing a positive reference letter may decrease
hostility at termination time. Firing an employee is a hostile
situation. Feelings always get hurt. Many employees suffer mental
distress and other psychological disorders after being fired. Providing a
positive letter of reference to the employee can help to decrease the
tension and bad feelings of the employee towards the employer. While it
may not create a lasting friendship with the employee, it is generally
seen as a show of good faith and best intentions towards the employee.
What items may be included in a positive letter of reference? Most
employers immediately feel like they will be lying about a terminated
employee if they provide a positive letter of reference on behalf of the
employee. This does not have to be the case. There are a number of
positive things that can be said about an employee without lying about
the employee's shortcomings or reasons for terminating the employee's
employment. I have listed a few examples of things that can be said in a
positive letter of reference even after a hostile termination of
employment. My list is not exhaustive. Not all of the items in my list
may be applicable, but a combination of some of them can be used to
create a positive letter of reference. · Last position held by the
employee · Length of service of the employee · Chronology of the
employee's positions held at the company · The fact that the employee
generally arrived for work on time · Some of the good things the
employee was able to do · List the duties of the employee's position
that the employee performed well · Provide positive comments from
previous performance evaluations Be honest If the employee was
a thief, do not write a positive reference letter that refers to the
employee as honest and trustworthy with other people's property. It is
important to accurately convey attributes of the employee in a positive
manner without telling a lie. Do not embellish the truth
Employers sometimes get into trouble if they give the impression that the
terminated employee has abilities or characteristics which simply do not
exist in the employee. When a future employer reads a positive letter of
reference, that employer is trying to assess the employee's capabilities
and work product with the former employer. If a positive letter of
reference embellishes the truth, it will be misleading. A future
employer may hire your former employee based on skills and abilities that
you have endorsed when they do not exist. Future employers rely on your
letter of reference as the best indicator of the employee's capabilities.
Be practical There is something positive to say about every single
employee. After all, if you made the intelligent decision to hire the
employee you must have seen something positive at that time. Secondly,
refusing to provide a positive letter of reference to a long term
employee is not practical or logical. There must be some good in the
employee if he or she remained employed at your company for a long time.
Employers who argue that they can not provide a positive letter of
reference for long term employees are generally perceived to be
insincere, untruthful and playing hardball. Be willing to confirm
everything in the reference letter in a telephone reference Some
employers will call a former employer to verify that the letter of
reference is accurate. Employers should be willing to verbally confirm
everything that is written in the positive reference letter. It often
helps to have one central person who confirms the contents of the
reference letter to ensure consistency and accuracy. What could go
wrong if my company provides a negative reference? Unfortunately, it
has been the case where a manager or other employee of a company has
provided a negative reference regarding a former employee. In these
situations, the former employee often has no choice but to take legal
action against your company and the manager who provided the negative
reference. Legal action may result in very costly damages being awarded
against your company and the individual employee who provided the
negative reference. Damages against your company may arise in any
number of ways. The company may have to pay for the loss of income
suffered by the employee if the negative reference caused the former
employee to lose a new job which was conditional on a positive reference
check. If the reference was taken by a professional screening company,
the employee may not be able to secure another job in the industry until
the screening company's records are purged. This often requires a court
order. Therefore your company may be required to compensate the employee
for lost wages for many months or years while he or she remains
unemployable plus the costs of obtaining an order from the court to purge
the screening company's records. Over and above all of these costs, a
court may order your company to pay punitive damages to the former
employee and legal costs for the law suit. Finally, your company will
have to pay for its own lawyer's fees for defending the company in the
legal action. Most times, these cases are settled out of court to
avoid the embarrassment of having a Judgment registered against the
company for such a terrible act against a former employee. However, the
damages can reach the hundreds of thousands of dollars based on the
factors discussed above. If your company is in the unfortunate position
of having to defend against allegations of providing a negative
reference, you should obtain legal advice immediately from Gary Bennett
and protect your interests. For more information on how to protect
your interests, contact Gary Bennett at gary@bennettlaw.ca to book a
consultation. For more information on legal services provided by Gary
Bennett visit www.bennettlaw.ca .
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