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Results of our most recent Reference Checking Survey

Of the respondents, 55% reported that their companies had policies in place regarding providing references on former employees. While 80% of the respondents believed the reference check is an important aspect of the hiring process, many admitted to not asking all the questions necessary to obtain a complete picture of the candidate. Please click here to view the survey results.

Analysis and interpretation of our most recent Reference Checking Survey

The reference check is a vital tool in assessing the potential success of a new hire. If improperly completed, it can result in an individual being hired into a position for which they are not qualified or where there is a mismatch of skills and personality. Please click here to view the analysis and interpretation of the survey responses.

The legalities of providing a reference check on a former employee

One of the more intriguing problems confronting a manager today, is trying to understand the law with respect to providing employment references; particularly discussing negative issues about a former employee with a potential employer. They balance trying to be fair with the employer, by giving meaningful information, but at the same time having a concern over their own legal liability. Provided in this article are two of the more notable aspects of this apparent worrisome topic. Please click here to view.

The legalities of providing a reference check on a former employee

One of the more intriguing problems confronting a manager today, is trying to understand the law with respect to providing employment references; particularly discussing negative issues about a former employee with a potential employer. They balance trying to be fair with their employer by giving meaningful information, but at the same time having a concern over legal liability. Provided below are two of the more notable aspects of this apparent worrisome topic.

Taken from a Canadian Dismissal and Employment Law Digest editorial, although some years old, it discussed companies making it their practice to provide only name, position and length of service when speaking to callers about former employees. It went on to say, however, that:

“This practice is unfair to former employees and distressing to existing ones, who might appreciate the advantage of a [potential] favourable reference. Furthermore, such non-descriptive references result in prospective employers using their own informal networks to ascertain relevant information about the employee concerned. Consequently, instead of controlled information generated about a former employee, the inquirer will perhaps obtain hearsay, innuendo and inaccuracies.

Ostensibly, such a policy is designed to protect employers against lawsuits or defamation by terminated employees; however, in practice, there is no realistic possibility of such a lawsuit. A former employer cannot generally be sued for libel or slander by a terminated employee as a result of a reference, even if the information provided in that reference is damaging and inaccurate. This is because the courts have endowed employment references with the protection of the law of qualified privilege. Even if the information imparted about the former employee is inaccurate and damages that employee’s career prospects, the reference cannot be sued for it, if the comments are honestly made. The only qualification to this qualified privilege is if the employee can prove that the referee did not himself believe the facts asserted. Unless that referee had made inconsistent statements in the past, it would be virtually impossible for an employee about whom a reference is sought, to prove that the reference was provided maliciously, without good faith.

Although there are no legal consequences flowing from providing prospective employers with unfavorable information, there could be legal liability from omitting to provide such information. Specifically, if a former employer misrepresents certain significant aspects of a former employee’s performance, and the prospective employer hires the employee as a result, they could sue the person providing the reference and his company for damages for negligent misrepresentation.”

The Employment Bulletin adds that courts have recently awarded additional damages, often amounting to many thousands of dollars, against former employers in dismissal cases, where the failure to give a helpful reference was perceived to have impeded the job search efforts of the dismissed employee. Employers are being, it seems, judicially encouraged to provide written and oral references on behalf of former employees in order to increase their opportunities to secure alternative employment. The courts are using monetary sanctions to drive the message home. The Bulletin went on say that

“Employers should consider the following steps in respect of references, on behalf of former employees:

l. Upon request, the employer should provide a substantive reference, on behalf of a former employee, particularly, in circumstances where the individual’s performance and character were never in question.

2. The employer must act objectively and in good faith, in preparation of the reference, assuming that it will be relied upon by third parties in determining the departing employee’s future.

3. The employer must exercise reasonable skill and diligence in the preparation of the reference, understanding that in undertaking the preparation of such a reference, a duty of care is owed towards the departing employee.

Many employers have held fast to outdated policies on references for many years. It appears that the courts are attempting to use the tool of judicial persuasion to force those employers to modify their attitudes and approach towards references to fit the economic realities of the 1990s.”

In light of the above, two clear issues have surfaced. The first is that a former employer can safely provide information about a former employee without the risk of reprisal, even if it is unfavourable and even if it is not necessarily accurate, as long as that person believed what they said to be true. The second is that the company is potentially more at risk in not providing information about a former employee, because they can be sued for negligent misrepresentation.

One answer is for the former employer to be as honest and forthcoming as possible with the potential employer, in providing as much accurate information as can be made available. The result will not only ensure that the future employer is assessing an ideal candidate, but that a mismatch will not occur, where a person is placed in a position that is beyond their capabilities.