The legal risks of giving a bad reference

Employees could potentially sue if they claim your account is unfair but one industry lawyer says honesty is at the crux of the issue.

HR professionals are growing increasingly uneasy about giving bad references to former workers – but can a departed employee actually launch a lawsuit if they disagree with your judgement?

“If the reference is untrue then yes, it’s potentially opening the door up for a defamation suit,” warns leading employment lawyer Trevor Thomas.

While employers are normally protected by privilege – which means they are entitled to speak freely about a former employee – Thomas says that privilege may fall if they step out of line.

“That means if they give a purposely untrue reference or if the reference is misleading, hurtful or wrong in any way which can’t be justified based on the employee’s actual performance,” he clarifies.

Thomas, of Kent Employment Law, says employers should carefully consider what evidence they have before offering a negative reference.
“If you’re going to say something negative about an employee then you want to make sure you have a good reason why and you want to make sure it’s backed up in writing,” he stresses.

“This is a big part of being an employer – documenting things and making sure that you have evidence before you take action,” he told HRM. “You always want to make sure do everything you do is well documented.”

Vancouver-based Thomas says if an employee did decide to sue based on a reference they thought was unfair, employers would be legally obligated to share hard evidence to back up their opinion.

“If an employee feels like a reference was defamatory in any sense and the employee decided to sue the employer, throughout the course of the litigation, the employer would have to produce certain evidence to demonstrate why they gave that reference,” he revealed.

While the risks might sound high for employers, Thomas says there’s a simple rule that should adequately guide HR professionals.

“Really, this goes to the employer that’s acting as a reference to be honest,” he stressed. “If you’re not honest, and if there’s any sort of malice behind why you’re not honest, then you’re potentially opening yourself up to a defamation issue.”

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