By: Stephanie McDonald and Baljinder (Bal) Singh Tiwana
Request a Reference Letter Early
During severance negotiations, you should request a positive reference letter as soon as possible. While not essential, a reference letter can assist you in obtaining a new role.
You are most likely to obtain a strong reference where your termination is unrelated to performance, such as in cases of restructuring, or mass layoffs.
Is an Employer Legally Required to Provide a Reference?
No. In Ontario, employers are not legally obligated to provide a reference letter or a verbal reference. Employment standards legislation does not require it.
However, if the employer does provide a reference, it must be truthful.
Company Policies on References
Many employers have internal policies governing references. Some companies worry that another business will rely on a reference letter to their detriment. To avoid legal liability associated with references letters, companies commonly limit their references to a neutral or factual letter of reference. Such a letter only confirms:
- Dates of employment
- Job title
- A brief description of duties
- In some cases, the letter may note that the employment relationship came to an end as a result of a restructuring, mass layoff, etc.
Even where no formal policy exists, employers may decline to provide a reference if the employee was terminated for just cause or performance concerns.
Legal Risks of Providing a Positive Reference
Employers may face legal risk if they provide a reference that is false or misleading. For example, if a former employer gives an overly positive reference that omits serious known issues, and a new employer relies on that information to make a hiring decision, the former employer could be exposed to a claim for negligent misrepresentation.This risk is one reason many employers limit references to neutral, factual information.
Are Neutral References a Problem?
A neutral reference is not negative. Many employers understand that companies adopt neutral reference policies for legal reasons and do not interpret them as a sign of poor performance.
Where possible, it is still beneficial to secure an additional oral reference from a manager or colleague who can speak more freely about your work.
What About Negative References?
Negative references are relatively rare. Employers are generally cautious because of the risk of defamation claims if they provide inaccurate or damaging information.
As part of a severance negotiation, you can request that the employer agree in writing to:
- Limit all references to a specific, approved letter;
- Ensure that any verbal references are consistent with that wording; and
- Ask for a mutual non-disparagement provision where the employee and key individuals from the employer agree not to speak negatively about the other.
Conclusion
While employers in Ontario are not required to provide a reference, requesting one during severance negotiations is a practical and valuable step. A written reference can support your job search, protect your professional reputation, and provide clarity about how your departure will be communicated.
Whenever possible, secure an agreed-upon reference letter before signing your severance agreement.
Workplace Sage Legal could help you maximize your severance and secure key protections through negotiation, including a reasonable reference, so you can move forward with confidence.
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Learn more about employment law through the articles below:
- I feel Guilty Negotiating my Severance
- Ontario Severance Packages: Why You Should Almost Never Accept the First Offer
- The “Just Cause” Termination Trap in Ontario: Get Legal Advice Before It’s Too Late
DISCLAIMER: This article/blog is provided for educational/informational purposes only. This blog does not constitute legal advice. Do not rely on any advice before speaking with a lawyer. This blog does not form a solicitor-client relationship.
