In British Columbia, there is no obligation for an employer to provide a letter of reference, let alone a favourable one. However, a lack of reference letter may contribute to an employee’s difficulty in finding new employment. A recent decision by the BC Supreme Court has further elaborated on the role of letters provided on dismissal.
In the absence of a reference letter, an employer may provide a letter that confirms the employee’s record of service. According to the Court, these verification letters can also have a negative effect on an employee’s ability to find new employment.
If you are an employer, this may be of concern in the event that the employee files a claim for wrongful dismissal.
If an employee has been dismissed, they need to take the appropriate and reasonable steps to try to obtain alternative equivalent employment. This is referred to as a duty to mitigate losses.
If an employer is faced with a claim for wrongful dismissal, the employer may allege that the employee has not taken such appropriate and reasonable steps. Therefore, the amount of damages awarded should be lowered. This is referred to as a failure to mitigate losses. It is up to the employer to show how the employee has failed to meet this duty.
While you are not obligated to provide a letter of reference on dismissal, the absence of one may be held against you in the event of legal action.
In the event that an employee is dismissed, an employer should take into consideration the length and position of employment, as well as the circumstances of dismissal. These circumstances may determine the appropriate type of letter, as well as the information to provide within.