You may be a job seeker looking for a reference letter, or you may be an employer who was asked to draft a reference letter for someone. In either case, this helpful guide for reference letters in Canada will assist you in completing your reference letter.
What is a Reference Letter?
A reference letter is a document written in letter format to endorse someone for something. Generally, reference letters are used by job seekers looking to boost their application. Some job seekers may seek to voluntarily add a reference letter to support their application and some employers require letters in job applications for some positions.
Essentially, a reference letter is written in a way to highlight and recognize a person’s skills, attributes, experience, accomplishments and quality.
A reference letter is sent (or saved to be sent to multiple parties over time) by a “referee”, who is usually someone in a position of authority who has experience with the candidate and has good things to say about the candidate in an effort to recommend the candidate.
The goal of a reference letter is to help the candidate land the job he or she is or will be applying for.
Must Employers Write a Reference Letter?
No employer in Canada is under any legal obligation to provide a former or current employee with a reference letter. In addition, no Canadian court has the authority to order an employer to make a reference letter (source). Writing a reference letter is simply the right thing to do for a good employee. Likewise, it is often in the best interest of employers to write reference letters, at least for terminated employees, because the sooner an ex-employee is rehired, the less common law severance it owes (this is called the theory of mitigation).
Reference Letters and Wrongful Dismissal Law
1. As discussed above, in wrongful dismissal cases where an employee has been terminated, and there is no issue as to cause, in most circumstances the employer and the former employee have a common interest in seeing that the former employee is re-employed at the earliest opportunity. This is because, generally, under the common law, employees severance entitlements end when they mitigate by finding comparable work. For this reason, many, if not most, employers are quite willing to provide a positive reference letter, even if the reason for termination was performance-related. Thus, although an employer is not obliged to provide a letter of reference, it will run some risk if it fails to provide one.
With the above in mind, the issue of reference letters pops up in wrongful dismissal litigation from time to time. Generally, the issue relates to employee arguments seeking to extend the notice period, in part, because of the employer’s refusal to provide a reference letter. This issue was summarized well by the Ontario Superior Court in Deplanche v. Leggat Pontiac Buick Cadillac Ltd., 2008 CanLII 15897:
 … As the Plaintiff testified, the automobile dealership industry is a small one. Most people in the industry know the others. It is expected that people will have references from their previous employers. If they do not, questions will be raised in the minds of prospective employers. An employer such as Leggat must know that a failure to provide a reference will make it more difficult for a terminated employee to secure alternate employment. For this reason, a longer notice period is warranted where a reference is refused: see Humphrey v. Maritime Paper Products Ltd. (1997), 1997 CanLII 14428 (NB QB), 189 N.B.R. (2d) 245 (Q.B.).  A refusal to provide a reference is relevant in terms of another issue, namely, its effect on the issue of mitigation. It will be more difficult for the employer to argue that the employee has made insufficient efforts to mitigate his or her loss where the employer has made it more difficult for the employee to secure other employment. This is so particularly because it is the employer who bears the onus of proof on the issue of mitigation: see Michaels v. Red Deer College, supra.  I do not accept Mr. Reid’s submission that it was appropriate for the Defendant to refuse a reference because the reasons for the dismissal were based on performance. The Plaintiff was not dismissed for cause. No employee is perfect, but references are given as a matter of course. If a reference is not given, the message to prospective employers is clear – this employee should not be hired.  I now turn to the factors that are relevant to the appropriate notice period…. As I observed earlier, the Defendant refused to provide a reference, and that is a factor to be considered.
2. One other thing to keep in mind in reference to wrongful dismissal law is that employers should refuse to provide reference letters to employees terminated for cause. This is because the employee can later use the fact the employer issued a reference as part of a multi-pronged approach in arguing that the employer lacked just cause for the termination.
Employers should have a policy that does not allow all employees to write a reference letter for ex-employees. Instead, only senior managers should be able to write reference letters. This is because some ex-employees can ask friends at work for a reference without disclosing the whole truth as to why they left work. For example, in my own personal circumstances, as a junior lawyer, I once wrote a reference for a colleague who told me they had quit, but it turns out I had been lied to. I was called into a meeting with my boss months later where I found out the employee had been fired for cause and had actually commenced litigation against my employer. Had a policy been in place preventing me from agreeing to the reference, I wouldn’t have been put in such a bad place.
3. Another issue is negative reference letters. However, employers can rest easy. Employers are allowed to write negative reference letters without fear of being sued as long as they are sincere and truthful. Truth and fair comment are absolute defences to defamation.
In addition, a negative reference letter, which is truthful, and not malicious, will usually not attract an extended severance period because such letters should be reserved for employees fired for cause, who don’t get severance anyway.
4. Some plaintiffs have sued for “bad faith” damages in their wrongful dismissal lawsuit for their employer’s refusal to provide a reference, usually combined with other reasons for “bad faith”.
In at least one case, a court awarded damages for bad faith conduct, at least in small part on account of the employer’s refusal to provide a letter of reference (see Antidormi v. Blue Pumpkin Software Inc., 2004 CanLII 30885 (ON SC). What stands out, however, is that in one case in Quebec, a court awarded the employee $5,000 specifically because the employer refused to provide a reference letter (see Arseneault v. Sacred Heart School of Montreal, 2012 QCCA 715).
Who Writes a Reference Letter?
A reference letter should be written by someone familiar with the candidate’s skills, attributes, experience, accomplishments and quality.
It is best if the person writing the reference letter is in a position of authority. For example, a direct manager is a good reference. In addition, it is a better reference letter if the person writing the reference letter is someone in the field the applicant is applying for. Furthermore, it is best if the person writing the reference letter knows the applicant well enough to give a thorough reference. Lastly, the applicant should always be sure to ensure the person writing the reference letter has good things to say about the applicant. A “bad” reference letter can sink an applicant.
TIP: The candidate should offer to write the first draft of the reference letter for the reference letter writer, telling them they can edit it as they please. Most managers will appreciate this as it means they will not have to do the work of writing a reference letter from scratch. Also, sometimes it can be difficult for some people to remember or put into words nice things to say about somebody – they need a little help. However, the reference letter must be truthful, and the reference letter writer must take the time to ensure what they are writing is accurate. If an ex-employer lies about a candidate’s abilities and experience etc., it could be sued by the future employer for negligent misrepresentation (source).
How to Write A Reference Letter
A reference letter should be written in a way to persuade the reader to hire the applicant. To that end, a reference letter should be written as a means to “vouch” for the applicant by demonstrating in the letter that the applicant would be good a hire.
A reference letter should appear as professional as possible. In that regard, it is best when a reference letter comes on letterhead (with the date and writer’s contract information) and contains enough words to fill about one page.
If the candidate is not writing the first draft of the reference letter, the writer referee should ask the candidate what skills, attributes, experience, accomplishments they would like them to highlight. To that end, the candidate should always provide a “blueprint” for a good reference letter for the reference letter writer.
Template of a Reference Letter
A reference letter should begin with a courtesy like “Dear Sir” or “Dear Madam” for reference letters for specific individuals or “To Whom It May Concern” for generic reference letters that will be delivered to a number of different people.
The first paragraph should introduce the reference letter writer. For example, it could say, “I am a VP of sales at Widget Corp.” It should then discuss, briefly, the reference writer’s seniority, experience and expertise, etc.
The next paragraph should state that the referee is writing a letter of reference for the applicant. It should continue on about how the reference letter knows the applicant and for how long.
The next paragraph should introduce the applicant, describing who they are and what they do.
The next paragraph is where the reference letter needs to describe the candidate’s skills, attributes, experience, accomplishments and quality. This paragraph should be persuasive, not neutral, and it should advocate for the recipient to hire the candidate.
In the second last paragraph, the reference letter writer should state that they “recommend” the candidate for the applicable position.
In the last paragraph, the reference letter writer should write that they are available to discuss the candidate if the reader would like to do so.
The reference letter should close with some formality, like “sincerely” or “truly”, followed by the reference letter’s printed name and signature.
You can find a solid sample reference letter template here that you can use to get started if you are stuck.
Dutton Employment Law is an employment law group in Toronto, Ontario. Contact us if you have any questions concerning termination or employment law in general. We offer free consultations and we represent both employees and employers.