Decision on employee reference eases the fears ‘to a certain extent’

What should an employer say when asked about a former employee who wasn’t up to scratch?

The issue arose in Papp v. Stokes earlier this year, a case in which Adam Papp sued his former employer for wrongful dismissal, defamation and mental suffering. Among other things, when asked by a potential employer whether he’d rehire Papp, the person giving the reference responded: “No way.” The former employer also raised concerns about Papp’s ability to get along with his co-workers. In light of the reference, the company that had been considering Papp for a job rejected his candidacy.

Read: Court affirms employer right to provide truthful, candid reference for former employee

The Ontario Superior Court rejected the defamation claim, finding that while his former employer had given an unfavourable reference, there was substantial evidence it was a truthful description.

“The statement has to be false, because truth is a very strong, if not complete, defence to defamation, even if it does injure the employee’s reputation,” says Mike MacLellan, an associate at Crawford Chondon & Partners LLP in Brampton, Ont.

The decision was a welcome one for employers, says Trevor Thomas, a lawyer at Kent Employment Law in Vancouver. “I think a lot of employers were quite pleased when [Papp] came out. They felt they don’t have to be scared about what they say anymore, to a certain extent.”

While the case could ease the worries of employers that would prefer to speak candidly, there are still scenarios where they could run into trouble when giving a reference.

The risks of going too far

Within the scope of giving a reference, employers have the protection of qualified privilege, says Dan Michaluk, a partner at Hicks Morley Hamilton Stewart Storie LLP in Toronto. “The law will protect someone conveying facts so long as the person doesn’t act based on malice and doesn’t go too far and stays within the boundaries of the occasion.”

It’s the vague notion of going too far that worries employers, as there are circumstances where the defence of qualified privilege could fail, says Michaluk, citing the risks of disclosing things unrelated to the job.

Read: Court decisions reinforce need for benefits communications policy

If something about a former employee is a matter of opinion, employers should exercise caution, he notes. “The defences for opinions are a little different, and there may be complications in defending an opinion that [isn’t] associated with defending the conveyance of facts.”

Employers can convey negative information if it’s objectively true, says Nita Chhinzer, associate professor of leadership and organizational management at the University of Guelph. “If I can honestly say that an employee was consistently late and that was one of the challenges that we had with them and after repeated discussions on this, their performance did not improve . . . that is me factually saying my experiences with this person,” she says.

Privacy liability, on the other hand, addresses the same issue of going too far but from a different angle. In that situation, employers can refer to the implied consent arising from a former employee asking them to give a reference, says Michaluk. However, there’s an implication that the information disclosed will be relevant to employment matters, he adds.

Read: ‘Welcome news’ in B.C. court statement on non-culpable absenteeism

“You fully address your privacy risks by getting consent and sticking within the consent,” says Michaluk. As such, if the person giving a reference discloses unfavourable but relevant facts, the former employee is out of luck in terms of legal recourse, he says.

Michaluk says he could foresee a potential lawsuit over privacy issues if the person giving the reference goes off topic and discusses details that have nothing to do with job performance.

But taking legal action may be more trouble than it’s worth, according to Michaluk. Even if the employee’s claim is successful, the damages awarded are likely to be minimal, he suggests. “Maybe it would be a few hundred dollars, maybe $1,000, depending on the facts.”

Other pitfalls in the hiring process

Besides calling references, hiring managers have plenty of issues to consider when looking at a can-
didate. Are they actually telling the truth? As a 2015 survey of U.S. hiring and human resource managers by CareerBuilder found, lying is common. In fact, 56% of employers have caught a lie on a resume. The most common lies include:

Martha Porado is an associate editor at Benefits Canada.

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