Jun 6, 2017

Employee Reference Letters: What You Need to Know

Papp v Stokes et al, 2017 ONSC 2357 (CanLII)

Beyond providing fair severance, one of the best things an employer can do to help a dismissed employee is to offer assistance in finding a new job. This assistance could include outplacement support, speaking with industry contacts and/or offering to provide references to prospective employers, if required.

Generally speaking, most employees would assume that if their former employer offers to provide a reference to prospective employers, that the reference would be positive and likely help them attain re-employment. In Papp v. Stokes et. al, however, things did not unfold in this manner.

Mr. Papp worked for Stokes Economic Consulting Inc. as a staff economist from March 2011 until his without cause dismissal in December 2013. The day after his dismissal from employment, Mr. Papp emailed Stokes' President, Dr. Ernest Stokes, and asked if he could use Dr. Stokes as a reference when applying for new jobs. Dr. Stokes agreed.

Mr. Papp subsequently applied for a position as a statistician with the Yukon Government, providing Dr. Stokes as a reference in the process. Mr. Papp completed a written test for the position and was granted a telephone interview. At the conclusion of the telephone interview, Mr. Papp was informed that he was the first ranked candidate. As such, Ms. Amanda Ho, a representative of the Yukon Government, made arrangements to check Mr. Papp's references. In so doing, Ms. Ho spoke with Dr. Stokes by telephone.

Ms. Ho asked Dr. Stokes a number of pre-set questions. In answering these questions, Dr. Stokes stated that:

  • The Company had not been that pleased with Mr. Papp's work;
  • Mr. Papp does not get along well in a team setting;
  • Mr. Papp does not get along 'greatly' with co-workers; and
  • There was "no way" the Company would re-hire Mr. Papp.

As a result of Dr. Stokes' comments, the Yukon Government decided not to offer a job to Mr. Papp. When Mr. Papp became aware of this fact, he sued both his former employer and Dr. Stokes for defamation, amongst other things. At trial, Justice Miller set out the requirements to prove defamation:

  1. the impugned words must be defamatory, in the sense that they would tend to lower Mr. Papp's reputation in the eyes of a reasonable person;
  2. the words in fact referred to Mr. Papp; and
  3. the words were published, meaning that they were communicated to at least one person other than Mr. Papp.

Justice Miller found that the three elements of defamation were satisfied by the reference that Dr. Stokes provided to Ms. Ho. Dr. Stokes, however, raised two defences - both of which were successful, thus defeating Mr. Papp's defamation claim:

Justification

The defence of justification required Dr. Stokes to show that his comments were substantially true. Dr. Stokes was successful in this regard and the court stated:

I am satisfied on a balance of probabilities that what Ernest Stokes said to Amanda Ho was substantially true. While it is clear that Adam Papp’s co-workers made an effort to get along with him while they worked together and made no formal complaint about his behaviour, they did find it difficult to work with him given that they perceived his behaviour towards them as conveying a feeling of superiority on his part. I find that while Adam Papp’s technical ability to do the work assigned him was good, he did not work well in the team setting at Stokes Economic Consulting Inc. I find that this was not confined to his personality differences with Aaron Stokes but extended to Mr. Papp’s co-workers as well. (para 74)

Qualified Privilege

Dr. Stokes also raised the defence of qualified privilege. Qualified privilege will successfully defeat a claim of defamation where it may be shown that the impugned comments reflect an honestly-held belief and the statements were not motivated by malice or a reckless disregard for the truth.

The court found that Dr. Stokes was neither reckless nor malicious in making the comments that he did to Ms. Ho. In particular, the court noted that Dr. Stokes took steps to verify his beliefs by speaking with other staff at the Company. In addition, Dr. Stokes did what he could, within the confines of the pre-set interview questions, to bring Mr. Papp's positive attributes to Ms. Ho's attention. Accordingly, the court dismissed Mr. Papp's claim for defamation, along with his associated claims for punitive damages, aggravated damages and intentional infliction of mental suffering. Despite this, the court did find that Mr. Papp had been wrongfully dismissed and awarded $17,192.57 in this regard.

Lessons for Ontario Employees and Employers

Ontario employees should consider carefully from whom they request an employment reference. It is important to have a clear understanding upfront whether the party providing the reference is able to give a positive reference. If not, it is best to avoid seeking a reference from this person, or to seek instead a written reference that may be reviewed prior to being submitted to prospective employers.

For Ontario employers, this decision confirms that employers are not required to 'sugar-coat' references for former employees. That said, employers should think carefully about implementing a policy with regard to employee references to reduce the risk of potential liability. For example, employers may decline to issues references, or limit their comments only to basic information such as confirming the person's dates of service and position.

For those employers that do decide to provide fulsome references, a number of considerations should be made: ensure that the reference is truthful and accurate; take active steps to objectively verify the information provided in the reference; and ensure that the person providing the reference does not have any 'axe to grind' (i.e. the comments there are neither malicious nor reckless to the truth).

Finally, and from a practical standpoint, despite the fact that Stokes was able to overcome the defamation claim, the Company was still embroiled in protracted and expensive litigation. As such, employers should look to take proactive steps to limit the risk of a similar situation arising within their organization.