Employment Law: Reference Checking in Canada

By Howard Levitt and Michael Mulroy
Lang Michener, Toronto Office
Monster Employment Legal Advisors

A good hire is the surest way to eliminate from your workforce problem employees, who consume their manager’s time with performance issues, waste recruitment, hiring and training dollars and generate severance costs, when they are dismissed. A good hire is the end result of an effective hiring process which identifies high quality job candidates well suited to the available position, thus eliminating the problem employee by never inviting the employee to step through your front door.

A crucial step in achieving a good hire is checking references. Conducting a reference check is not a risky business. It is a sound business practice, which surprisingly is not always done. Every hire should have a reference check.

There is no legal impediment to asking prospective candidates to provide the names of referees and permission to contact them. Reference checking is distinct from employment verification. Verification is confirming the accuracy of information that has been provided by the applicant, either in an application form, resume or verbally, about such factual matters as service dates, job title and salary. Reference checks gather qualitative information about the applicant’s performance, skills, weaknesses and similar matters. How the applicant performed with a former employer is an indicator of how the candidate is likely to perform in the future for you.

You may elicit from referees pertinent information about the job candidate’s suitability for the position. The law of human rights requires hiring practices to be free of discrimination. An employer cannot consider factors which are protected by human rights legislation such as age, race, sex, family status and disability, among others, when making a hiring decision. Do not solicit information about any prohibited ground of discrimination identified by the applicable human rights statute in checking references. If you would not ask an applicant the question in your own job application and interview process, then do not ask it in the course of checking a reference. With that caution, you may obtain from referees information to assess the candidate’s qualifications to perform the position you are filling.

Your job candidate may present written references to support an application. Reference letters are helpful, but limited. Often, a reference letter is more useful for what is not mentioned, than what is. A written reference should be augmented by a conversation with the author. Details can be gleaned in a phone conversation, which otherwise would not appear in print. You will hopefully be speaking to a person who can provide a snapshot of the job candidate’s contribution to a prior workplace. You can assess possible fit and the likelihood of a mutually rewarding relationship.

Who signs the written reference speaks volume. Is it a former supervisor or a human resources manager? If the former supervisor, you can likely obtain good relevant feedback. If a human resources manager is the author, the letter may be a product of the settlement of a wrongful dismissal action initiated by the employee. Red flags are raised. These concerns will be confirmed if your questions are responded to with limited information, thus confirming an agreement has been made in which the former employer has agreed not to comment outside the written reference.

A skilfully executed reference check elicits an honestly held, forthcoming opinion by the referee of the former employee’s qualities and limitations.

A reference is considered a communication protected by qualified privilege and the person giving the reference cannot be sued for slander or defamation, provided the comments are the referee’s honestly held opinion. The information obtain in the reference check should only be used for the purpose of evaluating the candidate’s suitability. The information could lose any protection, if communicated to third parties for purposes unrelated to a hiring decision.

Prospective employers may face obstacles in checking references, such as policies against providing references, difficulty reaching referees and resultant delays in hiring decisions. However, the effort is well worth it, as hiring mistakes will be minimized.

Make the Right Hire, Every Time

Sometimes it’s not so easy to tell whether a potential new hire is “the one” just by looking at their resume or CV. Even if they look good on paper, you really need to check references before you pull the lever. Of course, it also helps to attract top talent in the first place, and Monster can help with a free listing on its world-class job board.