Letter of Reference - Departing Employee
Reviewed on 30/3/12
Who can use this document
This document can be used by all employers.
Commentary
Employees may seek a letter of reference from their employer on termination of their employment. The contents of the reference will be particular to the circumstances of each employee but will usually include details about the employee’s employment, such as length of employment and position(s) held, as well as a comment about such things as the person’s skills, experience, and ability to work as part of a team etc.
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In contrast, a Statement of Service simply sets out the period of service, position(s) held, and duties performed by the employee during their employment. Unlike a letter of reference, the statement of service provides no indication of the quality of service provided by the employee.
Before deciding whether to provide a letter of reference or a statement of service, you will need to check if there are any industrial instruments, policies, or procedures in your workplace which require either document to be provided to a departing employee. If there are, you will need to comply with the requirements outlined in those documents when providing either document.
Whether to provide
Accordingly, if there is no statutory requirement to provide either a 'letter of reference' or a 'statement of service', you will need to consider whether you wish to provide either document, or which is the most appropriate document to provide.
Some businesses have made it a workplace policy not to provide references for any employees, due to the legal risks associated with providing references. Alternatively, some organisations choose to nominate an authorised member of management to provide oral references if contacted by a future potential employer, but not a formal letter of reference. This partly enables the organisation to retain control over what is said about the employee in question, but still contains risks.
Legal risks
There are a number of legal risks associated with providing references for employees. For example, if you provide a reference which is not accurate and a future employer relies on it in employing one of your former employees, then that employer may commence legal action against you to recover any loses they suffer by relying on that reference. Similarly, if you provide a reference which defames the employee, you may find yourself defending a defamation action.
Whilst there are some legal risks, a reference can be a valuable job hunting tool for a departing employee. If you want to provide a letter of reference bear in mind the following:
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It is important that you are honest when providing references.
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Make sure the reference accurately reflects the employee’s employment with your organisation. It is a good idea to check the employee’s personnel file, as well as with the employee’s supervisors, managers, and HR to check what you are saying is correct.
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Do not exaggerate and do not generalise. For example avoid generalisations about the values and standing of the employee. Don’t say 'John is completely honest and trustworthy'. If you wish to make a comment about an employee’s values and standing, always relate it back to your personal experience with the employee whilst they were in your employ. For example, say 'during the period of John’s employment I found him to be honest and dependable in his interactions with me'. That way, if an issue arises later on that the employee has not been 'trustworthy and dependable' with his/her future employer, you have confined the statement to your experience and not made a generalisation about the values and standing of the employee.
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To minimise the legal risks which can be associated with providing references, a reference should only be used for those employees the business feels confident in recommending to future employers. For those employees the business does not wish to provide a reference for, the statement of service document can be used. If you cannot honestly provide a good reference for the departing employee, do not provide a bad one which rubbishes the employee. Instead, offer to provide the employee with a statement of service.
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If you decide your organisation will provide a written or oral reference for appropriate employees, consider nominating an authorised officer in your organisation who is authorised to provide such references. This person can collect information from the relevant employee’s supervisor, manager, and HR for the purposes of providing a reference. This way your business can keep track of what references are provided and what is said. The authorised officer should have sufficient training and experience to provide an appropriate reference. Knowledge of, and compliance with, the organisation’s workplace policies and laws (such as privacy, discrimination, OHS etc) is necessary. Nor should the officer defame the employee. If no-one else in the organisation is permitted to provide references, this policy should be clearly communicated to all workplace participants.
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Likewise, if your policy is not to provide references at all, this should be clearly communicated to all workplace participants.
The reference you will create using this service is a generic 'to whom it may concern' document, with some options included so you can more closely adapt it to your needs. You may still need to amend the reference once it is completed to suit your specific requirements and/or to comply with any relevant industrial instruments, workplace policies, or procedures.
Further information
Further information on how to use this document can be found at the 'How to use these policies' link on the Policies page of the HR Advance website.
Important note to subscribers
The commentaries and documents in HR Advance are updated as necessary, to keep them relevant. You should familiarise yourself with the relevant commentary each time you create a document.
This document has been drafted to suit a wide variety of businesses, with a number of options available to enable you to customise the document to better suit your business. Nevertheless, you may need to make other changes to the document so that it suits the specific needs of your business. If you make additional changes, we cannot guarantee that the changes and modifications you make to the document will be legally compliant or enforceable.
This commentary and any additional information provided to assist you in creating this document, does not constitute legal advice.
If you are unsure about any aspect of this document (including the changes or amendments you make to it), you should seek appropriate advice from a lawyer, skilled in these issues. You should consult with your financial advisor in relation to any relevant taxation or financial issues concerning the document you create.
After creating this document, you should read through it carefully to make sure it meets your business needs and is consistent with other industrial instruments, policies and procedures which operate in your workplace. This commentary is not designed to be provided to employees or other workplace participants. |
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