As an employer do you have to give a reference letter when you terminate an employee without cause?

It’s an area you want to be careful with. Reference too good, you run the risk of problems with the next employer. Reference refused or luke warm, you run the risk of a damages claim with the employee.

One thing for sure, neither side should use a reference letter as a bargaining chip in settlement negotiations. Judges don’t like it and employers run the risk of having to deal with bad faith claims.

See Ashby v. EPI Environmental Products Inc., 2005 BCSC 1190, for a useful summary of the BC position on reference letters.