Hiring the right employee is a critical step in building a successful business, and reference checks can offer valuable insights into a candidate’s past performance, reliability, and interpersonal skills. However, in Ontario, the process of conducting or responding to reference checks is governed by a complex interplay of privacy laws, employment standards, and human rights legislation. Employers who fail to comply with these legal boundaries risk reputational damage and exposure to legal liability.
The primary privacy law applicable to most Ontario private-sector employers is the Federal Personal Information Protection and Electronic Documents Act (PIPEDA). While Ontario does not yet have a comprehensive provincial privacy statute for private-sector employers – unlike provinces such as Alberta, British Columbia, and Quebec – PIPEDA governs the collection, use, and disclosure of personal information in commercial activities.
Under PIPEDA, personal information includes any information about an identifiable individual. This encompasses employment history, job performance, disciplinary actions, and opinions expressed by others about the individual. When conducting a reference check, employers must collect, use, and disclose such information only with the individual’s knowledge and consent, unless a legal exception applies.