I just need to find out if an employer is allowed to give a bad reference? My sister had an unfortunate incident with stock. She was allowed to resign and was not given a hearing and the employer did not press charges or go to the police. Her employer is now telling people that she is untrustworthy. I do understand why but I just need to know if she is allowed to tell people this? My sister has had a ton of interveiws and even gone for second interveiws but after the reference check is done, she gets told things like "Oh we want someone with a drivers license" or "We've decided to promote internally". Any advice will be greatly appreciated.
References aren't governed by any particular law - they might be subject to the laws surrounding defamation, but do not really fall within the realm of labour law. The purpose of the reference is to allow a prospective employer to get a feel for how the prospective employee would fit in their business environment.