When an employee leaves your business, you’re usually juggling a lot at once - handovers, final pay, returning equipment, updating rosters, and keeping the team running smoothly.
Then the departing employee asks: “Can you provide a reference letter?”
A well-written employee reference letter can help your former team member move forward, but it also needs to protect your business. If you’re not careful, a reference can create confusion, privacy issues, or even disputes about what you did (and didn’t) say.
Below, we’ll walk through what to include in a reference letter in New Zealand, what to avoid, and a practical template you can adapt for your business.
What Is A Reference Letter For An Employee Leaving (And When Should You Give One)?
A reference letter for an employee who is leaving is a written statement from an employer confirming details about an employee’s role and (often) providing a view on their performance, skills, and conduct.
In NZ, there’s generally no blanket legal requirement to provide a reference letter in every situation. But in practice, it’s common - especially where the employee has left on good terms or where you want to keep things professional and consistent.
Common Situations Where A Reference Letter Makes Sense
- Resignations (where the employee has worked out notice and completed a proper handover).
- End of a fixed-term agreement (where employment ended as planned).
- Redundancy (where the role ended due to business reasons and you want to support the employee’s next step).
- Internal policy consistency (if your business provides reference letters as a standard practice).
Situations Where You Might Pause Before Issuing One
- If there’s an ongoing dispute or a relationship breakdown.
- If the employee was dismissed for serious misconduct (you’ll want to be very careful about what you say and how you say it).
- If a reference could create confusion about the reason for departure.
If you’re uncertain, it’s worth getting advice from an Employment lawyer, especially where you’re concerned about risk or future claims.
What Should A Reference Letter Include In NZ?
There isn’t one “official” format in New Zealand, but there are a few key inclusions that will make your reference letter clear, credible, and low-risk.
As a general rule, aim for a reference that is:
- Truthful (never exaggerate, and don’t make promises you can’t back up)
- Relevant (focus on the job and work performance, not personal life)
- Consistent (aligned with your records and what you’d say if contacted)
- Appropriate (avoid discriminatory language or unnecessary detail)
1) Basic Employment Details
At a minimum, it’s usually safe and helpful to confirm factual details, such as:
- Employee’s full name
- Job title
- Employment dates (start date and end date)
- Employment type (full-time/part-time)
- Key duties or the general scope of the role
This kind of information should match your internal records and what’s set out in their Employment Contract.
If you genuinely want to provide a positive reference, you can include a short section about strengths relevant to the role, like:
- Reliability and attendance
- Customer service skills
- Ability to work independently
- Communication and teamwork
- Problem-solving and initiative
- Leadership (if they supervised others)
Keep it grounded. If you say they had “exceptional performance,” make sure you’d be comfortable explaining what that means if a new employer calls you later.
3) Reason For Leaving (Optional, But Often Requested)
You don’t always need to include the reason the employee left. However, it’s common for a departing employee to ask you to confirm something like:
- They resigned voluntarily
- Their fixed-term ended
- The role ended due to redundancy
If you include this, keep it short and factual. Avoid long explanations or commentary. Where the exit was sensitive (or disputed), it may be safer not to mention the reason at all.
Most reference letters include contact details for follow-up. You can also set expectations by stating you’re happy to confirm the contents of the letter, but nothing more.
This is especially helpful if your business has a Workplace policy about providing references (for example, only directors can provide written references, or only HR can verify employment).
What Should You Avoid Saying In A Reference Letter?
Even when you’re trying to be helpful, a poorly worded reference letter can create risk. The goal is to support the employee without exposing your business to avoidable disputes.
Avoid Opinions You Can’t Back Up
If you can’t support it with examples or records, don’t include it. Vague superlatives like “the best employee we’ve ever had” can come back to bite you if you later provide a different account verbally.
Health information (including mental health), family circumstances, and other sensitive personal information should generally stay out of a reference letter.
In New Zealand, the Privacy Act 2020 sets expectations around collecting, using, and disclosing personal information. Even if the employee tells you they’re comfortable with something being included, it’s usually best to keep the reference work-focused and minimal.
If you’re handling personal information more broadly in your business (staff or customers), having a clear Privacy Policy helps set expectations and reduce confusion about what information is used and why.
References should not include commentary relating to protected characteristics (for example, age, ethnicity, religion, disability, sex, sexual orientation, marital status). The Human Rights Act 1993 is relevant here, and even a “well-meaning” comment can be misinterpreted.
Keep it simple: stick to work performance and role-related skills.
Be careful not to disclose internal information about your customers, pricing, suppliers, systems, or processes. If the employee had confidentiality obligations during employment (or ongoing obligations after leaving), those should already be covered in your contract documents (often via a Confidentiality clause).
If there were performance issues, investigations, or warnings, it’s usually risky to include them in a reference letter unless you’ve taken specific legal advice.
Where an exit involved an agreed resolution, you may also have obligations around what can be said (for example, under a settlement or confidentiality arrangement). If a matter was resolved under a Deed of Settlement, check the terms before issuing any written statement.
How To Write A Reference Letter Without Creating Risk (Employer Checklist)
Here’s a practical process you can follow to keep references consistent in your business.
Step 1: Decide Whether Your Business Will Give References As Standard
Some small businesses give references for every employee who leaves (as long as employment ended on ordinary terms). Others only provide “confirmation of employment” letters unless specifically requested.
Whichever approach you choose, having a consistent process can help keep things fair and reduce misunderstandings.
Step 2: Confirm Who Is Allowed To Provide References
To avoid mixed messages, it’s smart to nominate one person (or role) who can issue references - for example, the director, office manager, or HR contact.
This helps because what you write may be relied on by third parties, and you want the content to be accurate and consistent with your records.
Step 3: Keep The Reference Consistent With Your Employment Records
Before you sign and send a reference letter, cross-check:
- Job title and duties
- Employment start and end dates
- Whether they were full-time/part-time
- Any key achievements you plan to mention
If you don’t have good records, this is a sign your internal HR documentation needs attention. Strong onboarding and documentation upfront (including a clear employment agreement) can save a lot of headaches later.
Step 4: Consider Whether You Need The Employee’s Consent
If you’re issuing a letter directly to the employee, consent is usually straightforward (they asked for it).
If you’re providing information to a prospective employer or recruiter directly, it’s best practice to confirm the employee has consented to you sharing details - especially if the reference goes beyond basic employment confirmation.
Step 5: Assume The Letter Could Be Shared
Even if you mark it “confidential,” a reference letter can be forwarded, uploaded, or used in ways you didn’t expect.
So write it on the assumption that:
- the employee will read it (they usually will)
- a new employer will rely on it
- it could be produced later if there’s a dispute
If you want to keep your process watertight, it can help to get an Employee termination documents suite in place so your exit process, letters, and handover steps are consistent.
Reference Letter Template (NZ Employers Can Adapt)
Below is a general template for an employee reference letter. You’ll want to adapt it for the role, your business, and the circumstances of departure.
Important: this is general information only and won’t suit every situation. If the departure was contentious, involved allegations, or you’re unsure what you can safely say, get tailored advice before issuing a reference.
Template: Reference Letter For Employee Leaving
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To Whom It May Concern,
Re: Employment Reference –
I am writing to provide a reference for , who was employed by as a from to .
In this role, was responsible for:
During their employment, demonstrated strong skills in and . They were also and worked well with .
left their position on due to .
If you require any further information, I can be contacted on or . Please note that I am able to confirm the information contained in this letter.
Yours faithfully,
If you want a more “basic” reference letter, you can remove the strengths paragraph and only confirm the employment details and duties. That approach can be a good fit if you have limited direct oversight of the employee’s day-to-day work, or you want to reduce the risk of misunderstandings.
Key Takeaways
- A reference letter for an employee who is leaving should be clear, truthful, and based on records you can support.
- In NZ, it’s common to include basic employment details (role, dates, duties) and optional performance comments if appropriate.
- Avoid including sensitive personal information, medical details, or anything that could be discriminatory or irrelevant to the role.
- Be careful about discussing disputes, disciplinary action, or contentious exits - and check any settlement terms before issuing a reference.
- Having a consistent internal process (and one person authorised to provide references) can help protect your business and keep things fair across the team.
If you’d like help getting your employment documents and processes in shape - including reference letter wording, exit letters, or employment agreements - you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
