Q: What do we do about a job applicant who appears excellent but has a poor reference?
A: First, ask yourself why you use references. You may use them simply to confirm a candidate's previous job history, in which case any contradictions can probably be easily resolved. But in most cases the candidate has the right to conceal any spent convictions and therefore leave unexplained gaps in their CV.
However, if you are using a reference request to find out how well the candidate performed in a previous job and what comes back is less than glowing, you might be alarmed.
You should make it clear to the referee that their words might be disclosed to the candidate. Before retracting a job offer, consider why the reference might be bad. There could have been a personality clash, and the applicant might fit better into your team. They might have made a mistake they won't repeat. Or they could have a poor disciplinary or attendance record, and perhaps they'll do better with you.
But you should not ignore the information. You need to consider the candidate in the context of the job they are going to, not the one they are coming from. The best way to do that is to address the concerns expressed in the reference in a meeting with the candidate.
Ask them to give their perspective and explain how the damning information will affect how they will work for you. Explore the causes of the problems, and see if their explanation seems satisfactory. A malicious reference could be defamation, but that's between the candidate and the referee.
If you're not satisfied, you can legitimately withdraw the job offer. And if they think the reference is unfair, invite them to nominate a new referee. There will be no legal problems for you in this approach, provided you made the job offer conditional on references.
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