A cautionary tale – Do not burn that bridge

A cautionary tale – How you do one thing, is how you do everything:

Late last year, we worked with a client who found themselves in a situation no business owner ever wants to be in.

They were fighting to stay afloat. Revenue was tanking, costs were climbing, and they’d done the hard thing just before Christmas, made a round of redundancies – four people to be exact (almost half their workforce). Brutal timing, yes, but also necessary to give the business a chance at survival.

Fast-forward 3 months into this year, and the situation hadn’t improved. There were just five team members left. The owners gathered them all and laid it out: “We’ve got enough cash to get through six more months—if nothing changes.”

Dire? Yep. But they were honest, transparent, and trying to do the right thing. They wanted to let people know where they stood as the rumour mill was in overdrive. People are not stupid, and they could see the writing on the wall.

Unfortunately, they had to make another role redundant. This time, it was a Senior Leadership position that needed to be cut. The person was on the second-highest salary compared to the CEO, and this person had been solid, but in all honesty, there was not much left to manage since the team had been significantly reduced. The employee must have felt this and seen this coming. So, with our help, the redundancy process was handled by the book. Clear business case. Thorough consultation. An open invitation for the employee to suggest alternatives.

However, instead of engaging in that process, the employee shot back with a legal threat: twelve months’ pay or we go to court for unfair dismissal and adverse action.

The twist? He’d done this before. In fact, he told the owner point-blank (whilst drunk at a company offsite) that he’d “cleaned up” using the same tactics at his last job. He joked about this being the real reason he couldn’t use them as a reference.

That’s when the penny dropped. When this person was first hired, they’d failed to provide references from their last three roles. Red flag city. But in the hustle of running a business, the owner let it slide. Hindsight is a wonderful thing, right? So what is the lesson here?

Lesson number one: for employers—don’t ignore red flags during recruitment.

If someone can’t produce recent or relevant references, there’s usually a reason. Often, it’s not because they “didn’t get along with the manager” or “the company was toxic.” Sometimes it’s because they left a trail of scorched earth behind them. Aka – said employee. Let’s call him Wayne.

References aren’t just a tick-box; they’re a window into how someone exits a workplace. And how someone exits says everything about how they operate under pressure, or when they feel threatened or even worse when they are “aggrieved”.

Lesson number two: For employees, be careful about how you leave.

We know how it works. Being let go hurts. It’s often a massive kick in the guts, and your instant reaction is normally one of anger. So sure, you might win a payout. But at what cost? Your reputation? Your integrity? A solid reference to snag that next job. You betcha.

Don’t forget that word gets around. Industries talk. And if your go-to exit strategy is to light the place on fire and demand a settlement, don’t be surprised when the bridges you’ve burned stop you from crossing into future opportunities.

We’re not saying don’t stand up for yourself. If you’ve genuinely been treated unfairly, speak up. Use the system. But if you’re using legal threats as leverage every time you leave a job, eventually that will catch up with you. And for poor old Wayne, this was 100% the case.

Because how you do one thing is how you do everything.

When businesses are vulnerable, employees have power. But power comes with responsibility. There are ways to raise concerns, ask questions, or even challenge decisions without turning it into war.

The same goes for leaders. If you ignore the signs early, you can’t act shocked when it bites you on the way out.

This situation could’ve been avoided with a couple of solid reference checks. But it also could’ve been salvaged with a little goodwill and mutual respect at the end.

Wayne 100% could have handled it differently. He could have asked for a sweetener on his way out, to bridge the gap. He could have pleaded his case. Maybe he just had a baby or secured a new home loan. My client would have been willing to come to the table, and Wayne could have walked away with the relationship intact and also a fair redundancy package – and a reference to boot!

So, here’s the takeaway for both sides:

Employers:

Always check references, especially the recent ones. Look for patterns—not just performance, but also ask and hone in on how people left.

Employees:

Don’t burn bridges in the heat of the moment. The way you exit matters. Integrity travels with you—so does everything else.

So let’s build workplaces where both sides can walk away with dignity, even when things don’t work out.

Because in business, as in life, how you do that one thing, is really is how you do everything.

FAQs

What should we actually be checking when someone can’t provide recent references?
Push for it rather than letting it slide. Ask specifically for referees from their most recent one or two roles, not just older or more flattering ones. If someone consistently can’t produce recent references, or the reasons given feel vague or defensive, that pattern is worth taking seriously. References tell you as much about how someone exits a workplace as they do about performance.

Does running a genuine, proper redundancy process protect us if an employee still threatens legal action?
It puts you in a far stronger position, but it doesn’t guarantee someone won’t push back regardless. A clear business case, thorough consultation, and a genuine opportunity for the employee to respond are exactly what the law requires, and exactly what protects you if a claim is tested. Some people will threaten action even when the process was done properly. That’s a separate issue from whether your process actually holds up.

Should we ever offer a settlement just to avoid the hassle of a threatened claim, even if we’ve done everything right?
That’s a commercial decision as much as a legal one, and it depends on the specific situation. If your process was genuinely sound, you’re not obligated to pay simply because someone threatens court. That said, sometimes a modest goodwill gesture, offered from a position of strength rather than panic, can preserve the relationship and avoid unnecessary conflict. The key difference is choosing to offer something versus being pressured into a large payout under threat.

How do we handle redundancies during a genuinely difficult financial period without creating more risk?
Be honest and transparent with the remaining team about where the business stands, and run the actual redundancy process by the book regardless of how urgent it feels. Financial pressure doesn’t lower the bar for consultation or process. If anything, a business under strain has less capacity to absorb the cost of getting it wrong, so the process matters even more, not less.