When You Can't Give a Positive Reference

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I think that the only time when one should give a poor reference is if the person in question was a recent employee and the job they are applying for is very similar to what they did for you. Or the person was just generally a "bad employee": unreliable, combative, dishonest or lazy.
Before you give someone a bad reference-find out what position the applicant is applying for and what it entails. You may have had a former employee that may have been not a good fit your your organization or the position at the time. If the person is applying for a job which is different than what the person held with your organization, you could say that you may not be qualified to be a reference due to the fact that what job the person did for you is different to what they are applying for now. Sometimes a particular job just is not a good fit and that does not necessarily mean that this person could not be a valuable employee to another company doing something more in alignment with their talents and abilities. Let the person move on.
Additionally, I would agree that if that person has not worked for you in a few years, you should say what was said in the above article and refrain from commenting on the employee poorly since this person may have improved greatly since you worked with them.

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