This is fairlycan vary by country and it's actually common in some cultures. I have seen this happening in the UK across different fields.
Generally the way it works is that the employer will ask a reference once they have the final decision to accept you in, and it is more of a "final check". Unless the letter says something terrible (such as you steal, or something on this level) they will hire the person.
Also interestingly, in the UK reference letters are often "Yes, this person works/worked here, and we have no incident with them" and are often made by HR, not your current boss. If an employer is expecting this level of reference letter, then its not unreasonable to ask it to the current employer.