Generally potential employees are asked to give references from their previous job. If the last job didn't end on a good note, is it acceptable to say no to providing references? If not, what is the best thing to do in this case?
There are two kinds of references - personal references and those of former supervisors. When you create a personal reference list, you should be looking for the people who are most likely to say something good about you. You have much less choice about listing former supervisors and their contact information. If the former supervisor has moved on, you can list the name and point out that you have lost contact with this person over time and do not know how to contact them. If he still works at the company, this will be revealed as a lie, so don't try it then. Being caught in a lie is the single worst thing you can do in looking for a new position.
If you have a former supervisor who will have something negative to say, first be aware that many companies do not let their supervisors give out more than dates of work at the particular place. If you were fired for cause, then they may say that as well, but they may not. If you want to find out what the person would say, then have someone you know call and pretend to be the HR person of a company who is checking your references. At least then you will know how serious the problem could be.
If you were fired and you know the person will give a poor reference, then the best strategy is to address that up front. Explain why you were fired, what you learned from it and why you don't think this will be a problem in a future job. It is most effective though if you have other strong references (from other supervisors not just co-workers) that you can point to.
This kind of thing can follow you around for a long time, so be very careful of how you leave a company in the future.
In the software industry, you have the opportunity to spend time working as a freelancere and then have client references that you can point to instead. This can get you past the time when the old poor reference would be most damaging.
Unless you burned your bridges with a flamethrower, there is usually SOMEONE at an old job who would say something nice about you. It will be a bit of a red flag if the person you offer up is only vaguely related to your job function and/or isn't a supervisor, but a weak reference is usually better than none at all.
In many places, a reference doesn't necessarily have to be from your last job, it could be from a previous job.
If you are still employed, you can even use the justification that you don't want to warn your current employer that you are looking for another job.
If not, you can still claim that a previous employer could provide a more objective assessment, especially if you are in the middle of claim for unfair dismissal.
Finally, in litigious locations, employers are often reticent to provide references which include anything other than verifiable fact. In many cases they will refuse to confirm anything other than the dates you worked there, since even saying how many sick days you took could be considered disclosure of private information and open them up to the risk of a libel case.
You can be honest about why you'd rather not provide references. If you DO say, up front, why you're not providing them, at least that avoids them "filling in the blank" on their own. Many company's policies are that personal references are not allowed, do there's always the "give them the number to HR" reference, but that's not really a character reference at all, which is what most people are looking for.
It's a tradeoff any way you look at it. One bad experience isn't going to kill your career or resume. It might be a bump in the road, but just keep moving, and make sure to learn from your past experience (i.e. make an active effort to make sure your next reference is a good one). Often times when a previous job's reference would be a bad reference, for example if I'd been fired from my previous position, there were probably opportunities that I passed up to have had an open conversation with my supervisor that would have led me to leave on my own before things went bad, and therefore resulting in a reference that would have been at least fair and level headed, rather than poor because I waited to be fired before leaving.
To the interviewer the fact that you don't provide references from the last job could be a Big Red Flag. The thought process when someone refuses to give references from their last position means that there was a conflict between this employee and the rest of the team that noone will give him or her the reference. This also means that this potential employee will have the same conflict in the new job so it might be better to simply pass on this candidate.