Decline to give a reference if you feel that you must say negative things about the employee. Find something positive to say, but don't overstate the case.
1234, Main Street
Boston, MA 02123
<Recipient Address Goes Here>
This letter is a response to your request for a reference for <name of employee>, who worked for Abc Company as <job title> from <range of dates>. During that time, <he/she> performed all <his/her> major duties as required and had no problem cooperating with <his/her> co-workers. <Optional additional accolades.>
Please feel free to call me at <telephone number> if you require additional information.