Vicarious liability in employment
What happens if an employee commits a wrongdoing in the course of their employment and causes damage to a third party? Can the employer be held accountable for the employee's actions and resulting damages?
The short answer is yes, sometimes.
"Vicarious liability" is a legal concept that allows for an employer to be held responsible for the harm or damages caused by the wrongful conduct of their employee, regardless of whether the employer itself did anything wrong. Vicarious liability is a form of "strict liability", which means there is no requirement to prove intent on the part of the employer. Rather, the liability arises as a result of the relationship between the employee and the employer.
Scope of Employment:
An employer is not automatically liable for any wrongdoing by an employee. That would be unfair. Rather, an employer will only be vicariously liable if the employee committed a tort (a.k.a. a civil wrongdoing) and the tort occurred in the "scope of employment".
To determine whether the wrongdoing occurred in the "scope of employment", it is first necessary to determine if the act was authorized by the employer, or not.
Authorized Acts:
Where the act was authorized by the employer, it is quite straightforward – the tort will have occurred within the scope of employment and the employer will be liable. A common example of this is where an employee is ordered to drive for work and crashes. The employer may be vicariously liable for any resulting damages.
Unauthorized Acts:
Where the act was not authorized by the employer, it can be more complex. Vicarious liability will only be imposed where the "unauthorized acts so connect with authorized acts that they may be regarded as modes (albeit improper modes) of doing an authorized act."[1]
But what does it mean for an unauthorized act to be a "mode" of performing an authorized act?
In Bazley v. Curry, 1999 CanLII 692 (SCC), the Supreme Court of Canada provided the following guidance for answering that tricky question:
- Look to see if there is past caselaw that determines whether liability arises;
- If the past caselaw is inconclusive, the following considerations are relevant:
- The court should openly confront the question of whether liability should lie against the employer, rather than obscuring the decision beneath semantic discussions of "scope of employment" and "mode of conduct".
- The fundamental question is whether the wrongful act is sufficiently related to conduct authorized by the employer to justify the imposition of vicarious liability. Vicarious liability is generally appropriate where there is a significant connection between the creation or enhancement of a risk and the wrong arises from that risk, even if it is unrelated to the employer's desires.
- In determining the sufficiency of the connection between the employer's creation or enhancement of the risk and the wrong complained of, subsidiary factors may be considered, including:
- The opportunity that the enterprise afforded the employee to abuse his or her power;
- The extent to which the wrongful act may have furthered the employers' aim (and hence be more likely to have been committed by the employee);
- The extent to which the wrongful act was related to friction, confrontation, or intimacy inherent in the employer's enterprise;
- The extent of power conferred on the employee in relation to the victim; and
- The vulnerability of potential victims to wrongful exercise of the employee's power.
A highly fact and context specific approach is required. For example, two employees could commit the same wrongful act, but whether the employer is found vicariously liable or not may vary depending on factors such as the role the employee held, how closely the wrongful act related to their work duties, or whether the employee was in a position of power.
Examples:
Some examples of cases where employers have, and have not, been found vicariously liable for their employee's actions are outlined below.
Sexual Assault:
Issues of vicarious liability have arisen in sexual assault cases. The Supreme Court case of Bazel v. Curry dealt with a situation where an employee sexually assaulted a child in the employer's case. The employee had been hired to perform parental duties to children in the employer's care, such as tucking them in at night. The court held that the employer's enterprise created and fostered the risk that led to the ultimate harm, and thus the employer should be liable for the damages.
On the flipside, in E.B. v. Order of the Oblates of Mary Immaculate in the Province of British Columbia, 2005 SCC 60, a residential school for Indigenous children employed a baker who repeatedly sexually assaulted a child attending the school. The Supreme Court found there was no vicarious liability on the basis the employee was merely a baker whose responsibilities were "remote from actually looking after the children". This is in contrast to Bazley v. Curry, where the employee had specific tasks which put children in his care and created the opportunity for abuse.
Driving:
As mentioned above, vicarious liability can also arise from car accidents which occur while an employee is driving a work vehicle or driving for their employment. For example, in Dagenais v. Pellerin, 2022 ONCA 76, the Court of Appeal found the employer was vicariously liable for an accident the employee was in while travelling to a job on the instructions of his supervisor. The Court found the fact the employee had stopped for coffee along the way did not prevent the act of driving from being authorized by the employer.
Breach of Privacy:
A recent British Columbia case, Insurance Corporation of British Columbia v. Ari, 2023 BCCA 331, found the employer vicariously liable for the harm caused by an employee's breach of privacy. In this case, the employee sold private information belonging to the employer's customers, including their licence plates linked to their home address, to a third party. Some of the customers were then targeted with arson and shooting attacks. In finding the employer was vicariously liable, the court emphasized that the employee's responsibilities as claim adjusters directly involved working with customer's personal information, and this created a risk she might access the information for an improper purpose. The employer created a risk in having her perform those duties, the risk materialized, and thus the employer was held responsible.
Takeaways:
It may not be possible to eliminate all risks of vicarious liability claims. But employers would do well to carefully check their practices and policies to ensure that they have put appropriate safeguards in place to minimize the risks of employees acting improperly in the course of their employment. In the event an incident does arise, employers are encouraged to promptly seek legal advice so they may understand the risks and develop strategies to limit their exposure.
[1] Bazley v. Curry, at para. 10
