Canadian Law has long recognized that employers are, in certain
circumstances, responsible for the wrongful actions of their
employees. Cases in which employers may be found vicariously
liable can vary, below is a summary of the general principles
governing an employer's vicarious liability.
There are two broad categories of circumstances in which
employers will be held liable for torts or wrongful actions
committed by their employees: cases in which the act in question is
authorized by the employer and cases in which, though not expressly
authorized, the nature of the act is such that it is sufficiently
connected to conduct that was authorized by the
It is especially important for employers to fully appreciate the
latter of these two categories and the types of cases that can fall
within it. While it may be somewhat intuitive that an employer
would be held liable for its employee's conduct where that
conduct was directed or authorized by the employer, employers may
find themselves liable for employee actions which were not only
unauthorized but which run contrary to the employer's
instructions or expectations. Cases of this nature include willful
and deliberate wrongs committed by employees (e.g. fraud, theft,
assault, sexual assault, etc.). Courts have repeatedly found
employers liable in such cases on the basis that the employer,
through its activities and through its employees, has introduced or
materially increased a certain risk into the community. Where the
employer's contribution to such risk is sufficiently
significant, courts will hold the employer liable for an
employee's wrongful actions.
Mitigation of Risk
It is said that the policy rationale that justifies fixing an
employer with liability for its employee's wrongs is twofold
– seeing that the innocent party that has suffered a loss
receives fair compensation (on the assumption that an employer will
more often than not be in a better position to bear the burden of
such compensation than the individual employee whose actions caused
the harm) and deterrence. The types of behaviour and practices at
which the deterrence objective takes aim provide useful
considerations for employers who wish to mitigate, to the extent
possible, their exposure to liability for employees' wrongful
acts. Such considerations include:
Ensuring that employees are fully familiarized with the extent
of their duties, responsibilities and powers in the context of
Ensuring that instructions given to employees do not increase
the risk of the employees committing wrongful acts – as an
example, giving an employee an unrealistic deadline for the
completion of a task would tend to increase the risk that the
employee may resort to unlawful means to meet that deadline (e.g.
having the driver of a delivery vehicle make a delivery in too
short a time may increase the risk of him or her driving recklessly
Taking precautions against creating or allowing situations of
friction or tension to develop in the workplace – allowing
such an environment to take hold or to persist would likely be
grounds for finding the employer liable for the ensuing
Providing employees with adequate supervision in order to
ensure that they do not exceed the authority given to them by the
employer and that they do not resort to wrongful actions either in
performing their duties or generally in the course of their conduct
at the workplace.
Having clear policies and complaint procedures, which can be
included in an Employee Handbook, could be a great tool for
ensuring that employees are aware of the precise scope of their
duties and responsibilities, of the employer's expectations and
of the avenues available to them in case problems arise.
Given the potentially far-reaching implications of vicarious
liability, employers should be aware of the risks and should
consider these and other factors in a continuous effort to mitigate
the level of exposure to vicarious liability.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).