Employers and Vicarious Liability

It is a well-known principle of law that, generally, Employers are liable for the negligence of their Employees.  This is known as Vicarious Liability.

What is Vicarious Liability?

Vicarious Liability exists where the law imposes liability on one person for the misconduct of another person, because of the relationship that exists between the wrongdoer and the person being held vicariously liable.  The most common of these relationships that attracts Vicarious Liability is the relationship between an Employer and an Employee.  The Supreme Court of Canada has consistently directed that this is fair and just for several reasons:

1. The Employer is in a position to control the activities of the Employee;
   
   
2. The Employer profits from the activities of the Employee, and should therefore also bear the risk of loss caused by the activities of the Employee; and
   
   
3. The Employer is better able to bear the burden of liability than the employee, which helps the innocent victim to recover damages for the loss.

There may be other reasons, unique to every case, that an Employer will be held responsible for the actions of its Employees.

Vicarious Liability is said to be “strict”.  That means, unless an Employer can prove that the relationship between them and the wrongdoer was one that does not attract Vicarious Liability, or if the wrongdoing did not occur within the course of the Employee’s duties, the Employer will likely be held responsible for the negligence or even deliberate wrongful conduct of their Employee, even if the Employer itself did nothing wrong.

How can we tell who has Vicarious Liability as an Employer?

There are many factors to consider when trying to determine if a wrongdoer was an “Employee” of another person.  These include, classically, whether the Employer controlled the Employee’s hours of work, activities during those hours, method of doing the work, and the worksite itself.  They also include how the worker was paid, who was responsible for paying taxes and statutory deductions such as Employment Insurance or Canada Pension Plan contributions, and other financial obligations.  The list of possible factors is not closed, and every case may be different depending on its facts.  However, there are some relationships that are regularly found to be Employer/Employee relationships.

Nurses working in Hospitals, for example, are almost always employees of the entity that operates the Hospital: usually Alberta Health Services or Covenant Health.  Nurses, technicians, receptionists, and other staff working in a private doctor’s or dentist’s office are usually the employees of the doctor or dentist, or their professional corporations.  “Front-line” employees working in grocery stores, retail outlets, or restaurants, are usually the employees of the company that runs the business.

In some situations, however, a wrongdoer may not be an Employee, even when they might appear to be.  For example, construction workers are often independent contractors, or employees of independent contractors, to the owner or prime contractor on a worksite.  Financial and professional advisors may be employees of a company, or they may be independent contractors who are only associated with one another for advertising purposes.

This is a complex area of law, and this brief overview should not be taken as a substitute for sound individual advice from a lawyer.  If you are or think you may be an Employer, experienced legal advice is often required to determine if you have Vicarious Liability for another person, and to protect you from exposure to Vicarious Liability from unexpected sources.  If you have been injured by someone else’s negligence, it is important that you gather as much information as possible about who was involved in your injury and where and for whom they may have been working at the time, so that you and your lawyer can determine if other parties may also have Vicarious Liability for your injury. 

By Nigel Forster