Vicarious Liability

Innocent Employer Takes the Hit for Employee’s Failings

Vicarious liability is a legal concept which holds a company responsible for the wrongdoing of an employee or employees. If a vicarious liability argument is successful, there is no need to establish any improper conduct of the company. The liability or legal responsibility, in this sense, is said to be “strict”.

Vicarious liability is not a legal concept that is limited to just an employment relationship. However, the most frequent context which leads to a finding of vicarious liability is that of employee and employer.

Importantly, within a workplace context, it does not necessarily follow that every employment relationship will lead to a finding of vicarious liability. To the contrary, it is a difficult submission to make successfully.

Situations that Can Lead to a Finding of Vicarious Liability for an Employer

It is critical that the wrongdoing of the employee must be “closely and materially” related to the business of the employer. Conduct which is only coincidentally linked to the business of the employer and the duties of the employee will not justify the imposition of vicarious liability.  

 For example, should a man assault his wife’s lover, a co-worker, in an employee’s lounge, the employer should not be viewed as accountable. Equally, a security guard who decided to commit arson for his own amusement would not give rise to strict liability upon his employer.

However, a barista who accidentally poured hot water on a customer at the Starbucks counter is a good example of a case a finding of vicarious liability would likely be made. The negligence of the employee is one which is clearly “closely and materially” related to the wrongdoing.

However, if the employee’s conduct was deliberate, if the barista intentionally threw scalding hot water in the face of a customer, it would be unlikely that such a finding would follow.

The basic premise of the cases finding strict liability is that the conduct of the employee falls within the ambit of the risk created by the business, or enhanced by it. The policy arises where the wrong is so connected with the employment that it can be said that the employer has introduced the risk itself.

Hence where the risk is closely associated with the wrongful conduct, the employer should bear the risk and internalize the full cost of operation, including such liability. But where the wrongful act does not have a meaningful connection to the business, liability should not flow. The “mere opportunity” to commit a wrongdoing does not suffice. The business and employment must not only provide “the locale or the bare opportunity for the employee to commit his or her wrong, it must materially enhance the risk, in the sense of significantly contributing to it, before it is fair to hold the employer vicariously liable.”[1]

The Ontario Court of Appeal on Vicarious Liability

The Ontario Court of Appeal recently considered this issue in a case involving a taxi cab driver who had committed a sexual assault upon an intoxicated female passenger in the course of his job responsibilities.[2] The Court noted that the application of this concept becomes even more difficult in the case of an authorized intentional wrongdoing such as sexual assault.

The Court of Appeal upheld the trial decision dismissing the argument of vicarious liability and in so doing reviewed the tests of vicarious liability.

First Factor Opportunity – Opportunity for Abuse

The Court saw this issue as “not negligible” as intoxicated passengers, as in this case, must be trusting of the driver. The cab driver has a form of power and has the ability to create chances for abusive conduct. The Court saw, however, the opportunity for misconduct as “not as intimately connected to his functions”.

Second and Third Factors – Does Wrongdoing Extend the Employer’s Business; Extent to which the Business Purpose related to friction, confrontation or intimacy inherent in the business;

 The assault did not promote the employer’s business purpose and was “not related to friction, confrontation or intimacy inherent in the employer’s aims”. The Court found that the fact that the employer did not require or permit physical contact between the driver and the passenger “in any intimate body zones” was influential. In fact the company’s written directions were to avoid physical contact and dating requests.

Fourth Factor – Extent of Power Conferred on the Employee in Relation to the Victim;

To this issue, the Court noted that the employer delegated no power on the driver with respect to the plaintiff. It did not know that it as sending its driver to pick up a lone, intoxicated woman. The Court stated:

The relationship between the driver and the appellant was that of adult driver and adult fee-paying passenger.  Arguably, what power the driver had, he arrogated to himself through his own decisions.

Fifth Factor – Vulnerability

Clearly a lone drunk woman was vulnerable. However, as the Court stated, while this is an important factor, the power of the driver is not predicated on his employment. In any event, vulnerability does not per se provide the “strong link”.

The strong connection required for the finding of vicarious liability failed. Further from a policy prospective, the Court was not moved by the need to find “deep pockets”.

What Does this Mean in the Workplace?

The practical consequence to the person suing is apparent. It is very important to attach liability upon an entity able to pay. Ironically it may also be in the best interests of the taxi cab driver or the barista to have the employer held responsible as such a finding will likely mean no attempt will be made to collect on a judgment against them.

This principle may also be used in a sexual harassment case brought by an employee against a co-employee and by vicarious liability, against the employer. It will be, however, a difficult case to make in most fact situations.

Vicarious Liability a Tough Road to Hoe

Companies facing a claim of vicarious liability must understand the means of defending such a claim as noted above. The need for a “close and material” connection will often lead to a successful defence. The failure to do so will put the company in the shoes of the employee being sued. No matter if the employer’s conduct and practices are pristine, liability will nonetheless follow.

Employees may consider this issue from two perspectives. The first is in the context of making a claim against the company and a co-employee for sexual or other abuse in the workplace. The second circumstance so where the employee is directly sued by an outside player or a present or former workplace colleague. In each instance direction must again be focused on this difficult test of this “close and material” connection.

Get Advice

If you have questions about vicarious liability, get advice. Know your rights. Contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues, help you understand your rights, and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation.


[1] Bazley

[2] Ivic v Lakovic