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Caveat Dominus - Let the Employer Beware: Vicarious Liability in the Age of #MeToo

While ongoing discussions of harassment have mainly been situated in the human rights register (see our own series of posts on our Labour and Employment Law Blog), employers should also be aware of possible liability in the civil context.  Tort law allows complainants to sue for damages for harm visited upon them by another.  Traditional torts that might apply in a case of harassment include those of battery, assault, false imprisonment, and/or intentional infliction of mental suffering.  Recently, the Ontario Superior Court of Justice in Merrifield v. The Attorney General (2017 ONSC 1333) recognized that harassment itself, including workplace harassment, could be recognized as a standalone tort.

Vicarious Liability

Vicarious liability is the doctrine that holds third-parties legally liable for the actions of others.  While workers compensation legislation generally covers injuries sustained during the course of employment, employers may still be independently liable for unauthorized actions committed by their employees.

The leading case in Canada on vicarious liability is the Supreme Court's decision in Bazley v. Curry (2 S.C.R. 534, 1999 CanLII 692).  Justice McLachlin, as she then was, held that:

…employers may justly be held liable where the act falls within the ambit of the risk that the employer’s enterprise creates or exacerbates….  The question in each case is whether there is a connection or nexus between the employment enterprise and that wrong that justifies imposition of vicarious liability on the employer for the wrong, in terms of fair allocation of the consequences of the risk and/or deterrence.

The animating question behind the Bazley test is whether the employer materially enhanced, or significantly contributed, to the risk that something illicit could occur.

Recent Cases

Two recent cases help contextualize the way courts apply the test in Bazley to harassment claims.

In Robertson v. Manitoba Keewatinowi Okimakanak Inc. et al., 2011 MBCA 4, the plaintiff, Robertson, sued her boss, Richard Hart, and their mutual employer, Manitoba Keewatinowi Okimakanak Inc. ("MKO").  Robertson was Hart's executive assistant and on her birthday she accepted his invitation to a celebratory dinner at a restaurant.  Following the dinner, Robertson alleged that Hart sexually assaulted her at his home.  Robertson subsequently complained to MKO and the company fired Hart after obtaining a report from its independent investigator.

The Manitoba courts held that MKO could not be held vicariously liable.  While providing a shared workplace undeniably played some role, it was not viewed as significantly contributing to the risk of the assault which took place outside of work hours and the workplace.  As such, this case stands for the proposition that merely being employed together, without more, does not create the sort of risky enterprise that can result in an employer's liability.

On the other hand, in K.L. v. 1163957799 Quebec Inc., 2015 ONSC 2417 (Calypso), the Ontario Superior Court of Justice held that the employer, publicly known as Calypso Water Park Inc., could be sued for vicarious liability.  In this case, the plaintiff, K.L. alleged that she was assaulted by her supervisor at Calypso Water Park.  The alleged assault happened during an end-of-season staff party hosted on the grounds of the park.  Justice Patrick Smith held that Calypso's choice in hosting a party at the workplace with unrestricted alcohol and without adequate supervision were factors that could lead to a finding of vicarious liability.

While the Calypso decision is only a preliminary decision, and no decision on the merits of the allegations has been released, the judgment should put employers on notice of the type of conduct to which courts would be attentive when deciding on vicarious liability. 

Takeaways

An important takeaway from the case law is that employers should be cautious about creating (or exacerbating) opportunities that increase the risk of harassment or assault.  The judgment in Calypso is a reminder that the courts view staff parties as part-and-parcel of an employer's business as they generate goodwill among employees.  Thus, in contrast with Robertson where the social event preceding the assault was a private one, a staff party will be scrutinized by the courts for the role it plays in contributing to any negative outcomes.

Employers should be mindful of situations where alcohol (or marijuana, come October) is permitted or provided liberally.  In Calypso, the judge noted that had the employer hired a bartender to control consumption, it would have reduced the foreseeable risk that partygoers would become inebriated and that negative incidents might occur.

Finally, the choice of locale and the quality of supervision for social events will also be a factor that courts may examine.  In Calypso, the fact that the employer hosted a staff party at a large waterpark with extensive grounds, where supervision was difficult and where individuals could easily become isolated and vulnerable, was a major contributing factor in the judgment.

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Lawson Lundell's Labour and Employment Law Blog provides updates on the most recent legal developments impacting the Canadian workplace and offers practical tips for employers. We cover a range of topics, including labour relations, employment law, collective bargaining, human rights, employment standards, employment equity, workers' compensation, business immigration, privacy, occupational health and safety and pensions and employee benefits. 

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