The Court of Appeal recently upheld the decision made in the case of Dagenais v. Pellerin, 2022 ONCA 76 which calls into question the scope of vicarious liability of an employer. This article will discuss how the court came to its reasoning, as well as outline the test for finding vicarious liability and the relevant case law referenced to reach this decision.
Vicarious liability involves placing the liability for one’s actions or inaction upon another person due to the nature of their relationship. This can include a parent and child, an employer and employee, an owner of a vehicle and the driver. At Common Law, an employer can be vicariously liable for the wrongful acts by an employee in the course and scope of their employment. In Canada, this is a form of strict liability. While vicarious liability does not look to evaluate the culpability of an employer, it executes accountability based on a factual situation, once one has been established.
Case Law Upheld
The recent decision in Dagenais v. Pellerin, 2022 ONCA 76, was upheld by the Court of Appeal. The motion judge found that the employer failed to demonstrate that they were not vicariously liable for the motor vehicle accident. The employee had been instructed by his supervisor to travel to a job site two hours away. While travelling, the employee stopped for a coffee along the way. As the employee returned to his vehicle and continued his journey, he struck another vehicle. The stop taken by the employee was found to have no basis or interference, thus meeting the standard for the first part of the Salmond Test, which is the test to determine vicarious liability.
The Test for Vicarious Liability
The test for vicarious liability is known as the Salmond Test which was affirmed by the Supreme Court of Canada Bazley v. Curry  2 S.C.R 534. The Salmond Test posits that employers are vicariously liable for:
- Employee acts authorized by the employer;
- Unauthorized acts so connected with the authorized acts that they may be regarded as modes of doing an authorized act, as shown in Canadian Pacific Railway Co. v. Lockhart,  A.C. 591 at 599 (P.C.)
Claimants must show that they have a valid cause of action against an employee for a fault they committed within the scope of their employment. This is linked to the idea that enterprises should be responsible for the risks they introduce into society, according to Justice McLachlin.
The scope of vicarious liability could range in inclusion; in particular, off-duty conduct as seen in the case of Cimpean v. Payton  O.J. No. 2665. The Ontario Superior Court has stated that “acting in the course of employment” is dependent upon each set of facts. After reviewing the employee contracts, it was found that the employment relationship extended to include responsibility for the behaviours outside of the workplace. Thus, impugned conduct can potentially be tied to the employee/employer relationship and thus holding the employer vicariously liable. Specifically, if the conduct advanced the employer’s interests, if the employee was in the process of performing an authorized act or if the employment relationship was not too isolated from the conduct.
Employers should be mindful of any acts of their employees that could potentially lead to reputation risk and financial consequences. Employers may be shocked to learn that despite the fact that they are not at fault for their employee’s accident, an employer may still be held liable, vicariously, for their employee’s actions or inactions. Where this will have a severe impact on an employer is if the employee is at fault, and the insurance coverage of the vehicle is not enough to cover a potential plaintiff’s damages. The employer, much like an at-fault party may be held personally liable for any amounts awarded which exceed the insurer’s policy limits. Through the case law mentioned, the courts have found that a finding of “acting in the course of employment” is dependent on specific facts relating to each case. However, reviewing employee contracts along with the status of their insurance coverage, with an experienced insurance and employment lawyer could assist in minimizing future risk.
If you have any questions regarding vicarious liability and your employment contract and any potential impact on your workplace, please contact Timothy Gindi at (416) 446-33340 or Timothy.Gindi@devrylaw.ca.
“This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.”
This blog was co-authored by Angela Victoria Papeo*