5) Liability of the Employee or the Agent

The rules of vicarious liability in respect of employers and principals do not prevent an action being brought against the employee or agent personally. [Note 54: As a general rule this is so even if the employee is carrying out services in performance of a contract between his employer and the plaintiff; see London Drugs Ltd. v. Kuehne & Nagel International Ltd., [1992] 3 S.C.R. 299.] The rules of vicarious liability are designed to secure the responsibility of the employer and the principal, not to exonerate the tortfeasor. Moreover, the doctrine of indemnification allows an employer to seek reimbursement from an employee on whose behalf it has been found vicariously liable. [Note 55: Lister v. Romford Ice & Cold Storage Co., [1957] A.C. 555 (H.L.).] A similar result may arise from the fact that employers and employees and principals and agents are joint tortfeasors. This allows both to be sued and permits the employer or principal to seek contribution from the employee or agent tortfeasor under the applicable apportionment legislation. In practice, however, employers and principals rarely seek reimbursement.

Still, there continues to be some doubt about the personal liability of an employee for a negligent misrepresentation causing economic loss made in the course of performing a contract of service between his employer and the plaintiff. In Edgeworth Construction Ltd. v. N.D. Lea & Associates Ltd., [Note 56: [1993] 3 S.C.R. 206. ] the Supreme Court held that only the employer of engineers who negligently prepared plans and specification for the design and construction of a highway was liable to the plaintiff contractor who relied on them to its detriment. Other cases have distinguished Edgeworth and have imposed liability on the employee provided that the requisite elements for liability for negligent misrepresentation, including reasonable and foreseeable reliance, can be established against the employee. [Note 57: Strata Plan No. VR 1720 v. Bart Developments Ltd. (1998), [1999] 53 B.C.L.R. (3d) 289 (S.C.). See also NBD Bank, Canada v. Dofasco Inc., [1999] O.J. No. 4749 (C.A.) (QL).]

6) Direct Liability of Employers and Principals

Vicarious liability does not exclude the direct and personal liability of an employer or principal for the breach of a personal duty owed directly to the plaintiff. Liability may arise, for example, where an employer has authorized or instigated a tortious act, or has failed to train or supervise an employee, or has requested that an employee carry out tasks that are beyond his abilities and expertise. [Note 58: In Griffiths, above note 48, for example, the Supreme Court sent the case back to trial to determine if there was any fault-based liability on the employer for the sexual assaults of the employee on the plaintiffs.]

There is also the concept of a negligent hiring, which is more developed in the United States than it is in Canada. It arises where the employer of an employee, agent, or independent contractor fails to take appropriate care, such as seeking references or doing background checks in the hiring process, and employs a person who is unfit for the position or task. The advantage of framing the action in this way is that it may avoid some of the restrictions of vicarious liability. Imagine, for example, that an employee commits a sexual assault on a customer or client which is held to be outside the scope of employment. If the employment created an opportunity for the assault, liability may be based on the failure to do background checks that would have disclosed past sexual misconduct of a similar nature. A personal duty of care in the selection of personnel is particularly warranted where the employee will be in a position of authority and power over vulnerable persons such as children or in a position of trust dealing with the finances of the employer's customers.