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Human Rights: Employer Liability The issue of whom should be named as a respondent in a human rights complaint is regrettably complicated. The answer to this question depends very much on the statute of the relevant jurisdiction and also the nature of the remedy which is sought.
The common law principle of vicarious liability may lead to the conclusion that the employer is legally responsible for the acts of its employees which take place in the course of employment. Generally there is no need to apply common law principles to a human rights complaint due to the statutory provisions and the Supreme Court decision in Robichaud .
Statutory Liability under the Human Rights Statute Most human rights statutes now deem that the company is responsible for the actions of its employees, officers and directors in which occur in the course of employment. Absent such a provision in the relevant statute, the leading case on this subject has also determined that the employer should be responsible for human rights violations of its employees in the course of employment.
B.C. is an example of a jurisdiction which does not have such a statutory provision dealing with or in any way qualifying employer liability. Accordingly, the relevant law is the common law by which the employer is responsible, in a human rights context, for all acts of its employees committed in the course of the employment relationship.
The law is the same as in Saskatchewan, Nova Scotia, PEI, Newfoundland & Labrador, NWT, Nunavut and Quebec.
Ontario Ontario’s Human Rights Code contains a deeming provision holding an employer responsible for the conduct of its officer, official, employee or agent in the course of their employment.
This provision, however, does not apply to freedom from harassment in the workplace, sexual harassment in the workplace and sexual solicitation and freedom from reprisal connected to sexual solicitation.
There is hence is no deemed liability upon the employer for wrongdoings under these remedy sections.
Thus, under the Ontario Code, the complaint must be brought personally against the individual who is accused of the offensive conduct.
Due Diligence Defence Other jurisdictions, however, have allowed by statute for vicarious liability to hold the employer responsible, but have permitted a defence when the employer has shown due diligence, amongst other tests, in its investigating the complaint.
The Federal legislation, however, allows for a “due diligence” defence to be raised against the assertion of statutory liability. This defence applies to all claims made under the Canadian Human Rights Act, not just sexual harassment claims, as allowed by subsections 65(1) and (2). The employer must show that (1) it did not consent to questioned conduct, (2) and it used all due diligence to prevent event and (3) did all it could to minimize or avoid the adverse consequences.
Manitoba has enacted legislation which defines the concept of employer liability for the acts of its employees. Provided that the conduct was in the course of employment, the employer is deemed responsible.
However, the employer may show a defence by proving, as with the federal statute: (1) it did not consent to the conduct, (2) took all reasonable steps to prevent it, and (3) then took all reasonable steps to minimize or avoid the effect of the offensive actions. This is not limited to sexual harassment but rather applies to all Code violations.
The substance of this provision is repeated in the legislation of the Yukon.
New Brunswick has similar legislation with respect to a complaint of sexual harassment, which deems the actions of the employee to be those of the employer, but then allows the employer a defence of showing it used due diligence to prevent such conduct. The same three tests apply.
This defence is not available where the questioned conduct is that of an officer or director of the employer, which basically incorporates the “organic theory” of employer liability described below.
This statutory provisions allowing for a full or partial defence to the employer to the vicarious liability assertion allow for a defence to be shown, in essence, in line with the Wall test, namely that it took proper preparatory steps by a written policy, followed it, investigated the complaint and took steps to resolve it.
This does not, however, end the analysis of employer liability.
Organic Liability This concept of “organic liability” provides an argument that the employer company is responsible for the conduct of its principals. It is different from vicarious liability. The theory is that a legal entity can only act through its principals and hence the company will held liable for such conduct of its “principals” or “its directing mind” in a sexual harassment case, or a similar situation where the statute’s deeming provision of liability upon the employer does not apply.
This is also distinct from the common law test used to pierce the corporate veil, as reviewed here .
An individual who has “complete control” of a corporation and where there is “conduct akin to a fraud” will potentially lead to personal liability for the acts of the company. This principle may also apply where those persons in control of a corporation expressly direct a wrongful act.
In such circumstances, the court will pierce the corporate veil and hold the individual personally responsible.
Such was the finding of the Ontario Court of Appeal in a 2020 decision upholding the trial judge’s finding of personal liability upon the principal:
[26] The trial judge held that Spirit was completely controlled by Kramer and that Spirit was being used as a shield for fraudulent or improper conduct. He found that (i) Kramer was “the controlling will and mind of both Spirit”; (ii) Kramer was “simply transferring all of the money in each between his own pockets”; (iii) Spirit was “just a plaything of Kramer’s”; and (iv) Spirit “must be considered an accomplice to Kramer’s fraudulent activities”.
[27] These findings of fact would be sufficient to pierce the corporate veil and hold Kramer liable for obligations of Spirit — here they have a different but equally well-founded consequence. When Kramer directed Spirit to participate in — be an accomplice to — wrongful conduct, Spirit was rendered liable for that conduct. [page590] When the controlling mind of the corporation directs it to do a wrongful act it can scarcely be argued that the corporation commits the act with impunity.
The above review, however, still does not end the analysis of employer liability.
Poisoned Work Environment The remains a further means of establishing employer liability due to the existence of a “poisoned work environment”. This liability is not exempted from the deeming provisions of the Ontario Code. Management employees who fail to take remedial action to eliminate such a work environment and the corporation may both be liable for a breach of this obligation. In essence, a company which has failed to deal with Code violations prevalent in the workplace will take on this liability due to its failure to assure a proper and safe workplace.
This remedy is available in all jurisdictions. Ontario is noted as the liability in this instance is direct upon the employer, unlike the general direction of the related sexual harassment claims. This issue is reviewed in more detail here .
General Reprisal The word “reprisal” can lead to confusion as there are two types of such retaliatory conduct often described as “reprisal”. The first is such actions taken by the employer in response to the filing or threatened filing of any human rights complaint. To make the analysis clear, this is referenced as “General Reprisal”.
The second is conduct of the employer or an individual against a person who has not acceded to demands for sexual favours. This conduct is generally defined as a form of sexual harassment which for this purpose, it will be referenced as “Sexual Reprisal”.
Conduct which is retaliatory to the threat of or the commencement of a human rights complaint is actionable as reprisal. This is to be distinguished from adverse conduct due to the failure to reply to sexual solicitation.
The employer has direct liability for such a complaint of General Reprisal. This issue is reviewed in detail here.
Failure to Investigate There may also be direct liability for the failure to investigate. There has been debate as to whether this is distinct remedy under human rights jurisprudence. It is often used in tandem to support a poisoned work environment submission. This is reviewed in more detail here .
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