By Barry W. Kwasniewski and Martin U. Wissmath

Employer Liable for Damages Caused by Employee’s Negligence in Car Accident: Court of Appeal

An Ontario Court of Appeal decision affirming that an employer was vicariously liable for a motor vehicle accident involving an employee should remind charities and not-for-profits of the importance of non-owned automobile insurance. Published on January 28, 2022, Dagenais v Pellerin, 2022 ONCA 76 (the “Appeal”) upheld a lower court finding of vicarious liability (the “Judgment”) after the defendant employee (the “Employee”) admitted liability when his car collided with the plaintiff’s on Highway 17 while he was driving to a work site from Ottawa to Petawawa. Damages claimed by the plaintiffs exceeded the Employee’s $2 million personal automobile insurance coverage. The accident occurred in 2013 and, after some delay due to the pandemic, a summary judgment was granted by the Ontario Superior Court of Justice on June 25, 2021. The Employee worked as a concrete pourer for Slavko Concrete Finishing Inc. (the “Employer”) and was directed by the Employer to drive the two-hour route to the work site and back on the same day in his own car; he was also paid under the terms of a collective agreement. The Employer argued they should not be liable because the Employee, who was pulling into a Tim Hortons at the time the accident occurred, was not authorized to take such a coffee break. The Judgment applied a Supreme Court of Canada precedent involving a non-profit organization to conclude that the Employer was liable, a decision which the Employer then appealed.

In Bazley v Curry, [1999] 2 SCR 534 (Bazley), the Supreme Court of Canada (SCC) found that a non-profit organization was vicariously liable for tortious conduct of an employee, establishing that there is no exemption for non-profits, which would include charities and not-for-profit organizations. The SCC applied a two-part common law test for finding vicarious liability, known as the Salmond test, which

… posits that employers are vicariously liable for (1) employee acts authorized by the employer; or (2) unauthorized acts so connected with authorized acts that they may be regarded as modes (albeit improper modes) of doing an authorized act.

The Judgment concluded on the facts that the Employee was authorized to take a coffee break and that satisfied the first part of the Salmond test. If the second part of the test applied, then a further test would be required to assess the facts, from the Bazley precedent, based on policies of fairness and deterrence. Although the Employer argued on this point in the Appeal, the court upheld the Judgment, citing the phrase that a coffee break by the Employee was not a “ ‘frolic of his own’ … where the employee went off to socialize for a lengthy period during the drive’.” Therefore, there was no reason to interfere with the Judgment. The amount of damages to be awarded has been left for trial.

Charities and not-for-profits should be careful to note that vicarious liability may involve no wrongdoing by or negligence of the organization, and liability can ensue even in the absence of fault. Non-owned automobile insurance is advisable if a charity or not-for-profit requires personnel to use their own vehicles for work-related duties. Non-owned automobile insurance coverage provides insurance protection when an employee occasionally has to drive his or her personally owned vehicle for the purposes of their employment. This assumes that the vehicle is not owned, registered or contracted in the organization’s name or on the organization’s behalf.

​Read the February 2022 Charity & NFP Law Update