Beware of claims by third parties

Negligent hiring and staffing practices could expose employers to a claim by a third party hurt by an employee
By Mark Mason
|Canadian Employment Law Today

Employers have an obligation to use skill and care when hiring employees. In certain circumstances the failure to do so could result in a claim by a third party for damages against the employer based on negligent hiring.

A claim in negligent hiring can have a powerful advantage over a claim based on vicarious liability. In order for an employer to be liable under the doctrine of vicarious liability, a third party must show an employee engaged in misconduct while in the course of employment. In a claim for negligent hiring, an employer can be held directly liable for its conduct and liability can be imposed even when an employee’s acts were outside the scope of employment. It is therefore important for employers to become familiar with the circumstances in which claims for negligent hiring could arise and, more importantly, to learn ways to guard against such claims.

In 1990 Carey Dennis began the application process to become a sales agent for Mutual Life (now known as Clarica Life.) He underwent an extensive application process which involved a number of tests to determine his suitability as a sales agent.