It is well understood that Canadian employers may be vicariously liable for the actions of their employees when the employees are acting within the scope of their duties. But surely not if the employee acts against the instructions of the employer? Maybe so, according to a recent panel of the Alberta Court of Appeal.
The Alberta Court of Appeal came to a more unorthodox conclusion when it decided that an employer was liable for an employee’s bad behavior even though the employee’s behavior was directly contrary to express instructions. In Mustafi v. All-Pitch Roofing Ltd., a roofing company was on the hook for the negligence of an employee who drove a company truck in spite of explicit direction not to do so.
The employee of All-Pitch Roofing was given access to a company vehicle in the winter to keep warm and store his tools. The truck was parked at the worksite and the employee was given the keys. However, the employee was provided with express instructions not to drive the vehicle.
On Christmas Eve 2007, the employee was working on a residential roof in southwest Calgary. Contrary to the direction of his employer, the employee drove the company truck, resulting in an accident. The injured party, Xhevat Mustafi, sued the employee and All-Pitch, but only the liability of All-Pitch was contested. At trial, All-Pitch was found not to be liable for the actions of its employee. But the issue was reconsidered on appeal.
A majority of the Alberta Court of Appeal overturned the trial decision and determined that All-Pitch was liable for the employee’s negligence.
This finding turned on an analysis of section 187(2) of the Alberta Traffic Safety Act, which makes the owner of a vehicle liable if, at the time of the accident, the driver was in “possession” of the vehicle with the consent of the owner.
The court decided that, even though the employee did not have permission to drive the truck, he did have permission to use the truck to store supplies and keep warm. As All-Pitch had provided the employee with keys to the truck so that he could carry out his employment, the condition not to drive the vehicle was not determinative—it was unwritten and could be revoked at the employer’s convenience with one phone call.
Takeaway for employers
The law in Alberta is now that for the owner of a vehicle to be vicariously liable for the driver’s negligence, all that is required is that the owner have consented to the driver being in possession of the vehicle. The same may be true in other provinces where similar legislation exists, such as Ontario’s Highway Traffic Act, which makes the owner of a vehicle liable for loss resulting from negligent operation unless the vehicle was in the possession of another person without the consent of the owner, Manitoba’s Highway Traffic Act, and others.
In light of this finding, employers in Alberta—and across Canada—should review their policies on the use and “possession” of company vehicles. Even when an employee is instructed not to drive a vehicle, an employer may still be found to have consented to possession, opening employers up to liability from injured third parties.
This decision also reminds us of the importance of having driver use policies for those employees who drive company vehicles. Explicit driver-use policies, including any restrictions on the use of the vehicle, may help employers reduce the likelihood of being found vicariously liable for the actions of their employees. An employee’s written acknowledgment of any restrictions may not eliminate employer liability, but it may act to deter employees from engaging in the restricted behavior in the first place.