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Inappropriate Sexual Conduct at Social Work Events – Are Employers Liable?

Practice Areas: Workplace Investigations

This is the question that K.L. v. 1163957799 Quebec Inc., 2015 ONSC 2417 hopes to answer. In the summer of 2013 Calypso Theme Park (“Calypso”) hosted an employee social event with unlimited access to alcohol. Over the course of the event it is alleged that sexual harassment, sexual assault, forcible battery, and other tortious conduct took place between a 19 year old female and her 40 year old supervisor. The events that took place led to the 19 year old employee (“K.L.”) filing a claim in Ontario Superior Court for damages against Calypso Theme Park related to sexual harassment, sexual assault, assault, battery, false imprisonment and intentional and/or negligent infliction of mental suffering. The link provided above is an interim decision following Calypso’s request to strike the pleading on the ground that it discloses no reasonable cause of action.

For a claim to be struck, it must be plain and obvious that no reasonable cause of action exists – an historically difficult test for a party to establish. In the past employers have been found vicariously liable for the acts of employees – the leading case and test for vicarious liability was the Supreme Court’s decision in Bazley v. Curry, 1999 CanLII 692 (SCC). Chief Justice McLachlin set out a two part test:

  1. Do factually similar precedents establish, unambiguously, whether vicarious liability should be imposed or not?
  2. If Part 1 is inconclusive, are there broader public policy rationales to support strict liability?

Each of the precedents establishing vicarious liability in the first stage was found to be distinguishable from the events that took place at the employer’s theme park. The second part, regarding public policy considerations, essentially asks whether the actions have a sufficient nexus to the workplace and whether an allocation of liability on the employer is fair in the circumstances. In Bazley v. Curry Justice McLachlin explains “The enterprise and employment must not only provide the locale or the bare opportunity for the employee to commit his or her wrong, it must materially enhance the risk, in the sense of significantly contributing to it, before it is fair to hold the employer vicariously liable.” In this particular instance Justice Smith was not prepared to strike the claim and determined that the plaintiff’s action could move forward aside from the claim for sexual harassment (NOTE – sexual harassment is not a recognized tort in the Province of Ontario). Justice Smith determined the claim should be allowed to proceed based on the following:

  • A staff party is directly connected to an employer and, in fact, an employer derives loyalty and goodwill from hosting such events
  • Risk to K.L. was materially enhanced by hosting the party at an expansive water park where supervision would be inherently difficult or impossible
  • The size of the venue could easily lead to employees becoming isolated and vulnerable
  • Calypso permitted alcohol to be consumed without the monitoring of a bartender

At this stage liability has not been attributed to Calypso. We will be sure to keep employers up date as this case moves through the litigation process.

Hosting work events can be a valuable endeavour for employers. Events such as these can be an excellent team building exercise that helps to build a dedicated workforce. However, there are inherent risks associated with acting as host and employers should be particularly careful when supplying access to alcohol. As a starting point for any social event, read Susan Crawford’s Blog for tips on hosting holiday events. Also, click here for a list of lawyers at CCP that can assist with workplace investigations if allegations of misconduct arise.

Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.


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