Most employees assume there's a line between their own lives and their employer's legal problems. They show up, follow instructions, deal with customers and try to do their jobs. When something goes wrong, it's natural to think the business will answer for it. The business signed the contract, after all. The employee was just carrying it out.
That assumption makes sense until a statement of claim arrives with the employee's name on it.
Canadian civil law doesn't generally treat an employer as a substitute for the person who actually committed a legal wrong. An employer may be responsible for an employee's conduct through vicarious liability, but that doesn't automatically extinguish the employee's own responsibility. Those are different questions. One asks whether the employer must answer for something done in the course of work. The other asks whether the individual personally breached a duty owed to the person who was harmed.
A damaged transformer made that distinction unusually clear. In London Drugs Ltd. v. Kuehne & Nagel International Ltd., two warehouse employees negligently damaged equipment belonging to a customer while doing exactly the work they were employed to do. The loss exceeded $33,000. The warehouse company's contract, however, limited liability to $40. The customer sued the company and the employees, hoping to recover more from the individuals than it could recover under the agreement.
The Supreme Court of Canada didn't say the employees were immune because they were on the job. It accepted that an employee performing contractual services can personally owe a duty of care in negligence. The employees nevertheless benefited from the contractual limitation in the particular circumstances, so their liability was also limited to $40. That protection depended on the agreement and the work being performed. It wasn't a general licence for employees to avoid responsibility.
It's worth thinking about what those employees must have made of the lawsuit. They hadn't negotiated the storage agreement or decided what the company would charge to handle the transformer. They were paid to move it. Yet the customer's effort to recover a commercial loss had placed their personal exposure directly in issue.
The same uncomfortable divide appears when the alleged wrong is deliberate rather than careless. In ADGA Systems International Ltd. v. Valcom Ltd., 1999 CanLII 1527 (ON CA), a business accused a competitor's director and senior employees of participating in a recruitment campaign that allegedly interfered with contractual and fiduciary obligations. The individuals argued that they had acted for their company, not for themselves. The Ontario Court of Appeal allowed the claims against them to proceed. It didn't decide at that stage that they had committed the alleged torts. It decided that acting in the company's interests wasn't, on its own, enough to dismiss the personal claims.
There are limits, of course. An employee isn't personally liable simply because their employer breached a contract, and being named in a lawsuit doesn't establish that anyone did anything wrong. The claimant still has to show a recognized basis for liability against that particular person, including the elements of the alleged tort and any applicable defences. Statutory protections, including workers' compensation rules in some injury cases, can also change whether a civil action may proceed. The context matters.
But an employee should be careful about assuming that an instruction from a manager settles the question. A direction to carry out work doesn't transform an individual's own negligent or intentionally wrongful conduct into someone else's act. Nor does incorporation create a protective wall around everyone who works inside the company.
There is another side to this that businesses sometimes overlook. If an employee is sued for something done at work, who pays for their lawyer? Is the person covered under the business's liability insurance? Will the employer fund a defence, or indemnify them if the claim succeeds? Those questions can have answers in policies, employment arrangements and applicable law, but there's no universal promise that the employer will pick up every expense. A business that assumes its insurance automatically protects every employee may discover the limitation only when everyone needs that protection.
It's tempting to regard all of this as a warning about personal risk, but I think it's also a question of how businesses exercise authority. A company asks people to make decisions on its behalf while controlling much of the environment in which those decisions are made. It chooses the instructions, equipment, contracts and insurance. The individual still performs the act that may give rise to a claim. That division between corporate control and personal responsibility isn't always neat, particularly for people who have very little say in the commercial arrangements surrounding their work.
We tend to speak about a lawsuit against a business as though it concerns one legal person with one set of interests. Sometimes it does. Sometimes the people who were simply trying to get through an ordinary workday find themselves defending their own conduct as well. That's a different kind of cost, and one that can be surprisingly easy for a business to overlook.