Liability for discrimination by recruiter (Toughest HR Question)

When human rights claims are filed, could employer have vicarious liability?

Colin Gibson
Question: Can an employer be held responsible for the actions of a recruitment agency that discriminates against job candidates without the employer’s knowledge?

Answer: Every jurisdiction in Canada has human rights legislation that prohibits employment-related discrimination on a number of protected grounds, such as sex, race, age, physical disability, mental disability and religion. These statutory protections apply not only to an employer’s existing employees, but also to job applicants. If a candidate applies for a position and doesn’t get it, the employer must ensure its decision was not connected to a protected ground, unless the refusal to hire was based on a bona fide occupational requirement.

Human rights tribunals have statutory authority to grant a variety of remedies if an employer is found to have failed or refused to hire a candidate on a protected ground, which can include lost wages and expenses, damages for injury to dignity, feelings or self-respect, and even an order that the employer provide the individual with the job she was improperly denied.

Where an employment-related human rights claim is filed, the respondents will often include the employer, as well as the management representatives or other employees who are alleged to have engaged in the discriminatory acts. Under the principles of the vicarious liability, an employer will be held responsible for the discriminatory actions of its employees, if those actions occurred in the course of employment.

An example is the Ontario decision in Halliday v. Van Toen Innovations Incorporated. The complainant was a recovering drug addict who had been clean and sober for nearly a year when he began working for the employer. The employment relationship deteriorated when his supervisor found out about his past and began to refer to him as a “crackhead,” both directly and in emails to other employees. Following these and a number of other incidents, the employee resigned and filed a human rights complaint. 
The Human Rights Tribunal of Ontario found the supervisor had discriminated against the employee on the basis of a disability, and that the employer was also vicariously liable for the discrimination. The employer and supervisor were held jointly and severally liable to pay the complainant $25,000 for the breach of his inherent right to be free of discrimination with respect to employment and to be free from reprisal, and for injury to his dignity, feelings and self-respect.

Independent contractors
The analysis becomes more complicated where the discriminatory acts were not the acts of an employee, but of an independent contractor engaged by the employer.

A good example is the situation where an employer retains an independent recruitment or search firm, and that firm is later alleged to have engaged in discrimination in the search process. 

In these circumstances, the employer will be held responsible if the evidence shows the search firm acted in a discriminatory manner on the employer’s instructions. 

But even if the employer was unaware of the search firm’s discriminatory acts, the employer may still be liable if the firm was acting as the employer’s agent when it engaged in the unlawful discrimination. 

For example, if an employer hires a search firm to review and screen job applications and provide a short list of candidates, the employer may be held liable if the search firm screens out individuals on the basis of their race or gender.

To avoid unexpected liability in these circumstances, employers should ensure the contracts with recruitment or search agencies clearly outline the rights and responsibilities of each party. 

For example, the contract should list the specific services the search firm is being retained to provide, and should include language requiring the search firm to provide such services in compliance with applicable laws, including but not limited to relevant human rights legislation. 

The contract should also require the search firm to indemnify the employer if the employer is ordered to pay damages, expenses or other amounts to a third party because of a breach by the search firm of its legal obligations.

For more information see:
• Halliday v. Van Toen Innovations Incorporated, 2013 CarswellOnt 11591 (Ont. Human Rights Trib.).

Colin G.M. Gibson is a partner with Harris and Company in Vancouver. He can be reached at (604) 891-2212 or [email protected]

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