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Employers spend enormous amounts of time worrying about what happens when they fire an employee.

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Will the employee sue for wrongful dismissal? Will there be a human rights complaint? Will they retain one of the growing number of lawyers whose business model is built around suing employers?

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Those are legitimate concerns.

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But employers often overlook another, potentially far more serious risk.

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What happens if the employee hurts someone else?

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A company can spend decades building its reputation, customer relationships and goodwill. One employee can damage all three in a matter of days. Worse, in some circumstances, the employer can be held legally responsible for conduct it did not authorize, know about or condone.

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That is why one of the most important things an employer can do is also one of the most basic: properly vet its employees.

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And that obligation does not necessarily end when the employee is hired.

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In sensitive industries such as childcare, banking, financial services and healthcare, employers should ensure that employees continue to have the licences, qualifications and background necessary to perform their jobs.

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Too many do not.

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Consider childcare. An organization hires someone to supervise children, conducts the required screening and then never revisits the issue.

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That can be a serious mistake.

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Licences expire. Qualifications change. Employees can become subject to regulatory restrictions or criminal proceedings after they are hired. Circumstances that did not exist when someone joined the organization may arise years later.

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An employer cannot reasonably be expected to predict every act of future misconduct. But it can be expected to take reasonable precautions against foreseeable risks.

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The law recognizes the principle of vicarious liability, under which an employer can, in appropriate circumstances, be held responsible for wrongful conduct committed by an employee in the course of employment.

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The classic example is simple: A hotel valet damages a customer’s car while parking it. The employee was performing the very task the hotel hired them to perform. The hotel may therefore be responsible.

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But there is another risk employers should understand: negligent hiring.

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If an employer fails to take reasonable steps to screen an employee when there are obvious reasons to do so, and that employee subsequently harms a customer, client or member of the public, the employer may face significant exposure.

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The employer cannot simply say afterward, “We had no idea.”

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The obvious question will be: “Should you have known?”

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Imagine a summer camp hiring staff to supervise children without conducting appropriate background checks. If one of those employees later harms a child, the organization will have difficult questions to answer.