The doctrine of vicarious liability states that an employer is liable for the negligence (torts) and omissions of employees within the course of their employment. For an act to be considered within the course of employment it must either be authorised or be so connected with an authorised act that it can be considered a mode, though an improper mode, of performing it. Of course there are some things that an employee does at work, or during working hours which are not sufficiently connected to the duties and responsibilities of the employee to be considered negligent under this doctrine. As an example, if an employee on their to make a delivery stops to rob a bank, then courts would generally rule that the employee was ‘on a frolic of their own’. Employers should also understand that they may still be held liable if the employee wrong doing (being within their authorised scope of employment) occurs away from the workplace or outside normal working hours.
Let’s consider some other examples of potential vicarious liability.
- An employee of an accounting firm is negligent in performing work for a client.
- An employee defamed someone in a published report.
- A technician incorrectly services a critical piece of equipment which then fails and causes losses to the business.
- An employer can be liable for sexual harassment of one employee by another.
- An employer can be liable for discriminatory behaviour by an employee against other employees or customers.
- An interesting development most recently is liability claims being made against mobile phone manufactures when it has been proven that the phone contributed to a road accident.
Vicarious liability is of great concern to employers, particularly so if the business involves giving professional advice. A person can be vicariously liable for the negligence of another no matter how careful the person was in all relevant matters, such as choosing and supervising the other. An employer is vicariously liable for negligent acts or omissions by his employee in ‘the course of employment’. It does not matter whether the employer gave their permission for the employee to act, or not to act in the way that caused the damage.
The concept of vicarious liability does not necessarily let the employee off the hook for acts of negligence. The liability of the employer may be viewed by the courts as being in addition to the ‘primary’ liability of the employee. In other words, both are liable and the employer may be entitled to recover from the employee a contribution to any damages claims which the employer is liable to pay to a person injured or killed. However, this view is not always commonly held, and in some jurisdictions there is legislation that provides (in certain types of case) that only the employer is liable, not the employee. In some jurisdictions there are also statutory provisions that remove the right of the employer (in certain types of case) to recover contribution or an indemnity from the employee. Many argue about the justification for vicarious liability. Why should an employer be responsible for the negligent act of an employee? From a legal perspective it is justified because the employer benefits from the business being conducted, and therefore the employer should also bear the risk on the business.
Vicarious liability can be a murky area indeed and employers are often ruled responsible for actions they could not control. Take the case of Peterson v Royal Oak Hotel . A barman, under instructions of the head barman, refused to serve further drinks to a customer who was drunk. The customer threw an empty glass at the barman which broke. The barman threw the broken pieces at the customer as he was walking out the door. A piece of glass splintered off and struck and injured the customer. The court ruled that this action was during the course of the employment even though it was agreed that it was an improper mode of dealing with customers and was an expression of personal resentment by the barman. The barman’s employer was liable for the injury to the customer. Think about establishments who hire doorman or bouncers for security. What happens when in the course of removing a rowdy customer from the premises the customer is injured. Generally the establishment who hired the doorman will be liable if the injured customer seeks compensation.
It is critical that employers implement and maintain satisfactory standards and practices so that possible claims may be prevented or defended. These standards must be communicated from the top down via expressed company values and behaviour, culture, HR policies, training, systems and controls. To avoid vicarious liability, an employer must demonstrate either:
- That the employee was not negligent (this is the most common defence when an accident has occurred, for example an employees slips at work because another employee did not erect a “wet floor” sign), or;
- That the employee was acting in his own right rather than on the employer’s business. (This is the most common defence in discrimination cases).
The way courts test for vicarious liability is to focus on the connection between the nature of the employment and the negligent act. The courts will then decide whether it is just and reasonable to hold the employer vicariously liable.