Vicarious Liability – Implications for Employers

All your Employment Law Questions AnsweredThe doctrine of vicarious liability is a well-established principle which basically provides that where an employee commits a wrong in the course of their employment, not only may that employee be directly liable for their action but also their employer may be held vicariously liable for that employee’s wrongdoing.

The most common example is where an employee is guilty of negligence which results in injury to a third party such as a customer. That third party may take legal action against the employer in such circumstances. The reason behind this was outlined by in Majrowski -v- Guy’s and St Thomas’ NHS Trust [2006] U.K.H.L. 34, [2006] I.R.L.R. 695 as follows:

  • The employer is in control of the employee’s actions
  • The employee would not have been in a position to commit the wrongdoing but for the fact that s/he was carrying out the employer’s activities
  • The employer is usually in a better position to absorb the financial loss of a civil claim (e.g. liability insurance, ability to increase prices to absorb loss) 
  • Vicarious liability ensures that employers promote good practice and train employees properly in terms of working practices and health and safety.
  1.  What is Deemed to be the Course of Employment?

An employer will only be liable for an employee’s wrongdoings where it can be established that those wrongdoings occurred during the course of employment. The courts have utilised a number of tests for this and have always shown a willingness to stretch this concept to cover a wide variety of cases in order to attach liability to the employer.

a)    The Implied Authority Test

Under this test, acts carried out in ‘the course of employment’ can be best defined as acts carried out for the employer with the employer’s express authority or implied delegated authority.

For example, in Poland –v- Parr & Sons [1927] 1 KB 236 an employer was held vicariously liable for their employee hitting a child. The employee had believed that the child was stealing the employer’s property and while the employer may not expressly authorise hitting a child the Court held that the employee had implied delegated authority to act in defence of his employer’s property in emergency circumstances.

b)    The Course of Employment Test

The course of employment test was outlined in Smith –v- Stages [1989] 1 All ER 833 as “an employee [who] is acting in the course of his employment when he is doing what he is employed to do… or anything which is reasonably incidental to his employment.”

For example, in Boyle –v- Ferguson [1911] 2 IR 489 an employer was held liable when their car salesman employee crashed a car late on a Saturday evening outside of working hours as the accident still occurred in the course of employment given that the employer was paying for the petrol and the employee was trying to make a sale to a passenger in the vehicle. This matter often arises in employee road accident scenarios whilst travelling to or from work and the following rules apply when considering if time spent travelling will be considered time in employment

  • An employee travelling from his home to his regular place of work, even if the transport is provided by the employer, is not acting in the course of his employment. However, if he is contractually obliged to use the employer’s transport he will normally be regarded as acting in the course of his employment.
  • Travelling in the employer’s time between workplaces or in the course of a peripatetic (travelling) occupation will be in the course of employment.
  • Receipt of wages for time in a vehicle (excluding travelling allowance) will indicate that the employee is acting in the course of his employment.
  •  An employee travelling in the employer’s time from his home to a workplace other than his regular workplace or in the course of a peripatetic occupation or to the scene of an emergency will be acting in the course of his employment.
  •  A deviation from or interruption of a journey undertaken in the course of employment (unless the deviation/interruption is merely incidental to the journey) will for the time being take the employee out of the course of his employment.

c)    Unauthorised Modes of Doing Authorised Acts

This test suggests that an employer may be found liable where an employee commits a wrongful act authorised by the employer and/or where the employee carries out an act authorised by the employer but does so in a wrongful or unauthorised way.

For example, in Century Insurance –v- N.I Road Transport Board [1943] 1 All ER 491 an employer was found liable for an explosion when a careless petrol lorry driver was smoking whilst transferring petrol from a tanker to a tank. The employee was carrying out an authorised task (transferring petrol) in an unauthorised manner (whilst smoking).

d)    Intentional Wrongs and the Sufficiency of Connection Test

It has been argued that the unauthorised modes test above does not sufficiently account for circumstances where an employee commits an intentional wrong against an employer’s instruction, implied or otherwise. This was recognised in Health Board –v- B.C. [1994] ELR 27 where it was held that an employer could not be found vicariously liable for a sexual assault carried out by one employee against another as such an act could not reasonably be considered to fall within the course of one’s employment.

Thus in Bazley –v- Curry [1999] 2 SCR 534 the “sufficiency of connection” test was introduced. This case concerned an employee in a residential care facilities for troubled children who was required to act in the manner of a parent to the child they cared for. One employee subsequently sexually abused a child. The court held that the employer was liable as there was a sufficient connection between the employer’s creation of the risk (by putting the employee in their position of lone parental supervision) and the actual wrong committed by the employee (the abuse). It is the degree of power, control and lone supervision that separates this case from ones like Health Board –v- B.C. mentioned above. The Irish High Court in Delahunty –v- S.E Health Board [2003] 4 IR 361 applied the sufficiency of connection test and held that an industrial school was not liable in circumstances where an employee had sexually assaulted a young boy who had visited a friend at that school as the employee had no control over this boy as he was a visitor.

The far-reaching impact of the sufficiency of connection test can be seen from the case of In Mattis -v- Flamingos Nightclub [2003] 1 W.L.R. 2158 where a nightclub owner was held vicariously liable where a doorman had stabbed a customer. The doorman had left his post after suffering a blow from a customer and went to his flat to pick up a knife. He then returned to the and stabbed the customer, thereby causing paraplegia. The Court applied the sufficiency of connection test and found the employer vicariously liable holding that the doorman’s acts were sufficiently connected with the duties of his employment as he had been trained to act aggressively.

  1. Vicarious Liability & Bullying, Harassment and Stress in the Workplace

In many cases, an employer will be completely unaware that any form of bullying is being carried out among their employees, particularly now that employees can bully colleagues through various technological means such as text messaging and social network sites. However, similar to civil wrongs outlined above, employers can also be held vicariously liable for bullying and harassment carried out by its employees during the course of their employment.

Section 15 of the Employment Equality Act 1998, which is entitled “Vicarious Liability etc” provides that “anything done by a person in the course of his or her employment shall … be treated for the purposes of this Act as done also by that person’s employer, whether or not it was done with the employer’s knowledge or approval.” Accordingly, if an employee bullies a colleague on any one of the nine grounds of discrimination then the employer may be found vicariously liable.

A similar provision is outlined in UK equality legislation. This UK rule was considered in the Majrowski case, referenced above, where a homosexual employee alleged that he was bullied, harassed by his manager through excessive criticism, abusive conduct and the setting of unreasonable work targets. The employer investigated the matter and found the complaint to be substantiated and the manager in question resigned. The employee claimed that the employer was vicariously liable for the homophobic abuse as the manager was at all times acting in the course of her employment. The court held that vicarious liability could arise in a situation where an employee had discriminated against a colleague.

This is important as previously it was considered that an employer could only be held vicariously liable where an employee had committed a civil wrong such as negligence whereas the court here held that it also applies to statutory wrongs, such as the nine discriminatory grounds outlined in equality legislation. As such, the Health Board was found liable vicariously for the manager’s actions in breaching the statutory obligations in respect of bullying and harassment. It is very likely that the approach taken in Majrowski would be applied in Ireland. As outlined above, the Employment Equality Act 1998 expressly provides for employer vicarious liability for the bullying and harassing conduct of its employees.

In Ireland, such cases are normally taken by aggrieved employees to the Equality Tribunal and can also lead to claims of constructive dismissal in the Employment Appeals Tribunal. The Majrowski case, however, presents the very real option for an employee to seek more substantial redress in the civil courts and this could really hit an employer’s pocket hard as the cost of defending a case in the civil courts and the potential damages that may be awarded are far greater than those of a tribunal.

For example, the House of Lords applied the Majrowski principle in Green –v- DB Group Services (UK) Limited [2006] E.W.H.C. 1898, [2006] I.R.L.R. 764 and found an ex-employer vicariously liable for the persistent bullying of a former employee which had led to two nervous breakdowns and awarded that employee a massive £800,000 in damages.

Another area in which such a vicarious liability approach could be adopted in would be health and safety at work, particularly as the Safety, Health and Welfare at Work Act 2005 imposes a duty upon employees not to act in a manner that undermines the safety, health or welfare of their fellow employees.

2 Comments on “Vicarious Liability – Implications for Employers”

  1. […] to our posting last week on Vicarious Liability and the Implications for Employers, it was interesting to note that in yesterdays Irish Times it highlighted a recent case where a […]

  2. […] the phone, and where possible they should still pull in to answer or make any calls. The issue of vicarious liability will be a major concern for employers and they should be seen to do everything they can to show that […]

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