When is an employer responsible for the actions of its employees?

Vicarious liability is a legal doctrine that holds one person responsible for the wrongful acts of another. In the workplace, this means that an employer can be held liable for an employee’s illegal acts, provided the wrongdoing was committed in the course of employment.

Since strict liability rules apply, the employer itself need not have done anything wrong or illegal to be found liable. What matters is that there is a sufficient connection between the employee’s wrongdoing and their job.

For example, if an employee makes discriminatory comments about a co-worker, the employer may be held vicariously liable for unlawful discrimination. If an employee operates heavy machinery under the influence of alcohol and causes injury to another worker, the employer could be held liable for the employee’s negligence.

Vicarious Liability Test

the The test for determining whether an employer can be held vicariously liable for an employee’s unlawful act has two parts. The test was last refined and clarified in April 2020 when the Supreme Court ruled on the cases of Barclays Bank plc against various plaintiffs [2020] and WM Morrison Supermarkets against various plaintiffs [2020].

The first part of the test deals with the nature of the relationship between the employer and the wrongdoer. If a genuine employment relationship is established, in which the wrongdoer acted within the scope of his activities, the employer may be held liable vicariously.

In practice, relationships sufficiently close to employment may also be subject to vicarious liability rules such as workers, agency workers and partnerships. When assessing employment/quasi-employment relationships, the five criteria of the “Christian Brothers” case (Catholic Child Welfare Society et al v Various Plaintiffs [2012]) provide useful guidance.

The second stage of the test is known as the “sufficient connection” test. The issue here is whether there was a sufficient nexus between the wrongful act and what the wrongdoer was authorized to do in the ordinary course of his or her employment for it to be fair to hold the employer liable. by others.

If the wrongful act is judged to be insufficiently close to what the wrongdoer was authorized to do, vicarious liability cannot be attached to the employer.

The sufficient connection test is often the point of contention in vicarious liability cases. Courts will consider a range of factors in the context of the specific facts of the case, for example, did the unlawful act take place at or near the workplace, or during working hours?

In 2016, in Mohamud v WM Morrison Supermarkets plcit was decided that Morrisons was liable for an assault by its employee on a customer, since the act of the employee – although it was a blatant abuse of position – been related to the company for which he was employed.

Compare this with Chell v Tarmac Cement and Lime Limited, where the Court of Appeal found that the employer was not vicariously liable for the actions of the employee, who caused serious harm to a third-party contractor by playing a prank. In this case, the court confirmed that employers would not be held liable when employees act improperly and beyond the normal scope of their employment.

The 2020 Supreme Court decision in WM Morrison Supermarkets plc against various plaintiffs, regarding an unlawful data breach by a rogue employeepprovided welcome clarity by stating that employers can only be held liable for the actions of employees if they are “closely related” to their duties at work, and not, for example, where the employee’s action did not not part of their “field of activity”.

Mitigate employers’ vicarious liability risk

Where vicarious liability may be attached to the employer, as a defence, the employer will have to demonstrate that it took all reasonable steps to attempt to prevent the unlawful act. This means being proactive in managing the risk of vicarious liability.

  • Have well-written corporate policies in place covering all relevant risk areas, such as health and safety, equality, diversity and discrimination, and conduct.

  • Be clear about the process for employees to report concerns to the employer and how to handle complaints legally. The repercussions for employees for violating company policy should also be clearly stated.

  • Finally, ensure your staff are aware of policies and procedures through regular training to improve awareness and understanding of expectations and standards, informing newcomers during onboarding and making the easily accessible policy documentation.

Anne Morris is founder and CEO of DavidsonMorris.

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