Vicarious Liability of Employers – Employment Law

Vicarious liability in employment law arises in certain circumstances which will make an employer liable for the actions on an employee.

Employers and employees have a special relationship when it comes to liability in negligence claims.

An employer has a duty of care to protect their employees and workers from the actions of others employed that may cause harm.

If an employee caused an injury to another employee or member of the public, the employer may be held liable.

If someone is injured as a result of a negligent act by an employee within the scope of their employment, the plaintiff may take legal action against the company on the basis they are vicariously liable for its worker’s actions.

It is important to know your rights and the case law surrounding this issue as it can have costly consequences.

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When can employers be held vicariously liable for their employees?

The most common example of harm which would generally hold the employer vicariously liable is physical injuries suffered as a result of negligence of an employee.

In order to determine vicarious liability, it will need to be determined whether the worker is an employee or contractor.

The below three elements will need to be satisfied to establish vicarious liability:

1. The wrongdoer is an employee of the employer;
2. The employee committed a tort; and
3. The tort was committed in the course of employment

Vicarious Liability – Employee

If you are performing paid work, or are engaging someone to perform paid work, it is important to be clear about whether the arrangement is one of employer and employee, or of principal and contractor.

An employee is directly employed by their employer. Other characteristics established in Hollis v Vabu Pty Ltd [2001] HCA 44 which may demonstrate an employee include:

• The employer determines the hours you work.
• The employer provides most of the equipment needed to work.
• The employer pays your tax/superannuation.
• The worker wears a uniform.
• The employer controls the worker’s holiday scheme.

Generally, employers are not liable for the actions of engaged independent contractors, however they may be in certain circumstances as cases have shown.

In the case Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19, a worker was held to be a contractor as he supplied his own tools, worked for other businesses, provided invoices, and maintained his own insurance and worker’s compensation.

Vicarious Liability – The Course of Employment

For an employer is be held vicariously liable for the action of an employee, the actions which caused the injury must have been within the course of their employment.

CJ Gleeson stated in the case of New South Wales v Lepore [2003] HCA 4 that:

It is clear that if the wrongful act of an employee has been authorised by the employer, the employer will be liable. The difficulty relates to unauthorised acts.

The 1834 English case of Joel v Morison set a benchmark for vicarious liability of employers, stating that an employer will not be liable for their employee’s actions while “on a frolic of his own”.

This determination is a question of fact and will depend on the individual circumstances of each case.

The courts have generally considered what is in the course of employment quite broadly as the actions of an employer may occur outside their place of work in work-related contexts or functions.

The below cases show examples of what may or may not be considered actions within the course of employment:

Century Insurance Co Ltd v Northern Ireland Road Transport Board [1942] UKHL 2

This case involves a man who was employed to drive petrol tanks.

During one petrol delivery, the employee lit a cigarette and caused a fire causing damage to the customer’s property.

The court found that although the actions of the employee was reckless, it was done within the course of his employment.

Deatons Pty Ltd v Flew (1949) 79 CLR 370

A barmaid employed by Deatons Pty Ltd threw a glass at Mr Flew’s head.

Initially, Flew attempted to sue her employer, however the court held they were not vicariously liable for her actions.

This was found due to her actions having no connection to the course of her employment and was done for her own purposes.

Defences to Vicarious Liability

A court will generally assess whether an employer has taken ‘reasonable steps’ to protect their employees and others from potential injuries or harm.

This could include providing adequate training upon commencement for new workers about appropriate workplace behaviour and avoiding safety hazards.

What is considered reasonable by the courts will be determined by the specific circumstances of each case and may amount to a defence to a claim based on vicarious liability.

It is important for employers, executives, and employees to know that vicarious liability may extend to employers.

Overall, if you’re an employer or employee and would like to know more about your rights and advice on steps to take in order to prevent such a claim, please use our website today to find a suitable employment lawyer on the Sunshine Coast.

Be referred to the best employment lawyers on the Sunshine Coast for vicarious liability of employers