vicarious liability
What is vicarious liability?
Who is an employee?
Was the tort committed in the course of the employment?
Why impose vicarious liability?
Vicarious liability is where a third party has a legal responsibility for the unlawful actions of another. The most usual example is where an employer is responsible for the actions of an employee, although it can exist in partnership cases or in the case of a parent and child. It is a form of strict liability. It imposes a duty on the employer without them being at fault. As employers are often insured against such claims, vicarious liability has become a practical tool to help compensate those making a claim.
The general rule is that an employee is employed under a contract of service, while an independent contractor is employed under a contract for services. This distinction is important, because an employer will not be liable for the torts of an independent contractor.
control test: the control test was devised in the case of Ferguson v John Dawson and Partners (contractors) Ltd (1976). It is based on the old fashioned concept of master and servant. The court considers the extent to which the employee was under the control of the employer in terms of how they did their work and the way in which it was done. However, this test is not suitable for modern employment patterns, because not all employees are under direct control of their employer.
business integration test: In Stevenson, Jordan and Harrison Ltd v MacDonald and Evans (1952), Lord Denning devised the integration test. He suggested that where the employee's work is carried out as an integral part of the business, a contract of employment would exist.
multiple test: As the business integration test proved to be inadequate, the multiple test was introduced in the case of Ready Mixed Concrete Ltd v Minister of Pensions and NI (1968). Here, it was held that three conditions must be fulfilled for a contract of service to exist: 1. The worker agrees for the payment of a wage to provide work or skill for the other person. 2. They agree to be under the other person's control, so that it makes the other the master. 3. Other terms of the contract are consistent with the contract being one of service. However, if the parties have stated in the contract that a person will be self-employed and the other terms of the contract reflect this, the contract will be regarded as one for services. This means that the worker is an independent contractor and the employer, generally, will not be liable for their actions.
business on their own account test: this approach was taken in Market Investigations Ltd v Minister of Social Security (1969), where the High Court suggested that the question to ask is whether the worker is performing the services as a person in business or on their own account. The court will consider whether the person uses their own premises and equipment, whether they hire their own helpers, the degree of financial risk they take and the degree of responsibility they have for investment and management. The court made it clear, though, that the test is not to be regarded as conclusive; there is no definitive test, because what is important in one case may not be in another.
the 'akin to employment' approach has been adopted by the courts for some time but was confirmed in the case of Cox v Ministry of Justice (2016): the catering manager at HM Prison Swansea was negligently injured by a prisoner carrying out paid work under supervision in the prison kitchen. He dropped a large bag of rice on her upper back. The Ministry of Justice was held to be vicariously liable for the injuries, as the prisoner's activity in unloading supplies was 'akin to employment', even though the relationship to the prison was not voluntary.
The employer is more likely to be in a position to compensate the claimant, as they will have insurance cover. However, any financial loss is spread across society through increased insurance premiums and/or higher prices for the consumer.
Employers benefit from the employees' work, so they must take responsibility for any harm caused.
Vicarious liability is an inducement to the employer to promote high standards of behavior or safety.
As the employee is usually under the control of the employer, this may encourage the employer to maintain standards of good practice and to take care when recruiting employees.
An employer should supervise employees closely, however; most wrongful acts are an isolated occurrence. Generally, the doctrine is seen as a motivation to reduce workplace incidents.
The Salmond test
a wrongful act authorized by the employer
An employer is clearly liable when they instruct the employee to act wrongfully, but they can also be liable if the employee has implied authority to commit the tort. However, if violence is inflicted as part of a private disagreement, it is not normally in the course of employment, as Warren v Henlys Ltd (1948) demonstrates.
a wrongful and unauthorized mode of doing some act authorized by the employer
This situation arises where the employee is doing their job but they: ignore an express instruction not to do something, act carelessly (negligently), use unauthorized help (the decisions in cases are inconsistent and seem to be based on the question of whether the employer derives a benefit from the authorized help), or breach a statutory duty.
If the employee acts outside the course of employment, then the employer cannot be vicariously liable. An employee acts outside of the course of employment in the following circumstances: 1. carrying out an act not within the scope of the employee's work; that is, the employee does something that is not connected with what they are employed to do. 2. diverting from the proper work on a 'frolic' - there are contrasting cases 3. giving unauthorized lifts - again, there are contrasting cases even though the facts are very similar. 4. acting in excess of the proper boundaries of the work.
The Salmond Test has also been used where employees have been travelling to or from work. Usually, such employees are not within the course of employment, unless they are travelling specifically on the employee's business.
The close connection test
This was developed by the courts to manage cases where it was alleged that there had been intentional wrongdoing. Some forms of intentional wrongdoing such as dishonesty and theft had been dealt with using the Salmond test.
The case of Lister v Hesley Hall Ltd (2001) overruled a line of cases where liability had been refused on the basis that the wrongdoing committed by the employee was not a way of carrying out their employment duties. The outcome of the Lister case was that his wrongdoings were so closely connected with his employment that it would be fair and just to hold the defendants vicariously liable.
It would appear that, following Lister, an employer can do very little to avoid liability for the intentional wrongdoings of their employee. This does not mean that the claimant will always win - take N v Chief Constable of Merseyside (2006) - a police officer assaulted the female claimant while on duty. this conduct was not in the course of employment and neither was there a close connection with his employment. His uniform only gave him the opportunity to commit the wrongdoing.