Vicarious liability (responsibility of an employer for an employee’s actions) has been a concept many employers grapple with on a far too regular basis. A situation involving a drunken employee urinating on a colleague’s face begged the question of employer responsibility.
The ever-changing principles of this concept have employers concerned at every company function, even the annual Christmas party (we recently explored this in our article on (Staff Christmas parties)
ON 18 March 2022 the Queensland Supreme Court of Appeal defined a unique situation as bearing these principles. The court overturned the decision of the trial judge at the Supreme Court in Schokman v CCIG Investments Pty Ltd [2022] QCA 38.
Mr. Schokman brought an action against his employer on two grounds;
- Breach of duty of care of the employer.
- Vicarious liability for a tort committed by another employee.
These grounds were rejected by the trial judge.
THE FACTS
Mr. Schokman and his colleague Mr. Hewett worked for the same employer at Daydream Island operated by CCIG Investments Pty Ltd. They shared accommodation on-site provided by the employer. In the early hours of 07 November 2016, Mr. Schokman was asleep when he received a rude awakening, quite literally, from Mr. Hewett urinating on his face. Mr. Hewett was intoxicated and had been drinking at the employee bar, he explained he was not conscious of his actions.
In his appeal, Mr. Schokman withdrew the argument that the respondent (employer) breached its duty of care. The appeal remained on the grounds of vicarious liability.
The employer made arguments that the incident was far too remote, and it was unreasonable to be held vicariously liable for the drunken actions of the employee. Although the employer pleaded this successfully at the trial, the Court of Appeal found that the requirement to live in the shared accommodation at the facilities provided placed a degree of liability on the employer to ensure safety and security for employees.
The court found the provision that the employees reside in the staff accommodation on the island to be significant. This places him in the position of an employee and not a stranger. With Mr. Hewett occupying a specific room, he was required to ensure his conduct did not adversely affect the health and safety of other employees. As this was a requirement under his employment contract it created a direct connection between his employment and his actions.
Accordingly, the Appeal Court found that the employer should have been held vicariously liable for the actions of Mr. Hewett.
THE TESTS CONSIDERED
The court considered the principles of Bugge v Brown as being the most closely resembling case.
That case relied on prior authorities to determine vicarious liability will not exist where;
- The employee did not assume to act within the scope of his employment (Hutchins v London County Council; Highley’s Case; Limpus’s Case) or;
- If his actions were so remote from his duty as to be altogether outside and unconnected with his employment (Barnes v Nunnery Colliery Co; Black v Christchurch Finance Co; Harding’s Case; Weighill’s Case)
IDENTIFYING WHERE AN EMPLOYER MAY BE VICARIOUSLY LIABLE
For further clarification, vicarious liability is where one party (the employer), is held responsible for the actions of another (the employee). The court established that although the actions of Mr. Hewett were unintentional, they were not involuntary, this definition means the degree of negligence and duty of care owed could not be discharged. Ultimately, an employer would still be liable for a drunken employee’s conduct during the course of employment.
Had the employer not required employees to live in the provided accommodation they would likely not be found to be vicariously liable.
Alternatively, if these actions occurred outside the prescribed living spaces given by the employer and not been encompassed in the employment contract, the employee would have been defined by the law as a ‘stranger to his employer’ (Turberville v Stampe). When the actions are accepted as outside the relationship with the employer, there may not be a finding of vicarious liability.
5 THINGS TO CONSIDER
- Employers may be held liable for certain conduct that is expressed in the employment contract.
- Vicarious liability will be extended to the employer where they have created a reach outside the scope of employment.
- The course of employment extends to acts that were directed by the employer whether committed in an authorised or unauthorised manner.
- An employer may be liable for unauthorised acts if they are found to be connected with the employment. i.e. In Schokman, living at the facility was a requirement of employment and hence implied responsibility on the employer for the safety of the employees.
- Employers should ensure (to the greatest extent possible) the employment agreement does not extend beyond the necessary parameters of the position.
A mix of contract reviews, policy reviews, constant training and frequent communication to employees regarding acceptable behaviour will have to be explored for all Human Resources and People and Culture teams. In particular, when employees are required to work with shared accommodation in employer sanctioned and even encouraged events, activity and work.
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Written By
Director
NB Lawyers – Lawyers for Employers
Jonathan Mamaril leads a team of handpicked experts in the areas of employment law and commercial law who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem mitigate risk and liability. With a core value of helping first and providing practical advice, Jonathan is a sought after advisor to a number of Employers and as a speaker for forums and seminars where his expertise is invaluable as a leader in this area as a lawyer for employers.
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