Corporate responsibility for industrial incidents
Corporate responsibility for industrial incidents

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Corporate responsibility for industrial incidents

2.4 Imposition of vicarious liability

The protection provided was further enhanced by the development of the principle that employers are liable for the negligent acts of their employees. The imposition of this form of vicarious liability is significant, as the employer may not be aware of the employee’s negligent act or omission, but will still be held legally responsible for the harm caused. In effect, this imposes a form of strict or no-fault liability on employers.

There are several moral and practical rationales for the imposition of vicarious liability in this context:

  • Employees are engaged in the activities on behalf of their employers, who stand to make a profit and so should take moral and legal responsibility for the consequences of these activities.
  • Negligent employees are unlikely to be financially able to meet the costs of compensation. Employers are in a better position to insure for the loss (often referred to as the ‘deep pocket’ justification). In the UK and in other developed countries public liability insurance is compulsory, ensuring that victims are more likely to receive compensation for their loss. The cost of insuring against liability can be incorporated in the costs of production and so be redistributed among consumers of the product or service.
  • The imposition of liability encourages good working practices and ensures that employers have a financial interest in encouraging health and safety in their working practices.

As vicarious liability is potentially onerous, its imposition has been well circumscribed by the courts. It applies only to employees who are employed under a contract of employment. This excludes independent contractors and – probably more significantly – it excludes liability for the acts of casual workers not employed under a contract of employment. In addition, proof that the employee was acting ‘in the course of employment’ is a vital element in attributing liability to the employer. This has been interpreted to include acts which although unauthorised are within the scope of the employee’s employment. So, for instance, a bus company will be vicariously liable for the physical harm caused when their employee bus driver crashes the bus while driving too fast, even if the bus company has imposed an express prohibition on speeding. The judicial view has traditionally been that the bus driver is undertaking the task that he or she was employed to do, even if they then carry it out in an unauthorised manner (Limpus v London General Omnibus Co [1862] Ex Ch). In recent years, this approach has been extended by the courts and employers have been held vicariously liable for the crimes committed by employees where they have a ‘close connection’ to the job undertaken by the employee (Lister v Hesley Hall Ltd [2001] UKHL 22). The Court of Appeal extended the approach in Lister in Mattis v Pollock (trading as Flamingos Nightclub) [2003] 1 WLR 2158. A nightclub owner was held vicariously liable for acts of violence by a doorman employee. The Court of Appeal held that a ‘broad’ approach was required in assessing whether the acts of an employee were sufficiently connected with the duties of his employment so as to justify imposing vicarious liability. A broad approach has also been adopted by employment tribunals to the issue of vicarious liability in cases of sexual and racial harassment in the workplace. As a consequence, employers have been found vicariously liable for the violent acts and racial and sexual abuse of employees committed while at work. You may find this difficult to justify, but arguably it serves to ensure that employers are careful to recruit employees who are trustworthy and that they have adequate systems of supervision and control in place.

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