Could your business be liable for the wrongful actions of your staff?

Last week the Supreme Court decided that Morrisons was liable for a physical assault by an employee on a customer.

5/6/2016 12:00:00 AM

Employment E-alert

The same day, the Supreme Court found the Ministry of Justice (MOJ) vicariously liable for an injury inflicted on an external contractor due to the negligence of a prisoner working in the prison’s kitchen.

These bring far-reaching implications for employers’ liability for unlawful acts by their employees while at work. They also highlight the need for businesses to keep adequate insurance cover, provide all necessary staff training and have internal policies prohibiting unlawful actions by their employees.

What is vicarious liability?

Vicarious liability means an employer is held responsible for the act or failure at work of their employee or worker. The key question is whether there is a close connection between the employee’s duties and their wrongful act. If there is, the employer will be vicariously liable.

A business can also be liable for the wrongful acts of non-employees working in its business if the courts decide imposing vicarious liability is just and reasonable.

Two recent Supreme Court cases have tested the scope of this liability, showing just how wide it stretches:

When does vicarious liability apply for employees’ acts?

The Morrisons case

An employee of Morrisons racially abused a customer, ordered the customer to leave the premises and then seriously assaulted him.

The Supreme Court decided Morrisons must compensate the customer for his injuries. It said the key factors in Morrisons’ liability for this employee’s actions were:

  • The function given to the employee by the business
  • The closeness of the connection between the employee’s role and his wrongful conduct.

Here, the employee acted in his assigned function to serve customers (although he did that in a way which was a gross abuse of his position). The assault was therefore sufficiently closely connected with his role for Morrisons to be liable.

How vicarious liability stretches to non-workers’ wrongs

The MOJ case

By contrast, this case concerned liability for the negligence of a worker who was not an employee. A catering manager at a prison was injured due to the negligence of a prisoner working in the prison kitchen and sued the MOJ for compensation.

The Supreme Court decided that the MOJ was vicariously liable for the prisoner’s negligence because:

  • The prison service selected the prisoners to work in the kitchen
  • The prisoners working in the kitchen were integrated into the prison’s operations
  • The prisoners’ activities directly benefited the prison service.

Therefore, since the prison service had put the worker where there was risk of him committing a negligent act, imposing liability on the MOJ was just and reasonable.

Guidance for businesses

These cases highlight the need for businesses to ensure that they have measures in place to limit the risk of their vicarious liability.

Businesses can do this by:

  • Undertaking a risk assessment for all workers in the business
  • Securing relevant insurance cover
  • Providing all necessary training (including health and safety training) to staff and workers including volunteers to reduce the risk of negligently caused injury
  • Adopting a zero tolerance approach to aggression or actions putting colleagues or customers at risk.

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