What is vicarious liability and what does it mean for employers?

What does vicarious liability mean?

Vicarious liability (sometimes known as imputed liability) is a legal term where employers can be held vicariously liable for the wrongful actions of their employees if this act took place in the course of employment. Read more to find out the details of when vicarious liability occurs and how you can mitigate against the risks.

What is vicarious liability vs full liability and strict liability?

Full liability

The difference between full and vicarious liability is that under full liability a person is held solely responsible for their actions that cause harm or damage. But a company can be held fully liable for the act of an employee expressly authorised by the employer, e.g. if an incident is due to the employer ignoring risks, failing to implement proper procedures, or encouraging wrongful acts committed by employees.

Strict liability

In a normal personal injury claim, the claimant often has to prove that the perpetrator has acted in a negligent or inappropriate way. But with strict liability it's required that the person who committed the wrongful act is held accountable for damages regardless of whether they were negligent or acted intentionally. For example, a driver who exceeds the speed limit unintentionally is still accountable.

Vicarious liability

Vicarious liability is a type of strict liability - a legal doctrine that says someone who has a superior legal relationship is expected to answer for individuals under their control. With the employer-employee relationship under vicarious liability rules, employers can be held liable for their employees' actions even if employees act without their knowledge or approval. Further information about this can be found in key case law.

Discriminatory actions by employees

What does "in the course of employment" mean?

When considering if the discriminatory act took place “in the course of employment”, this is not limited to situations where the employee performs an act they are required to do as part of their job. The context of the situation will be considered by the relevant court or employment tribunal and factors they will consider include:

• whether the act took place at work or outside of work;
  
• if it took place outside of work, was there a sufficient connection to work;
• whether it occurred during working hours or;
• whether the employee involved wearing a work uniform at the time. 

These points will be considered whether the conduct is in a physical work environment or a virtual one, for example social media. 

Other points of consideration, when deciding if a post on a personal social media account will be “in the course of employment”, include the degree to which the account was used for work related purposes; if the post was circulated to work colleagues; if the post referred to the employer or any employee and if the employer’s equipment was used. See key case law for more information about discriminatory actions by employees.

Would an employer be liable for all wrongful acts of its employees?

Under discrimination legislation, discriminatory acts undertaken by an employee in the course of their employment are treated as having been undertaken by the employer, even where they took place without the employer’s knowledge or approval. However, the employer will not be liable for discrimination if they can show that they took such steps as were reasonably practicable to prevent the employee from undertaking the discriminatory act. This is known as ‘the statutory defence’.

To establish this defence, the employer will have to show that:

• they have a comprehensive equal opportunities policy in place,
• all employees and managers have received training on this policy. The Employment Appeals Tribunal recently held that it is important that this training is fresh in employees’ minds and is not ‘stale’. 
• it has taken the appropriate action when acts of discrimination have occurred. 

Each of the above elements are essential to establishing the employer’s defence. Many employers find that they fall at the last hurdle as they have put training and policies in place, but in practice managers do not handle situations appropriately when they arise. It is therefore essential to train managers so that they understand the crucial role they play in bringing the equal opportunities policy to life within the business.

Vicarious liability for non-discriminatory acts of employees

An employer is vicariously liable for acts of violence or abuse committed by its employees or agents if they are carried out “in the course of employment” and action could be taken in civil courts. Such acts may involve an assault by an employee on an individual for example. 

Vicarious liability will not arise in respect of acts by truly independent contractors. In a Supreme Court case, it was found that a company should not be held liable for sexual assaults allegedly committed by a doctor because they had been engaged as an independent contractor to carry out medical assessments and examinations on their behalf. 

In these cases of vicarious liability there is a clear distinction between employment (and relationships akin to employment) and independent contractors, where they are responsible for their own wrongful acts. 

What can an employer do to protect themselves?

The risk of a claim being made can be reduced by ensuring that employees are carefully recruited, properly trained and subject to appropriate controls so to minimise the likelihood of any wrongdoing. Businesses should also review their equal opportunities and harassment training to ensure that it is relevant and applied in practice. This should also be regularly refreshed. 

Companies should also remind employees of the acceptable ways of working and that any physical or verbal aggression or harassment will not be tolerated and may lead to severe disciplinary sanctions.

Employment law and HR services from Marsh Commercial*

With lots of changes effecting employment law, it’s important to remain ahead, keep your documentation up to date and seek specific advice as to how the changes impact your business.

Learn more about employment law and HR services or get in touch to speak to an expert.

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