In many cases, liability extends across both employee and employer. Employers are vicariously liable for the torts of their employees provided the employee is acting within the scope of his or her authority and performing employment duties.
It is not generally a valid defence for an employer that the employee was not complying with directions. Employers are also vicariously liable for the unlawful discriminatory conduct of an employee, especially a manager. Employers may be ordered to pay compensation to an employee who is discriminated against by a manager, or to take steps to address discrimination in the workplace, such as by providing training or adopting policies.
It is a valid defence for the employer to show that it has taken steps to ensure that unlawful conduct does not occur. If you require legal advice in relation to an employment matter or any other legal matter please contact Go To Court Lawyers. Criminal Law. Civil Law. Commercial Leases in Queensland. Neighbourhood Disputes Qld. Family Law. Drink Driving. Traffic Law.
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Civil Law New South Wales. Civil Law Northern Territory. See all Civil Law Northern Territory. Civil Law Queensland. See all Civil Law Queensland. Civil Law South Australia. S had obtained the payroll data in his role as a senior auditor and had copied it to a personal USB stick before leaking it. Both the High Court and the Court of Appeal found that Morrisons was vicariously liable for S's wrongdoing because there was a sufficiently close connection between what he was tasked to do by his employer and his unauthorised disclosures.
S's motive — deliberately to harm his employer — was held to be irrelevant. The Supreme Court rejected these findings and found in Morrisons' favour. Although S could not have disclosed the data if he had not been given the task of compiling it, that was not enough to establish vicarious liability. This case could be distinguished from others where an employee had acted wrongfully but in so doing had been engaged in furthering his employer's business, however misguidedly.
In this case S had essentially been engaged on "a frolic of his own", namely a personal vendetta. His conduct was not so closely connected with the acts that he was authorised to do that his leaking of the data was done while acting in the ordinary course of his employment. An important point to note is that, although Morrisons was not on the facts liable for S's actions, the Supreme Court took the view that an employer can in principle be vicariously liable for breaches of the DPA by an employee even if the employee is a data controller in their own right as S was.
Barclays Bank contracted with an independent medical practitioner, B, to carry out medical examinations of prospective employees. It was alleged that B committed a number of assaults during these private and unchaperoned examinations. Following B's death, a group of affected individuals sought damages from Barclays, claiming that it was vicariously liable for B's actions. The lower courts found that the relationship between Barclays and B was one akin to employment and that Barclays was vicariously liable for B's actions.
The Supreme Court, however, has now overturned this decision. Although it recognised that it was appropriate to consider a number of factors in deciding whether a relationship "akin" to employment existed, those only came into play where there was doubt as to whether the wrongdoer was carrying on their own independent business. In this case there was no such doubt. Given that, for example, B saw other patients apart from those referred by Barclays, was not paid a retainer and could refuse to accept a patient referred by Barclays, he was an independent contractor and not in a role akin to employment.
Barclays could not, therefore, be liable for B's wrongful actions. For employers concerned about the increasing risk of being found vicariously liable for the actions of employees or quasi-employees, these judgments may provide some comfort. However, there is no room for complacency. In particular, where employers do not have formal contracts of employment with their workers, they should consider whether their working arrangements could be found by the courts to be "akin" to employment.
Relevant factors include:. Given that many employees are now working from home due to the global COVID pandemic, the potential for wrongdoing may be increased due, for example, to the lack of supervision, inadequate equipment or no longer working in close proximity to others.
For more information about any of the issues raised in this briefing or advice on how to reduce your risk, please get in touch with your usual Ashurst contact or anyone named below. The court concluded that the risk of the theft arising from the access permitted and the appearance of lawfulness by Schenker demonstrated a sufficiently close link between the theft and the lawful business the employee was about on behalf of Schenker.
In addition, the court found that a finding of vicarious liability should follow as a policy consideration, if regard is had to the following:. After concluding that Schenker was vicariously liable to Fujitsu for the conduct of its employee, the court then turned to consider whether the written agreement between the parties excluded liability.
The court emphasised that limitations to liability should be strictly interpreted and that agreements should not be allowed to restrict liability, especially if they were to arise outside of the contract, unless expressly provided for.
The court found that the employee was not executing the agreement between the parties when he stole the goods. The exemption clause relied on by Schenker related to damages arising from breach of contract which did not apply in these circumstances, where the theft was an act outside the performance of the contract between Schenker and Fujitsu. The court found that a defendant cannot rely on an exemption clause in circumstances where the contract was not being executed, unless the clear intention of the parties was to such effect , and considered the provisions of the agreement to determine whether this was the case.
The court's interpretation of the relevant clauses of the agreement between the parties was that it envisaged loss or damage which had its genesis in the provision of services by Schenker to Fujitsu and that the loss in this case arose independent from the performance by the employee pursuant to the contract.
The court concluded that the clear wording of the agreement showed that the parties did not contemplate that the agreement would encompass a delictual claim, based on theft, as was the case in these circumstances. Had Schenker intended to include such claims in the agreement, it would have done so and its failure to do so indicates a contrary intention. It was therefore found that Schenker's liability for Fujitsu's claim for damages was not excluded by the exclusion clauses of the commercial agreement between the parties.
Judgment was granted in favour of Fujitsu against Schenker for payment of the amount claimed, including interest, in the amount of USD This case demonstrates the significant impact an employee's wrongful and intentional conduct may have on an employer.
The test for vicarious liability in deviation cases is such that it might be difficult to demonstrate that there is an insufficient link between the conduct and the business of the employer, particularly when the conduct amounts to theft. The terms of commercial agreements are therefore key to the protection of employers from vicarious liability.
The terms of the commercial agreements, and specifically exemption from liability clauses concluded by employers, should accordingly be carefully drafted to cater for the risk of vicarious liability as comprehensively as possible and should not only be limited to the execution of the agreement itself.
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