Employers primary liability and vicarious liability

Question 1

What is employers primary liability?

Answer 1

this is the law of negligence applied to the employee/employer relationship. Common law has long recognised the need to impose a duty of care on employers to take reasonable care for the safety of their employees.

Question 2

What is vicarious liability?

Answer 2

This is where one party is held liable for the torts of another and is most commonly exercised in employee/employer relationships.

There are three parties involved, the victim who suffered harm, the employee that caused the harm by committing a tort, and the employer who might be vicariously liable for the harm caused by its employee.

Question 3

What does it mean that an employers duty of care is `non-delegable’?

Answer 3

The employer can delegate performance of the duty, but will still be liable if it is breached.

Question 4

What is the employers duty to employees?

Answer 4

To take reasonable precautions to ensure an employees safety.

Question 5

The employers duty to take reasonable precautions to ensure an employees safety includes what obligations?

Answer 5

Obligations to provide:

1. Safe and competent employees
2. Safe / proper plant and equipment
3. Safe place of work / premises including safe access and way out
4. Safe systems of work, with adequate supervision and instruction.

Question 6

In relation to breach of employers primary liability, what should the employer take into account?

Answer 6

They should take into account an employee’s personal characteristic. Although the risk of injury might be small, the consequences of injury might be significant.

Question 7

What does strict liability mean?

Answer 7

Where one party is liable despite the absence of any fault.

Question 8

What are the requirements for vicarious liability?

Answer 8

1. Tort has been committed by Party A.
2. Party A is an employee of Party B, or failing that, is in a relationship akin to employment
3. Tort was committed in the course of Party A’s employment.

Question 9

What is the test for establishing whether the tort was committed in the course of Party A’s employment?

Answer 9

The close connection test. There must be a close connection between the employee’s wrongful act and their employment.

Is there a close connection between the employee’s tort and the role they are employed to do?

Question 10

How do you establish the close connection test?

Answer 10

1. What was the nature of the employees job?
2. Was there a sufficient connection between the position in which they were employed and their wrongful conduct to make it fair and just for the employer to be held liable?

Question 11

Can an employer seek an indemnity from its employee in relation to vicarious liability?

Answer 11

Yes, under s 1(1) Civil Liability (Contribution) Act 1978 an employer may be entitled to seek an indemnity from their employee should they be forced to pay damages in respect of the employees tort.

The court will allow such claim if it is `just and equitable’ to do so.

Generally, litigation against an employer is conducted on the employer’s behalf by their insurers who will be paying in the event of liability being established. The right to a contribution from an employee is rarely exercised by insurers following compliance with a `gentleman’s agreement’.

Question 12

What is a contract of service?

Answer 12

A contract under which services are provided in an employer/employee relationship.

Question 13

What is a contract for service?

Answer 13

A contract under which services are provided by an independent contractor, not an employer/employee relationship.

Question 14

What test is used to identify an employment relationship?

Answer 14

The favoured approach is the multiple factors’ or economic reality’ test.

Question 15

What is the multiple factors test?

Answer 15

A) REMUNERATION IN EXCHANGE FOR PERSONAL SERVICE AND MUTUALITY OF OBLIGATIONS

B) CONTROL

C) ALL OTHER CONTRACTUAL FACTORS CONSISTENT WITH AN EMPLOYMENT RELATIONSHIP

Question 16

What are `ALL OTHER CONTRACTUAL FACTORS CONSISTENT WITH AN EMPLOYMENT RELATIONSHIP?’

Answer 16

a) Tools and equipment being provided by the employer;

b) Tax/PAYE treatment as an employee rather than an independent contractor;

c) The employee being `integrated’ into the organisation;

d) The parties labelling the relationship as an employment relationship; and

e) Receiving benefits such as holiday and sick pay

Question 17

When will the relationship akin to employment be relevant?

Answer 17

It is only to be used in doubtful cases, where the tortfeasor is not an employee but they are also not carrying on their independent business.

Question 18

What is the test for relationship akin to employment?

Answer 18

The question is whether the relationship is sufficiently similar to employment to make it fair, just and reasonable to impose vicarious liability. Relationship is more likely to be akin to employment if:

a. The employer is more likely to have the means to compensate the claimant than the tortfeasor;

b. The tort has been committed as a result of an activity being undertaken by the tortfeasor on the employer’s behalf;

c. The tortfeasor’s activity is part of the business activity of the employer;

d. By allowing the tortfeasor to carry on the activity, the employer created the risk of the tort being committed; and

e. The tortfeasor is, to a greater or lesser degree, under the control of the employer.

Question 19

What is the general rule in relation to lending employees?

Answer 19

The employer will remain vicariously liable and it will be difficult to rebut this presumption.

Much emphasis is placed on the level of control the hirer has over the worker and the provision of equipment.

Question 20

Is it possible to have dual liability in the context of lending employees?

Answer 20

Dual liability might occur where an employee is lent to work for another employer and both employers have an equal measure of control over the tortfeasor.