Employers' primary liability and vicarious liability

Question 1

Employer’s primary liability

Answer 1

this is the law of negligence applied to the employer / employee 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. So, this very much builds on your previous studies in relation to negligence.

Question 2

Vicarious liability

Answer 2

this is where one party is held liable for the torts of another and is most commonly exercised in employer / employee relationships. There are three parties involved – the victim who has suffered harm, the employee that caused that harm by committing a tort, and the employer who might be vicariously liable for the harm caused by its employee.

Question 3

Identifying an employment relationship

Answer 3

given the above topics generally involve employees (employers’ primary liability always does), you will also need to briefly study what an ‘employee’ is. This element also addresses the concept of ‘relationships akin to employment’, as vicarious liability can arise in such relationships too.

Question 4

Why consider employers’ primary liability separately?

Answer 4

Employers’ primary liability merits particular attention because:
a) Some tortious principles have been developed which are unique to this area; and
b) It is an important area in practice: work-related injuries and ill-health have a significant economic and human impact, and also represent a significant field of litigation.

To ensure that the duty on employers really does confer practical protection on employees, it is compulsory for employers to have insurance to cover such claims.

Question 5

Employers’ duty of care: personal and non-delegable

Answer 5

The most important feature of the duty of care imposed on employers is that it is personal and non-delegable (McDermid v Nash Dredging [1987] 2 All ER 878). This means that regardless of who the employer uses to carry out tasks, the ultimate responsibility for the safety of the employee rests with the employer – they can delegate performance of the duty, but not liability for its breach. This means employers are directly liable if those they have entrusted with responsibility fail to exercise reasonable care in respect of an employee’s safety.

Question 6

What is the employer’s duty?

Answer 6

Rather than relying on the basic formulation that a duty to take ‘reasonable care’ is owed, we can look at how the courts have actually specified what is encompassed by the duty owed by an employer to their employees.

Key case: Wilsons and Clyde Coal Co Ltd v English [1938] AC 57

In this case the House of Lords held that the employer’s duty to take reasonable precaution to ensure an employee’s safety included obligations to provide:
a) Safe and competent employees;
b) Safe and proper plant and equipment;
c) Safe place of work/premises, including safe access and way out; and
d) Safe systems of work, with adequate supervision and instruction

What is clear is that there is only one single duty, namely to take reasonable precaution to ensure an employee’s safety while at work.

Question 7

Safe and competent fellow employees

Answer 7

Case example: In Hudson v Ridge Manufacturing Company Ltd [1957] 2 QB 348 the claimant succeeded in a claim against his employer who was in breach for employing someone known to be in the habit of playing practical jokes on fellow employees. The employee who performed the prank had been carrying out pranks for four years and had been told off repeatedly by the foreman. They should have been dismissed or re-deployed. Note that the employer must know, or ought to know, about the risk a worker is imposing to other employees.

If an incompetent person is employed or required to do a job that they are not capable of doing, then there will be a breach (Black v Fife Coal Ltd [1912] AC 149).

Note that where one employee injures a fellow employee then, in addition to a possible action against the employer for breach of this duty, there may also be the possibility of (1) an action against the employee who caused the harm (though, financially, this would almost certainly be a waste of time) and (2) the employer being vicariously liable.

Question 8

Safe and competent fellow employees - Safe / proper plant and equipment

Answer 8

An employer owes an employee a duty to provide and maintain safe machinery, plant and equipment (including any necessary safety features and protective clothing).

Question 9

Safe and competent fellow employees - Safe place of work

Answer 9

The employer has a duty to take reasonable care to ensure that the premises the employee works in are safe. Many employees will need to do some / all of their work in premises which are not owned / occupied by the employer. The employer’s duty extends to these ‘third party’ premises too.

The court considers what is reasonable in the circumstances, including the place of work, the nature of the building, the experience of the employee, the nature of the work, the degree of control exercised by the employer and the employer’s knowledge of the premises (Cook v Square [1992] ICR 262).

Question 10

Safe and competent fellow employees - Safe system of work

Answer 10

The duty to provide a safe system of work is the widest facet of the employer’s duty, and therefore, the most frequently argued. It includes, amongst others, the physical layout of the job, the setting of the stage, the sequence in which the work is to be carried out, the provision of warnings, notices, training, supervision and the issues of special instruction.

It is not enough to simply devise a safe system; the employer must take reasonable steps to ensure it is complied with.

Question 11

Breach

Answer 11

The duty on the employer is to take reasonable care (Latimer v AEC [1953] AC 643). It is not an absolute duty. Only a reasonable level of precaution need be taken ie an objective test is used, based on the reasonable employer.
An employer should take into account an employee’s personal characteristics.

Question 12

Causation

Answer 12

As with other negligence actions, it is necessary to establish both factual and legal causation. A common situation where factual causation is relevant concerns the provision of safety equipment. If the employer fails to provide safety equipment, causation may not be satisfied if they can show that, even if it had been provided, the employee would not have used it. As such the ‘but for’ test is invoked (McWilliams v Sir William Arrol [1962] 1 WLR 295). Of course, in some situations mere provision of equipment may not be enough to satisfy the duty. In more dangerous working environments, it may be necessary to give specific instruction about safety equipment or even to enforce its use. If this is the case, arguments based around novus actus interveniens are more difficult to establish.

Question 13

Remoteness

Answer 13

As in all negligence cases, the remoteness of harm must be considered. Though most cases involve physical injury, the courts have recognised mental harm such as stress may be recoverable in some cases.

Question 14

Defences

Answer 14

• The usual general defences apply.
• In relation to consent, if an employee consents to the risk then his employer may have a good defence. However, judges are very sceptical of this defence in the employment context (Bowater v Rowley Regis Corporation [1944] KB 476) and it can only be successfully invoked in extreme circumstances where ‘there was a genuine full agreement, free from any kind of pressure, to assume the risk of loss’ (ICI Ltd v Shatwell [1965] AC 656 per Lord Pearce).
• In relation to contributory negligence, this partial defence frequently succeeds in an employment context where there is evidence that the claimant employee has failed to take reasonable care of their own safety and this failure contributes to the loss suffered. An example is Bux in which the claimant was held 40% to blame for his injuries when he failed to wear safety goggles provided by his employer. Another example is Clifford in which the claimant failed to use barrier cream that could have helped avoid him contracting dermatitis – his damages were reduced by 50%.

Question 15

Elements of vicarious liability

Answer 15

To establish that Party B should be vicariously liable for a tort committed by Party A it must be shown that the three elements on the right are satisfied:

a) A tort has been committed by another person (Party A) and

b) Party A is an employee of Party B, or failing that, Party A is in a relationship akin to employment with Party B and

c) The tort was committed in the course of Party A’s employment / quasi-employment.

An employer will be held vicariously liable for the acts of their employee if there is a ‘closeness of connection’ between the employee’s wrongful act and their employment. The courts focus on the time the wrongful act was committed and all other relevant circumstances. This is almost certainly a broader test.

Question 16

2002 case law - this is the current approach to the close connection test

Answer 16

Lister v Hesley Hall Ltd [2002]
The defendant company, who ran a children’s home for boys, was held vicariously liable for sexual abuse committed by one of its employees, a house warden.
Lord Steyn stated that the correct approach when determining this issue ‘is to concentrate on the relative closeness of the connection between the nature of the employment and the particular tort.’ In this case, the warden’s torts were closely connected with his employment as it was because of his position that he was able to exploit the children, so it was held to be fair and just to hold the employer vicariously liable. The tort was committed on the employer’s premises during working hours whilst he was caring for the children in performing his duties.

Question 16

Current approach: close connection test

Answer 16

Recent case law emphasises the importance of the connection between the employee’s employment duties and the tort committed: is there a close connection between the employee’s tort and the role he/she is employed to do?

In Mohamud v WM Morrison Supermarkets plc [2016] UKSC 1 the Supreme Court provided further guidance on the close connection test and held it was two-fold:

a) What functions or ‘fields of activities’ have been entrusted by the employer to the employee (what was the nature of their job)?
b) Was there 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 17

the law pre Lister

Answer 17

A tort was in the course of employment if the wrongful act was:
a. Expressly or impliedly authorised by the employer;
b. Incidental to the carrying out of the employee’s proper duties; or
c. An unauthorised way of doing something authorised by the employer.

Question 18

The employer’s indemnity

Answer 18

• In vicarious liability situations there are often joint tortfeasors, ie two parties, such as employer and employee, who are jointly liable. In reality, often the only party sued is the one in the best position financially to meet any judgment.
• 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 employee’s tort. So, although the victim claims against the employer, the employer may be able to claim something back from the employee. The court will allow such a claim if it is ‘just and equitable’ to do so.
• Generally, litigation against an employer is conducted on the employer’s part 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 their compliance with a ‘gentleman’s agreement’ not to do so in the absence of wilful misconduct or collusion.

Question 19

contract of service vs contract for services

Answer 19

‘Contract of service’ - a contract under which services are provided in an employer / employee relationship.

‘Contract for services’ - a contract under which services are provided by an independent contractor, not in an employer / employee relationship.

Question 20

Why does it matter, for the purposes of tort law, whether or not someone is an employee?

Answer 20

a) A body of case law has been developed which explains the common law duty of care owed by employers to employees ie how an employer might be negligent in relation to its employees. A duty might still be owed by a business to other types of worker, but as a general rule the level of protection offered to employees is higher than for other workers. The case law which relates to employees will not automatically apply to other workers such as independent contractors.
b) An employer can be vicariously liable for torts committed by an employee ie might have to compensate a claimant where the claimant suffers from a tort committed by an employee. Vicarious liability is covered in a different element, but for present purposes, the key point is that to establish vicarious liability, it is generally necessary to show an employer/employee relationship or a relationship akin to an employer/employee relationship.

Question 21

How to identify an employment relationship?

Answer 21

The favoured approach is the ‘multiple factors’ or ‘economic reality’ test from the following case.

Key case: Ready Mixed Concrete v Minister of Pensions [1968] 2 QB 497

The court indicated that there is a three-part approach to take when considering whether there is an employment relationship:
a) Remuneration in exchange for personal service and mutuality of obligations;
b) Control; and
c) All other contractual factors consistent with an employment relationship.

Question 22

Remuneration in exchange for personal service and mutuality of obligations

Answer 22

This means the employee is being paid to fulfil their duties personally. If a worker has an unfettered right to send a substitute to do the work in their place (and the employer has no role in choosing that substitute), this cannot be an employment relationship.
Mutuality of obligations means the employer is required to provide work to the employee and the employee is required to do the work. In a ‘zero hours contract’ the absence of mutuality of obligations means the worker is unlikely to be deemed an employee.

Question 23

Control

Answer 23

The court will consider the amount of control that the employer exercises over the worker. The more control that the employer has, the more likely it will be that the other party is an employee. Consider who has control over the tasks to be done, the way in which the tasks are performed (including who provides the tools) and when and where the work is to be completed.

Question 24

All other contractual factors consistent with an employment relationship.

Answer 24

In order for there to be an employment relationship, other contractual factors must be consistent with that. Other factors that might point towards an employer / employee relationship are:
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 – but the labels given to the party (either way) are not conclusive; and
e) Receiving benefits such as holiday pay and sick pay.

Question 25

A relationship akin to employment

Answer 25

• The doctrine of vicarious liability provides that in certain circumstances an employer can be vicariously liable for torts committed by an employee. Until 2012 the only cases that had succeeded in vicarious liability were those where there was a traditional relationship of employee/employer between the parties.
• Subsequent case law established that there could also be vicarious liability in relationships akin to an employment relationship. This concept is only to be used in ‘doubtful’ cases, where the tortfeasor is not an employee but nor are they carrying on their own independent business. The concept of being in a ‘relationship akin to employment’ does not change the fact that where the tortfeasor is carrying out their own independent business, there is no vicarious liability.

Question 26

Test for relationship akin to employment

Answer 26

The Supreme Court held that where the tortfeasor is not carrying on their own independent business, the question is whether the relationship is sufficiently analogous to employment to make it fair, just and reasonable to impose vicarious liability. In such cases, it may be useful to consider that a relationship is more likely to be akin to an employment relationship 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 27

Lending employees

Answer 27

What happens where an employer (X) lends his employee (A) to another employer or hirer (Y)? If A commits a tort, it is necessary to establish whether X or Y is vicariously liable.

The general rule: the employer (X) will remain vicariously liable, and it will be difficult for X to rebut this presumption (Mersey Docks and Harbour Board v Coggins and Griffiths [1947] AC 1). Much emphasis is placed on the level of control the hirer has over the worker and the provision of equipment. In Mersey Docks a crane driver (A) and his crane were hired to Y. Y could instruct him as to the work to be done on a day-to-day basis, but they did not tell him how to operate his crane. The House of Lords found that A was still the employee of X; X had authority to tell A the manner in which his work should be done (A was using X’s crane), X paid A’s wages, had the power to dismiss A and the duration of the post was temporary.

It is possible for both X and Y to be vicariously liable (Viasystems Ltd v Thermal Transfer Ltd and Others [2005] EWCA Civ 1151) (although rare). Dual liability might occur where an employee is lent to work for another employer and both employers are entitled, and obliged, to control the employee’s actions so as to prevent the negligent act ie the employers have an equal measure of controlover the tortfeasor.