When does an employer's responsibility for its
staff's actions end? Recent cases suggest they face increasing risks of being
found liable for their employees' behaviour, as Sarah Johnson
explains.
Employer liability
for their employees' violent behaviour is becoming ever wider in scope.
This is bad news, particularly for HR, given the increasing reluctance of liability insurers to pay out
for deliberate acts that cause injury.
The
Court of Appeal recently confirmed this trend when it ruled a nightclub owner
was liable after a bouncer he employed stabbed someone outside his club (Mattis
v Pollock (t/as Flamingo's Nightclub), 2003, EWCA Civ 887, and the victim was
left a paraplegic. The court heard that the bouncer had been involved in an
incident with Mattis and his companions at Pollock's nightclub. The bouncer ran
home, picked up a knife, and returned 15 minutes later to stab Mattis outside
the club, severing his spinal cord.
Employers
are legally responsible, or 'vicariously liable' for the behaviour of their
employees if it takes place 'in the course of their employment'.
Liability
derives from common law and discrimination legislation. So how could Pollock be
responsible for such a violent act which did not even take place on his
premises?
The
factors that were taken into account by the appeal court in this case provide
some important lessons for avoiding liability.
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Pollock encouraged his bouncer to perform his duties in an aggressive and
intimidatory manner. Solution: Do not allow, encourage or give instructions for
unlawful conduct.
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Fellow employees warned Pollock the bouncer was 'dangerous' and 'a bully'.
Pollock seemed to see his reputation as an advantage. Solution: Act on warnings
and take steps to prevent unlawful conduct.
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The bouncer was not licensed as a doorman, and should not have been employed at
all. Solution: Do not employee unsuitable staff.
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How closely connected an act is with the performance of the employee's duties
will be crucial. Employers are at greater risk of liability for violence if
they authorise an employee to deploy it in the course of employment, or employ
him to keep order and discipline. For example, employers are more exposed to
liability for an employee's thefts if engaged to look after property; or
liability for abuse if employed to care for and supervise others. Solution:
Take particular care where duties may involve danger to others' safety or
possessions.
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Although the bouncer went home and armed himself before returning to the
vicinity of the club, where he stabbed Mattis, itwas effectively the culmination of an incident (a fight) which
started within the club while he was working and occurred during his working hours.
Solution: Do not allow incidents to start at the workplace which could develop
into something more serious.
Common
law
Under
common law, courts used to look at whether an employee's act could be viewed as
having been authorised by the employer or as a wrongful or unauthorised mode
(method) of doing some act authorised by the employer.
The
problem with this test was that, the worse the employee's behaviour, the less
likely it was that the employer would be liable.
However,
in Lister and Others v Hesley Hall Ltd, 2001, IRLR 472, the common law test of
vicarious liability was redefined.
The
House of Lords held that when deciding whether an act had been committed in the
course of an employee's work, courts should concentrate on the relative
closeness of the connection between the nature of employment and the employee's
wrongdoing.
This
makes it easier for an employer to be found vicariously liable.
The
difference in approach is highlighted when you compare Lister with the earlier
case of Trotman v North Yorkshire County Council, 1999, IRLR 98 CA. In that
case, a boy sued the council on the basis that it was liable when his deputy
headmaster sexually assaulted him on a school trip. The Court of Appeal held
that the council was not liable for its employee's behaviour; the indecent
assault was an independent act outside the course of employment. It was not a
mode - albeitan improper or unauthorised mode - of doing what the deputy
headmaster was employed to do. The case was overruled by the Lister verdict.
In
Lister, a boarding school owner was sued by boys who were sexually abused by
the school warden. The House of Lords held the employee's position as warden,
and the close contact with the boys his work involved, created a sufficiently
close connection between the abuse and the work he was employed to do, to hold
the employer vicariously liable for his behaviour. The assaults were committed
in the employer's time and on its premises while the warden was caring for the
boys.
The
potential for employer's liability was expanded in Dubai Aluminium Company Ltd
v Salaam and Others, 2002, UKHL 48. Historically, employers were less
likelyto be held liable for employees'
dishonesty than for their negligence. In Dubai, it was held that vicarious
liability cannot be avoided just because the employee's wrongdoing was
intentional, criminal, for his own exclusive benefit or contrary to express
instructions. The closeness of connection between the duties he was engaged to
perform and the wrongdoing must still be considered.
Discrimination
Employers'
liability for their employees' actions is easier to establish under
discrimination statutes, although recent cases make the difference less marked.
Under
the Race Relations Act 1976 (RRA), anything done by a person in the course of
their employment is treated for the purposes of the RRA as having been done by
their employer as well, whether or not it was done with the employer's
knowledge or approval. Similar wording is used in the Sex Discrimination Act
1975 (SDA), Disability Discrimination Act 1995 (DDA) and in other legislation,
including that protecting fixed-term employees and part-timers and in
forthcoming regulations outlawing discrimination based on sexual orientation,
religion and belief.
Discriminatory
acts by employees can be seen as being done 'in the course of employment' even
where what they were doing had nothing directly to do with their duties. For
example, in Jones v Tower Boot Co Ltd, 1997, IRLR 168 CA, Jones suffered racial
harassment from colleagues. His arm was burnt with a hot screwdriver, metal
bolts were thrown at him, he was whipped with a piece of welt and repeatedly
called offensive names.
The
employer was held liable for its employees' acts of harassment. Under the RRA,
SDA (and arguably other discrimination legislation), the words 'in the course
of employment' should be interpreted as they are in everyday speech, not using
the more restrictive common law test.
Outside
work
Liability
can extend to social events outside work. The key question is whether a social
gathering involving work colleagues is an extension of their employment.
Factors
considered when deciding an employer's liability for discrimination outside
work are:
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Whether the conduct occurred on the employer's premises
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Whether those present were on duty/there during their working hours
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Who was present
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Whether it was a work-related social gathering or a chance meeting
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Whether it was immediately after work, and
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Whether the victim was socialising with the perpetrator.
Liability
will depend on the facts. In Chief Constable of the Lincolnshire Police v
Stubbs, 1999, IRLR 81, EAT, Stubbs was subjected to inappropriate sexual
behaviour by a fellow employee at a pub and a leaving party. It was held that
the employee was acting in the course of his employment. Although the incidents
took place away from the police station, they were at social gatherings
involving officers from work either immediately after work or for an organised
leaving party, and were extensions of the workplace.
However,
in Sidhu v Aerospace Composite Technology Ltd, 2000, IRLR 602, CA, Sidhu was
racially abused by a fellow employee outside working hours at a family day out
at a theme park organised by his employers. The employers were not found to be liable.
Factors in the decision may have been that the day out was not at the
workplace, everyone was there in their own time and the majority of
participants were friends and family, not employees.
Defence
Under
discrimination legislation, there is a defence for employers to claims they are
vicariously liable for their employees' acts. The employer has to prove it took
such steps as were reasonably practicable to prevent the employee from doing
the act complained of, or from doing acts of that description in the course of
their employment. It is not enough for an employer to show that an act was done
without its knowledge or approval.
Whether
the defence will work will be a question of fact in each case. Simply having an
equal opportunities policy is unlikely to be enough. Nor is giving a warning or
circulating a note saying the employer will not tolerate discrimination, if, in
practice, this is not what happens. It will need to show it complies with the
policy, that the policy has been brought to employees' attention and that
managers at least, are trained on discrimination issues, the policy's contents
and how to comply with it.
Liability
for third-parties' actions
Employers
who fail to take adequate steps to protect their employees from harassment by
third parties (rather than employees or agents) could also face liability.
The
leading case on this was Burton and Rhule v De Vere Hotels, 1996, IRLR 596,
EAT, where two black waitresses successfully claimed the hotel where they
worked was liable for racial harassment by Bernard Manning, the speaker at a
dinner, and some diners.
It
was held that De Vere Hotels was liable if it had caused or permitted
harassment serious enough to amount to a detriment to occur in circumstances
where it could control whether it happened.
The
question was whether the event was sufficiently under the employer's control
that, by applying good employment practice, it could have prevented or reduced
the extent ofharassment. No statutory
defence applied, but the employers would not be liable if they had taken
reasonable steps to prevent or stop the acts in question.
However,
in Pearce v Governing Body of Mayfield School, 2003, UKHL 34, the House of
Lords criticised the Burton case, ruling on the basis that it overlooked the
need to establish discrimination, and held that it was wrongly decided. Despite
this, employers should still take the necessary steps to prevent harassment of
their employees by third parties. A discrimination argument could still be
raised and failing to protect employees can lead to claims of breach of
contract, constructive unfair dismissal and liability for consequent illness,
such as stress.
Other
areas of liability
Liability
is not confined to the employer/employee relationship. For example, there is a
'vicarious liability' provision under the Partnership Act 1890 covering
partners, and an individual (principal) will be liable for agents' acts that
lie within the scope of its authority. Therefore, if an agency puts forward
only white male candidates for a position on an employer's instruction, both
could be liable for sex and race discrimination.
Conclusion
Recent
cases suggest that the risk of vicarious liability for employers is increasing.
It is vital to take all reasonable steps to prevent employees from engaging in
unlawful conduct - otherwise employers may find themselves paying heavily for
their behaviour. However, if appropriate steps are taken, and employees are
managed properly, the risk should be significantly reduced.
Sarah
Johnson is a senior solicitor in the employment department at Manches
Practical
steps to take to avoid vicarious liability
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Have an equal opportunities policy in place, and follow it
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Train employees on the policy, how to comply with it, and what is acceptable behaviour
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Ensure breach of the policy is specified as a disciplinary offence
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Nip unacceptable behaviour in the bud - don't just turn a blind eye
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Manage misconduct fairly and consistently, ensuring that unacceptable behaviour
is dealt with under your disciplinary procedure, if appropriate
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Carry out risk assessments
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Ensure employees with access to children or other vulnerable people are
carefully vetted, supervised and trained
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Ensure employees are aware that appropriate standards should be maintained even
outside working hours - for example, at the pub after work
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Remind employees of what constitutes appropriate behaviour before work
functions, such as the Christmas party
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Implement a confidential complaints procedure (with specialist training for
complaint handlers)
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Deal promptly and fairly with complaints and investigate them sensitively
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Don't allow a culture to develop in which complaints are trivialised, letting
conduct get out of hand.
