In the context of Employment Law, vicarious liability can have serious consequences for employers. Liability refers to the responsibility or obligation to compensate for harm, damage, or wrongdoing. If you are liable for something, it means you are legally responsible for the consequences of your actions or omissions. This could be in the context of a contract, tort, or criminal act.
Vicarious liability on the other hand is where one person is held legally responsible for the actions of another, typically due to a relationship such as employer-employee. For example, an employer can be vicariously liable for the actions of their employees if those actions are performed within the scope of their employment, even if the employer did not directly cause the harm.
Running a business comes with many responsibilities such as ensuring your business operations are optimal, relevant laws are adhered to, customer service is excellent, your working environment is safe for employees and customers alike and finances are in order (to name a few). But being aware of Vicarious Liability and the legal implications of this can help protect your business.
Real-Life Case Examples of Vicarious Liability in Australia
Let’s take a look at some real-life case examples of Vicarious Liability here in Australia where an employer was either held vicariously liable for their employee’s actions or not.
Held Vicariously Liable;
Robinson v Cape York Hospital and Health Service [2017] QSC 165
In 2017, the Queensland Supreme Court found Cape York Hospital and Health Service (the ‘employer’) vicariously liable for the actions of a District Chief Executive Officer (the ‘employee’) for engaging in managerial mistreatment. This included humiliation, undermining and isolation of an employee, which the employer failed to prevent or address – resulting in a breach of its duty of care.
Worksafe Queensland shared this example (which you can access here).
Hollis v Vabu Pty Ltd [2001] HCA 44
This High Court case tested the definition of independent contractor and employee and was centred around a bicycle courier (hired by Vabu Pty Ltd) who injured a pedestrian while on delivery. Vabu Pty Ltd attempted to argue that the courier was an independent contractor, however, the court disagreed. Due to the level of control Vabu exercised over the couriers’ work, the court found that the courier was effectively an employee and Vabu was held vicariously liable for the courier’s negligence.
You can read the court case here.
Not Held Vicariously Liable;
CCIG Investments Pty Ltd v Schokman [2023] HCA 21
In this High Court case, CCIG Investments Pty Ltd (the ‘employer’) was not found to be vicariously liable for the actions of their employee. An employee had urinated on a co-worker in their shared accommodation provided by the employer, but as the act was not connected to the employee’s duties, and occurred outside the scope of employment, the employer was not held vicariously liable for their actions.
The High Court held that the employer was not vicariously liable, as the act was not connected to the employee’s duties and occurred outside the scope of employment. This case is a good example of the scope of employer responsibility for an employee’s misbehaviour. You can read more on the High Court’s website here.
Bird v DP [2023] HCA 21
This case involved historical child abuse by a priest. The High Court ruled that the Catholic Diocese was not vicariously liable because the priest was not considered an employee or agent of the Diocese, and his actions were not performed in the course of any employment relationship. Read more here.
Minimising the Risk of Vicarious Liability for Employers
So, how can an employer minimise the risk of being held vicariously liable for the actions of their employees?
The Human Rights website has fantastic resources for employers on minimising vicarious liability in the context of harassment or discrimination which you can access here.
Some of their suggestions include:
- Have a strong and clear policy on discrimination and harassment and make sure it is communicated effectively in the workplace.
- Ensure there is clear, unambiguous and visible support from senior management for the policy.
- Develop a procedure to respond to internal complaints about discrimination and harassment in a fair, timely and effective way.
- Treat all complaints seriously and investigate them promptly.
- Appoint and train harassment contact officers of both sexes with whom employees can discuss any questions, concerns or complaints about discrimination and harassment.
- Ensure that all staff are aware of the organisation’s policies and procedures regarding discrimination and harassment.
- Regularly review these policies and procedures to ensure they are up to date with the law and best practice, and ensure that any updates are clearly communicated to staff.
- Provide regular training to staff to ensure they understand their workplace responsibilities and to identify and respond to incidents of discrimination and harassment.
- Provide information about external agencies, such as the Australian Human Rights Commission, that can provide advice about dealing with complaints of discrimination and harassment.
- Monitor the workplace environment and culture, using processes such as confidential staff surveys.
- Ensure that managers and supervisors are trained effectively to understand their responsibilities to proactively identify and deal with discrimination and harassment issues. Check that they are fulfilling these responsibilities through regular performance appraisals.
- Regularly monitor strategies to prevent discrimination and harassment to ensure they are working effectively.
As always, it’s highly recommended to seek professional legal advice on your specific workplace for best practice solutions to manage your team effectively and to minimise legal risk as an employer. Contact our friendly team here for further advice and guidance.
