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As a business owner, have you ever felt concerned about being held responsible for
something one of your team members did? It might have been something silly, dangerous –
or worse, hurt another person.
What is vicarious liability?
Beyond end of year and Christmas party celebrations, a recurring question that business
owners seek legal advice on is – when can I be held responsible for my employee’s actions?
The relevant principle here is called vicarious liability.
The High Court of Australia has helpfully delivered a judgment restating the key ingredients
of employer responsibility – CCIG Investments Pty Limited v Schokman [2023] HCA 21.
This recent case provides us with helpful guidance to draw a line in the sand. While we won’t
restate the entire background here (paragraphs 1 – 6 of the judgment), in brief – an
employee was assaulted by another employee while sleeping in accommodation provided by
the business they both worked for.
The assaulted employee suffered as a result of the attack and partly blamed the employer
(CCIG) because the attacker was its employee – claiming that the employer was vicariously
liable.
The High Court ruled that the employer CCIG was not liable, as the act in question (the
assault) fell outside of the course or scope of his employment.
Key takeaways:
1. For an employer to be held liable for the negligent acts of an employee, the act of the
employee needs to have happened in the course or scope of the employment.
2. The scope of an employee’s employment depends on the circumstances of each case.
3. An employer is unlikely to be held guilty if the employment merely provided the
opportunity for the incident. In this case, CCIG providing the accommodation where the
assault took place was not enough of a connection.
4. The High Court emphasised the importance of identifying what the employee was hired
to do, finding in this case that the assault had nothing to do with what the attacker was
employed to do by CCIG.
5. When assessing the potential vicarious liability of an employer, features of the
employment such as authority, power, trust, control and the ability to achieve intimacy
should be considered.
Context is important and nuanced in each of these cases – and it’s important that you seek
advice. If you are concerned that you could be liable for an employee’s actions, continue the
conversation with Burch&Co’s employment lawyers at contact@burchcolawyers.com.au
