Vicarious Liability

Formalties

Identify each set of parties in answering the question.

Two clear elements must be established in order to establish a vicarious liability:

1. was the tortfeasor the defendant’s employee; and

2. was the tortfeasor acting in the course of his or her employment at the time the tort was committed.

The existence of a relationship of employer and employee

The general rule is that there is virarious liability for employees, but not independent contractors.

Many test have been sugested for distinguishing between a contract of service and a contract for serevices. These include:

Control test - Ready Mix Concrete Ltd v Minister of Pensions and National Insurance (1968)

Integration test – Stevenson Jordan & Harrison Ltd v MacDonald & Evans (1952)

Organisation Test – Albrighton v Royal Prince Alfred Hopital (1980)

The current approach taken by the High Court has been described as the ‘multi-factor test’ – Stevens v Brodribb Sawmilling Co Pty Ltd. It is in effect no single test at all. Wilson & Dawson JJ noted;

“the ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance.

List factors tending towards classification as an employee/contractor:

Indicia tending towards classification as an employee include:

The right to have a particular person do the work The right to suspend or dismiss the person engaged The right to the exclusive services of the person engaged The right to dictate the place of work and hours of work.

Indicia tending towards classification as contractor include:

The provision by him of his own place of work or his own equipment the creation by him of goodwill or saleable assets in the course of his work the payment by him from his remuneration of business expenses the payment to him of remuneration without deduction for income tax.

Conclusion as to whether defendant is an employer or contractor.

(This is what you write if you conclude that the person is an independent contractor)

If the defendant is an independent contractor the employer can’t be vicariously liable for the acts of that contractor. The employer will only be liable (as a primary liability) if the employer’s tortious duty is, in law, non-delegable: Kondis v STA; Burnie Port Authority v General Jones Pty Ltd.

Non-Delegable Duties of Care

A non-delegable duty is not a separate duty of care – it is a characteristic of certain duties that arise due to the special relationship between the parties eg. An employer owes a non-delegable duty of care and as such in some circumstances an employer will be held personally liable for the neglient act of an independent contractor.

In Kondis Mason J identified schools and hospitals particularly as attracting this type of duty but further relationships may also be included if the necessary characteristics are met.

In Burnie Port Authority v General Jones Pty Ltd the HCA identified central features in identifying special non-delegable duty namely:

1. Degree of control on part of defendant2. Special dependence or vunerability on part of the defendant3. Nature of activity and failure to ensure that care is taken, especially where hazardous.4. Considerations of utility and financial responsibility.

(Apply to facts of question)

Was the employee acting within the course of employment?

General rule is that whilst acting in the course of employment the employer is not vicariously liable for independent wrongful acts of employees (Bugge & Brown)

This is a question of fact. In determining the answer you must consider:

1. the scope of employment relationship.

2. The authority conferred on the employee.

In determining the scope of the employment relationship the actions of the employee must be reasonably incidental to employment ie. the employer is not vicariously liable if the employee is on a frolic of there own (Joel v Morison).

(Situations to consider & the neccesary authorities)

Wrongful mode of completing authorised act – employer vicariously liable (Bugge & Brown)

Express prohibition by employer not necessarily a defence if the employee’s act was still a mode of doing what he employee was employed to do – employer vicariously liable (Century Insurance Company v Northern Island Road Transport).

Acting outside scope of employment relationship – employer not vicariously liable (Koorang Investments v Richardson)

Then consider wilful torts

Battery in a football game – employer vicariously liable (Canterbury RLFC v Rogers).

Fraud of servant – employer may be vicariously liable (Lloyd v Grace)

Servant steals property of another – employer vicariusly liable (Morris v Martin).

Misguided reliance by employer on employee’s fraud – employer may escape vicarious liability (The Ocean Frost).

What to consider if relationship is Principle and Agent

See notes from Carolyn

Employees on Loan

General rule is that vicarious liability can’t be shared. It must be assigned to one employer. The general principle is that the lending employer will remain responsible (Mersey Docks & Harbourside Board v Coggins & Griffiths). However, this principle may not apply where there is a complete transfer of control from one employer to another (McDonald v Commonwealth). In situations of this type the ionus of proof is on the lending employer to show there has been a complete transfer of control to the other employer (Mersey Docks).

In determining the authority conferred on the employee just apply the facts from the question.

Conclusion

Draw a conclusion as to whether the employer is vicariously liable. Quick summary of statutory impact (see Carolyn’s notes).