#7159 - Vicarious Liability - Torts A

Employers may be vicariously liable for the acts of employees, but not for independent contractors (ICs).

The current test in deciding whether a worker is an employee or an IC involves considering the relationship as a whole by balancing a number of indicia that are not conclusive alone (Hollis v Vabu). [Discuss each of the following separately]

1. Control: if the alleged employer has a right to exercise control over the worker (whether or not that control is in fact exercised) this indicates the worker is an employee (Hollis v Vabu).

2. Holidays: if the alleged employer can stipulate when holidays can be taken and for how long, this indicates the worker is an employee (Hollis v Vabu).

3. Skill level: the lower the level of skill and/or special qualifications needed to be the relevant work, the more likely it is that the worker is an employee (Hollis v Vabu).

4. Identification: if the worker is presented as an emanation of the person paying him/her, the worker is more likely to be an employee (Hollis v Vabu).

5. Equipment: if the worker is provided with equipment by the alleged employer, he/she is more likely to be an employee (Hollis v Vabu).

   • If only low-cost equipment or maintenance is required to be provided by the worker, this may not be considered to be a factor pointing towards him/her being an IC (Hollis v Vabu)

   • If equipment provided by the worker can be used for other purposes than the work for the alleged employer, it is less likely he/she will be considered an IC (Hollis v Vabu).

   • The fact a worker must replace lost or damaged equipment provided by the alleged employer is not contrary to an employment relationship (Hollis v Vabu).

If a worker or class of workers carry out the bulk of the alleged employer’s work, the workers are more likely to be employees (Hollis v Vabu).

Other possible indicia were indicated by Mason J in Stevens v Brodribb Sawmilling. He said that

• Obligation to work: a worker obliged to work is more likely an employee

• Setting own hours: a worker setting his/her own hours is more likely an IC

• Ability to work for other employers: a worker able to work elsewhere is more likely an IC

• Ability to delegate work: if a worker can delegate their work to others, he/she is more likely an IC

• Type of payment: if the worker has to pay his/her own tax (ie the employer does not deduct it for him/her) he/she is more likely an IC

Organisation test: the organisation test states that if the work done by a worker is ‘part and parcel’ to or integral to the organisation, the worker is an employee. However, Mason J in Stevens v Brodribb noted that this test simply adds more difficulty to the indicia test, so it appears uncertain if this test would be used.

The traditional Salmond test (in less antiquated language) states that an employer is responsible for wrongful acts done by his/her employee is the act is

1. Either a wrongful act authorised by the employer or

2. A wrongful and unauthorised mode of doing an act authorised by the employer

Authority may be actual or apparent.

• Actual authority requires express or implied authorisation.

  • Express authority is given where the employee is told to do a particular thing

  • Implied authority will be found if, for example, the employee was hired to do the act that was done (eg coach driver driving a coach).

• Apparent authority to do a particular task will be presumed if the employer has behaved in such a way as to create the impression the act was authorised.

In the case of negligent torts, n employer will be liable for tortious acts done by his/her employee if the act was done by the employee in doing work which he/she was engaged to perform in a wrongful and unauthorised mode (Beard v London General Omnibus; Limpus v London General Omnibus).

[Consider what tasks E was employed to perform and whether the tort occurred while doing this. May be arguable either way]

An act may be considered ‘in the course of employment’ even if the employer expressly forbade it (Bugge v Brown; Limpus v LGO).

• This may be the case where the employer has not expressed himself so clearly that the violation makes the conduct completely remote and disconnected from the employee’s employment (Bugge v Brown).

• An employer may be more likely to be responsible where the disobeying of the order was for the benefit of the employer (Limpus v LGO).

Traditionally, employers have not been held liable for intentional or criminal acts done by employees where (for example) they are not in furtherance of the employer’s interests, not expressly or impliedly authorised and not an incident to or consequence of anything the employee was employed to do (Deatons Pty Ltd v Flew).

However, later decisions held that an employer can be liable [for unauthorised tortious acts] even if there is no benefit to the employer (Lloyd v Grace, Smith & Co; Morris v CW Martin).

• in Llloyd v Grace, Smith & Co the court, considering policy reasons involving who of two innocent parties should bear loss, held that the employer who put the employee in a position of trust must be answerable for the manner in which the employee conducted himself or herself in the execution of his/her duties, even if the employer got no benefit from the act.

  • The employer would not be liable where the employment merely created the opportunity for wrongdoing and the employee undertook to do ‘independent acts’ (eg assaulting client/stealing money from purse).

• in Morris v C W Martin & Co the court held that an employer will be liable for an intentional tort of his/her employee even where he/she gets no benefit, if the employee’s duties were connected to the occurrence of the tort...