Can employers be vicariously liable for a rogue employee?

Blog

11.02.2022

Earlier this year, the Court of Appeal found in favour of the respondent in the case of Chell v Tarmac Cement and Lime Ltd, and dismissed the claimant’s claim that the respondent was vicariously liable for the wrongs committed by its employee, which had caused harm to the claimant. This is good news for employers as it reinforces that there is a reduced risk of liability for employers where a rogue employee is acting inappropriately and such actions are outside the scope of their employment.

A reminder of the principle of vicarious liability

Vicarious liability is the legal principle that an employer can be responsible for the action of its employees, even when the employee has committed an action that the employer would not approve of, and where the employer has not committed any wrong itself. In these cases, liability can be imputed onto the employer if certain conditions are met.

It is important to note that vicarious liability is secondary liability, that is to say that the employee has to have committed a legal wrong for which they are liable before the employer can be attributed with liability. In these situations, the employer is able to recover damages from the employee. For example, in Lister v Romford Ice and Cold Storage Co. Ltd. [1957], the employer sued its employee driver after having to pay damages to someone the driver had run over.

The test for vicarious liability

The test for vicarious liability is comprised of two components.

First, is there a relationship between the employer and the wrongdoer? Vicarious liability primarily covers employees, but can also cover relationships that are sufficiently close to employment relationships – for example workers, agency workers and partnerships.

Second, in the words of the Court in Chell, the key question is “was it a wrongful act authorised by his employer… or a wrongful and unauthorised mode of doing some act authorised.” In other words was there sufficient connection between the wrong committed and the employee’s employment, role and duties such as to make it fair to hold the employer vicariously liable? Courts consider a number of factors in assessing whether there was a sufficient causal nexus, including:

Closeness to the employment, and what was authorised or expected in terms of the nature of the work;
Proximity in time to work-related matters, for example whether the incident occurred while on duty, or soon after going off duty;
Whether the incident occurred at or close to work;
Whether the incident was caused by something work related;
Whether the employment involved a responsibility for the safekeeping of someone or something and
Whether the wrongdoing entailed a failing in that responsibility; or
Whether the wrongdoing involved the exercise of authority derived from employment.

This assessment is highly fact sensitive. In Smith v Stages [1989] the question was raised as to whether an employer was vicariously liable for an employee driving his own car to workplaces. The court stated it was in the course of employment if the employee was instructed to drive from one workplace to another during the working day, but was outside the scope of employment if he then deviated on that journey, or if the employee was travelling to their normal place of work in a private vehicle.

An employer is not liable if the wrongdoer is engaging on a “frolic of his own” or acting on a “personal vendetta”; in this situation, it cannot be regarded as sufficiently closely connected with their employment. Historically there was concern that courts were taking an overly "pro-claimant" view of claims. However, the Supreme Court in WM Morrisons Supermarkets plc v Various Claimants [2020] re-emphasised the need to have a connection between the wrong committed and the course of the wrongdoers ordinary employment (for more, see our blog here).

The facts

The claimant, Mr Chell was a contractor working at Tarmac’s premises. Tarmac engaged both independent contractors and employees on the site and there were underlying tensions between the two groups. Mr Heath, one of the employees of Tarmac placed two explosive pellets near to Mr Chell and detonated them. Mr Chell suffered from hearing loss and tinnitus as a result. Mr Heath was dismissed by Tarmac.

Mr Chell sued Tarmac, claiming they were vicariously liable for the harmful actions of their employee, Mr Heath.

The decision

Tarmac denied that the actions of Mr Heath were within the course of his employment and denied any liability for his actions which they claimed were outside the scope of any reasonable foreseeability, risk assessment or his employment, and were actions of his own volition. The County Court agreed with this and Mr Chell appealed. The appeal was also dismissed by the High Court, which endorsed the comments made by County Court that “horseplay, ill-discipline and malice are not matters that I would expect to be included within a risk assessment”.

Mr Chell subsequently appealed to the Court of Appeal which also dismissed the appeal. Lady Justice Nicola Davies noted “on no basis” could Mr Heath’s actions constitute part of the course of his employment. This was because:

The injury was caused by Mr Heath’s own equipment;
The use of explosive pellets did not constitute a part of Mr Heath’s employment;
There was no evidence of an abuse of power; and
While there were tensions between contractors and workers, there was no indication of a risk of physical violence, not least between Mr Heath and the Claimant.

As such, Tarmac merely gave Mr Heath the opportunity to perform the practical joke, rather than authorising Mr Heath to perform the joke or creating a substantial risk of harm to the Claimant.

What can employers learn from this case?

Courts appear to be taking a firmer line that an employee engaged on a personal vendetta that is incidentally related to the workplace will not generate liability for the employer, which is something that employers will welcome. Even still, it serves as a good time to remind employers how to avoid workplace liability:

Have robust policies and provide training on your policies. As the first-instance judge noted, practical jokes “are seldom funny, it is often a form of bullying”. Employers should regularly train on anti-bullying policies. A practical joke or tension can simmer into physical injury. Banter and jokes can be harmful, whether physically or potentially raising a discrimination risk (for more on how workplace banter can breach the Equality Act see our blog here).
Reconcile workplace difference – this case was set against a background of tensions between contractors and employees. This tension turned into practical joke with life altering consequences for the claimant. Tensions are often caused by misunderstandings which may be solved by facilitated conversations.
Remember vicarious liability can also be caused by accidents. In addition to anti-bullying training, it is important to ensure that health and safety is a prominent feature of employee training with comprehensive and tailored risk assessments made.
If all else fails, as the Court of Appeal advised in the Morrisons case, ensure that you have a robust insurance to cover yourself against harms committed in the workplace.

With special thanks to Alex Evans, a current paralegal in our Employment team, for his help in preparing this blog.

If you require further information about anything covered in this blog, please contact Shehnal Amin or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.