An Update on Vicarious Liability for Employers

Many employers will be familiar with the concept of vicarious liability and its impact. At common law, an employer is vicariously liable for tortious acts carried out by its employees during the course of their employment.

To determine whether or not an employer is vicariously liable, case law has developed a two-stage test for determining whether or not vicarious liability exists. Both elements of this test must be satisfied to establish vicarious liability.

Stage 1: Is the relationship between the employer and the individual a relationship that is “akin to employment”?

Stage 2: Is the wrongdoing so closely connected with the acts the individual was authorised to do that it can be fairly regarded as being done in the course of their employment? This stage is also referred to as the “close connection test”.

What is “akin to employment”?

The court must consider whether features of the relationship between the parties that are similar to, or different from an employment relationship. These features include amongst others:

• Is the individual paid in money for their work or in kind?
• How integral is the work carried out by the individual to the organisation?
• Does the employer exert control over the individual and how much?

What is the close connection test?

A recent Supreme Court case has confirmed that the close connection test should consider whether the wrongful conduct was so closely connected with the acts committed by the individual, that it can fairly be regarded as being done by the individual whilst they were acting in the course of their employment.

When determining whether or not this test is met, the court will consider factors such as:

• Where the wrongful conduct took place (at home or at the place of employment);
• Whether the individual was engaged in work at the time the misconduct took place; and
• Has the employment relationship facilitated the act of misconduct?

The recent case of MXX v A Secondary School has considered how the two-stage test for vicarious liability should be applied in the context of work experience placement.

By way of background, PXM, a former pupil of the defendant, undertook a 1-week work experience placement at a school. In March, PCM began communicating with the claimant (aged 13) on social media. It became evident that PXM had been ‘grooming’ the claimant and the messages ultimately led to PXM committing assault and battery against the claimant. He was subsequently arrested and pleaded guilty to several charges.

The claimant sought damages from the school for personal injury as a result of recognised psychiatric illness as a consequence of the assaults. The claim was dismissed in the High Court, which held that the school was not vicariously liable as the claimant had failed to establish that PXM’s relationship with the school was not akin to employment.

This decision was appealed. On appeal, the Court of Appeal found that the High Court was wrong to find that the work experience placement did not amount to a relationship which was ‘akin to employment’ and should have taken into consideration other key pieces of evidence, including Facebook messages between PXM and the claimant where he tried to locate the class in which the claimant was being taught so that he could be involved in her class. The High Court also failed to acknowledge that PXM and the claimant were connected on Facebook within days of the work experience placement ending.

The Court of Appeal reconsidered both elements of the test for vicarious liability and determined that PXM’s relationship with the school was “akin to employment” however there was not a sufficiently close connection with PXM’s responsibilities during his work experience placement and the acts he committed and as such it would be unfair to hold the school vicariously liable for PXM’s wrongdoing.

The appeal was dismissed. Whilst it was held that the work experience placement was ‘akin to employment’, there was not a sufficiently close connection between his work experience responsibilities and the wrongdoing committed.

This case demonstrates that in order for a defendant to be held vicariously liable, the facts must be able to satisfy both stages of the test for vicarious liability.

However, employers should still be mindful that this approach does not mean that the employer cannot be liable for the acts of individuals on work experience and case law has shown us that an outcome is strongly dependant on the individual facts of the case. Had the wrongdoing been committed during PXM’s work experience placement, the outcome could have been different. This case has provided further guidance on how to apply the ‘close connection’ test and in particular, factors that the court will take into account.

If organisations offer work experience placements, they should consider putting a policy in place which sets out clear rules and expectations from individuals. Employers should also identify what activities the individual is undertaking during a placement and whether they amount to ‘work’. This is particularly important where a placement would permit an individual access to children or vulnerable individuals.

If you require any employment advice in respect of issues raised in this article, please contract us on [email protected].