When might employers be liable for an employee’s wrongdoing?

The principle of ‘vicarious liability’ is a legal concept that holds employers responsible for the actions of their employees when those actions occur within the scope of their employment. The scope of the liability is continually evolving, with the most recent Supreme Court case of Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB shaping the scope of employers’ responsibility.

What is the legal test for vicarious liability?

The 2020 cases of both Morrisons and Barclays Bank established a two-stage test to determine whether an employer is liable: –

  1. The ‘relationship test’ – whether the relationship between the employer and the wrongdoer was one of employment or close enough to employment.

If a genuine employment relationship is established, whereby the wrongdoer was acting in the course of business, the employer might be held vicariously liable. This also means that the principle may extend to workers and agency workers.

  1. Thesufficient connection test’ – whether the ‘wrongful conduct’ can be fairly and properly regarded as being done by the employee while acting in the course of their employment.

Under this second test, for an employer to be liable, there must be a sufficient connection between the wrong committed and the employee’s role and duties to make it fair to hold the employer vicariously liable. If the unlawful act is deemed to not be sufficiently close to what the wrongdoer was authorised to do, vicarious liability cannot be attached to the employer.

The landmark Morrisons case for employers’ vicarious liability suggested that if the action undertaken by the employee did not fall under their ‘field of activities’, i.e. by acting in the course of their employment, then the employer cannot be held liable. The application of the second stage of the test was challenged again in the recent Supreme Court case of Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB.

Case summary

On 26 April 2023, the Supreme Court handed down their judgment in Barry Congregation and confirmed the boundaries of vicarious liability.

In this case, the Supreme Court held that the Jehovah’s Witness organisation was not vicariously liable for the rape of a member of its congregation committed by an elder, at his home, after they had been out evangelising together.

While the relationship between the organisation and the elder resembled employment, the Court determined that when applying the ‘sufficient connection test’, the act was not related to his employment. As such, the organisation could not be held vicariously liable for the actions of the elder.

Reducing the risk of vicarious liability

To mitigate the risks of vicarious liability, employers need to take proactive measures to show they took all reasonable steps to try to prevent the wrongdoing. Measures may include:

  • Having well-drafted policies and procedures which are communicated to employees regarding acceptable behaviour, use of employer resources, data protection and confidentiality.
  • Establishing a clear process for reporting any suspected wrongful acts or breaches of polices. The repercussions for employees who are found to have breached employment policies should also be clearly stated.
  • Making sure employees are aware of the policies and procedures through regular training to improve awareness and understanding of expectations and standards.

Take home points

The judgment of Barry Congregation demonstrates that the test for vicarious liability will be determined on careful consideration of the facts that link the wrongful conduct to the employee’s activities. Ultimately, any mitigating measures put in place by the employer, as outlined above, will aid to reduce the risk of an employer being held liable. Therefore, if you require any advice on the processes and procedures your organisation currently has in place, please get in touch with our Employment Team at employment@herrington-carmichael.com who will be happy to assist.

Darren Smith
Partner, Employment
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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