Vicarious liability and information gathering

Part 1 - Vicarious Liability – employers’ legal responsibility for acts and omissions of workers

Part 2 – Information gathering following a workplace incident

Brooke Jacobs & Hannah Staunton

3 December 2014

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Mike Ironside

Customer Services Manager

WorkCover Queensland

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• Webinar recording and presentation will be on www.worksafe.qld.gov.au in the coming days.

• If we don’t get to all of your questions, we will collect them and publish answers on our website afterwards.

After the webinar

Brooke Jacobs

Senior Associate

HopgoodGanim

Meet your presenters

Hannah Staunton Lawyer

HopgoodGanim

Vicarious Liability – employers’ legal responsibility for acts and omissions of workers

Part 1

• Introduction – the benefit and the burden of being an employer• In the course of employment• Lepore – the High Court decision• Illegal acts – sufficient connection & done with apparent authority• Principles of vicarious liability to be distilled for employers

IntroductionThe law of negligence

Duty imposed by law to take reasonable care to avoid acts or omissions which reasonably foreseeably may injure others.

General rule – a person is not liable for the wrongdoing of another.

Vicarious liability is an exception to that rule and has 2 characteristics:

1. Liability for the negligence or breach of duty of another;

2. Strict liability – liability without proof of fault.

Introduction – continuedWhy have vicarious liability

Respondent superior – “let the master answer”— a principle of law based upon the reciprocity between the benefit and burden of being

an employer doing business for reward— a business enterprise “cannot justly disclaim responsibility for accidents which may be

fairly said to be characteristic of its activities”: Ira S Buschley & Sons v United States

Vicarious liability of employers Established common law in Australia provided acts are “in the course of employment”

• An employer operates a metal fabrication business and employs skilled operators.

• The employer provides induction and training in the use of a metal press machine. The metal press machine is fitted with guarding in compliance with Australian Standards and safety codes. There are safe work method statements for the operation of the press which are specific to each task.

• An employed operator decides contrary to training and all SWMS to remove the safety guard on the metal press to make his job go faster.

• He brings the metal press down on his co worker who is acting as a “spotter” and crushes his fingers.

• The employer has done everything right however will be found liable purely through vicarious liability for the negligent operator’s actions.

Example

• Hughes v Percival – if a duty is cast upon a defendant he cannot get rid of it by delegating its performance to a third party. He is at liberty to employ someone to fulfil the duty but remains subject to it and liable for the consequences if it is not fulfilled.

• The first thing that must be established is an employment relationship.

• In Hollis v Vabu, the High Court set out 11 tests for determining whether an employment relationship existed. The defendant employer, Vabu ,was found vicariously liable for the negligence of a bicycle courier who was an independent contractor for tax purposes. Hollis was an employee for vicarious liability purposes because he wore the uniform of Vabu and worked subject to his direction and supervision. He was an “emanation” of Vabu.

Liability for negligence of workers

• The plaintiff must establish that the employee’s wrong was committed “in the course of employment”. If the employer otherwise expressly authorised or ratified the misdeed he may be personally as well as vicariously liable.

• In contrast, if the employee acted in contravention of orders, the employer may escape liability.

• What constitutes an order and the quality and content of that order will come under some scrutiny: see Howl at the Moon

• Vicarious liability arises when an employee uses an unauthorised mode of carrying out an authorised task of his/her employment.

In the course of employment

• When will an employer not be liable for an act committed by an employee supposedly in connection with employment?

• The courts have generally accepted that an employer will not be liable when an employee is on a “frolic of his own”.

• The very old case of Joel v Morison considered the negligent operation of a horse and cart by a “servant”. The court accepted that if the servant was “without being at all on his master’s business” and instead was on a “frolic of his own” the master could not be held accountable vicariously.

Frolic

• Liability of schools for sexual assault perpetrated by teachers.

• Unsatisfactory decision of the High Court in many respects – there emerges no common theme and no authoritative answer for vicarious liability and no indication of future direction.

• Five judges said the matter should be reheard to determine whether the acts occurred “in the course of employment”.

• Four judges doubted whether a criminal act could ever fall within the scope of employment. Justice Callinan said that “deliberate conduct lies outside and indeed will usually lie far outside the scope of an employed teacher’s duties”.

Lepore v NSW

• On the other end of the spectrum, Kirby was persuaded by the Canadian idea that an employer should be vicariously liable for all the risks that flowed from its business whether they were at fault or not.

• Chief Justice Gleeson found that there will be vicarious liability for conduct is there is a close enough connection with the particular responsibilities of the employer.

• Justices Gummow & Hayne said that the conduct must be done in the intended pursuit of the employer’s interests or in pursuit of the employer’s business or apparent execution of the employer’s authority.

Lepore v NSW continued

Fraud • French v Sestili – Employer vicariously liable for employee who

stole money from a disabled client she was employed to care for.

• At first instance, the plaintiff failed because the court accepted that the employee was on a “frolic of her own”.

• However, on appeal and in reliance on the judgments in Lepore, the court found that the fact that the employee had intentionally engaged in a criminal act did not suffice to deny vicarious liability, nor did the fact that the conduct was contrary to instructions from the employer.

Liability of employers for illegal conduct

Theft • RF Brown & Co v Harrison (1927) 43 TLR 633 – Stevedores stole cargo which they

were specifically employed to handle. The ship owners were held liable to the cargo owners because the stevedores were doing that which they were employed to do, they were just doing it dishonestly.

• Compare Leesh River Tea Co Ltd v British India SN Co Ltd [1967] 2QB 250 – Stevedores employed to discharge cargo and stole the cover plate off a storm valve. During a subsequent voyage (carrying unrelated tea cargo), a storm caused damage to the tea cargo. The stevedores’ employee escaped liability because the theft of the cover plate was outside the work of discharging the previous cargo.

Illegal conduct continued

Assault • This is probably the area which causes the most contention – why should an employer

be liable for the assault committed by an employee?

• Zorom Enterprises Pty Ltd v Zabow – employer liable for the unauthorised acts of security officers in assaulting the plaintiff because they may be regarded as modes – although improper modes – of exercising authority in the course of their employment.

• Sprod v Public Relations Oriented Security Pty Limited – Security guards worked for a nightclub. They had a standard arrangement with a nearby pizza shop to provide security assistance in exchange for discounts. They “kicked in” the plaintiff’s head in an alley after he made a nuisance of himself at the pizza shop.

Illegal conduct continued

Sprod continued

• At first instance the trial judge relied on the High Court decision in Deatons v Flew and accepted that the acts of the security guards were not performed under the express or implied authority of the employer.

• The trial judge referred to Justice Gleeson in Lepore who said “where acts of physical violence are concerned the nature and seriousness may be relevant to judgment as to whether it is to be regarded as a personal, independent act of the perpetrator or within the scope of employment” and that “extreme and unnecessary violence” may indicate “pure vindictiveness”.

Illegal conduct continued

Sprod continued

• On appeal, Justice Ipp (a leading reformist) gave the leading judgment and found that the employer was vicariously liable because:

The 2 guards who perpetrated the assault in the alley acted in concert with 2 other guards who “kept watch”.

This indicated a “planned and deliberate course of conduct and not a spontaneous act triggered by personal animosity and pure personal vindictiveness”.

It was not a gratuitous unplanned act but had a great deal to do with the performance of the guards’ duties.

Illegal conduct continued

Serra v Couran Cove

• In this Queensland Supreme Court decision, the employer was not found liable vicariously for the conduct of one electrician who took a wooden bat to his fellow electrician. He struck his co worker more than 60 times.

• In that case, it was found that, whilst the plaintiff and the assailant had a long and difficult working relationship, there was no evidence that the employer’s failure to investigate, reprimand, discipline or more effectively “counsel” the assailant would have prevented the incident from occurring.

• The Supreme Court in that case focussed on the knowledge or suspicion of the assailant’s propensity for violence by examining a number of pre assault incidents.

Sprod compared to Couran Cove

• Compare Blake v JR Nominees Pty Ltd VSCA 122. In that case, one employed truck driver assaulted another on a “prank”. The truck drivers were delayed about 18 hours due to a late refuelling truck. The plaintiff sued his employer, alleging his co worker’s assault was motivated by “extreme boredom”.

• The Victoria Court of Appeal held that the employer could only be found liable if the actions by the perpetrator were:

1. expressly or impliedly authorised

2. done in furtherance of the employer’s interests;

3. so closely connected with the duties and responsibilities of an employee as to be regarded within the scope of employment.

• The actions of the perpetrator did not fall within any of the tests and his state of mind or “boredom” was irrelevant.

Illegal conduct

Howl at the Moon Broadbeach Pty Ltd v Lamble [2014] QCA 74

• Howl at the Moon is a nightclub at Broadbeach advertised as “the place where you can have the most fun with your clothes on”.

• A glassy inflicted catastrophic injuries to the plaintiff outside the nightclub.

• The glassy saw a fracas going on in the mall outside the nightclub. The manager of the nightclub was receiving a pummelling from disgruntled patrons after he ejected one of their members. There was no security present. The manager also happened to be the glassy’s uncle.

• The glassy, seeking to assist, entered the fray in the mall and struck the plaintiff in the head with the metal pole belonging to a long handled dustpan.

• Unfortunately, the plaintiff was an innocent bystander.

Howl at the Moon

Could the assault by the glassy be legally characterised as having been done in the course of his employment?

• The glassy was employed to collect glasses, clean tables and various other incidental activities. He was specifically instructed to leave security issues to security staff.

• However, Justice Muir did not accept that “such an instruction covered all possible contingencies and, in particular those in which security staff were not present or were otherwise unable to act in time to respond to an emergency”. The evidence fell short of demonstrating that the glassy had been instructed NOT to engage in conduct of the nature involved in his attack on the bystander.

• The glassy’s assault (although clearly misguided) was in the interests of protecting the manager and therefore in the course of his employment and furtherance of the employer’s interests.

Howl at the Moon continued

• It rejected the defendant’s argument that there was insufficient connection between his employment duties and the assault in the mall outside the nightclub. The attack was not random but was perpetrated by disgruntled patrons in continuum of an incident that occurred earlier inside the nightclub. Neither the manager nor the glassy were engaged in a “frolic of their own”.

• The level of violence was found not to be inconsistent with his employment, as the court accepted it was the “product of spontaneous reaction of inexperienced youth”.

• Importantly, the court emphasised that in an emergency an employee might be impliedly authorised to do an act different in kind from the class of acts which he is expressly authorised or employed to do.

Howl at the Moon continued

• Whether a loss distribution device or way of ensuring that a commercial enterprise that has the financial benefit of doing business also bears the liability cost, vicariously liability of employers is established law in Australia.

• There must be an employment relationship which as per Hollis v Vabu may be found at common law on the basis of the degree of control exercised over the worker and the ostensible authority with which the worker acts.

• The courts will scrutinise the nature of the employment duties and what if any directions were given.

• Employers may be liable for unauthorised or even illegal acts if committed in the course of furthering the employer’s interests and with sufficient connection to the employment.

Take away points for employers

Take away points continued• If anything, the cases since Lepore have demonstrated that the courts will go to

great lengths to find a “sufficient connection with employment” as opposed to a “frolic”.

• An employer may be liable for the unauthorised mode of carrying out an authorised act.

• A court may accept that in an emergency or exceptional situation an employee may be impliedly authorised to do an act different in kind from the class of acts the employee is expressly authorised to do as in Howl at the Moon.

• To negate vicarious liability, the connection with employment must be lacking as in the Blake decision concerning the truck drivers.

Time for audience participation

Polling question

Assume in a fictitious scenario that an employer employs a carpenter on a multi-story construction.

The employer will clearly be vicariously liable if, for example, the carpenter negligently places a hammer down on his scaffold rather than securing it safely in his tool belt and later (having forgotten where he put it) kicks the hammer off the scaffold, causing it to strike his co- worker below in the head.

Will the employer be liable if the carpenter, instead, takes his hammer and deliberately strikes his co worker in the back of the head?

Polling question

Assume that:

a. The carpenter is the supervisor and delivers the blow in the course of providing feedback

b. The carpenter and the co worker have a long and difficult working history

c. This is the first physically violent exchange between the pair.

Is the employer liable – yes or no?

Part 2 - Information gathering immediately following a work incident

Session summary

Part 2 – Information gathering following a workplace incident• Examples of information and documents to be collected• Tips for good statement taking • Involvement of Workplace Health and Safety Queensland• Red flags for potential common law claims• Disclosure obligations in the event a claim goes common law• Questions

Information gathering immediately following a work incident Examples of information and documents to be collected:• Photographs, diagrams and sketches• Measurements• Contact details of all witnesses• Risk assessments, SWMS, JSA• Toolbox meeting agendas and minutes• Machinery maintenance records, pre-start checklists• Training records • Documents about similar previous incidents

Tips for good statement taking:• Obtain statement as soon as possible after the

incident has occurred• Be written in first person• Be written in chronological order• Obtain statements of fact and avoid statements of

opinion• Start the interview / discussion with an open

question and then use closed questions after the person has told you their story.

Statement taking

Involvement of Workplace Health and Safety Queensland

Do I have to report an incident to WHSQ?

Work Health and Safety Act 2011

Part 3 - Incident notification

A person who conducts a business or undertaking must ensure that the regulator is notified immediately after becoming aware that a notifiable incident has occurred.

Red flags for potential common law claims

Examples include:

• Injured worker openly states he/she is going to sue• Relationship between employer and the worker has broken down• The injury was serious• The injured worker appears disinterested in RTW• The employer cannot offer the injured worker suitable duties• The employer cannot redeploy the injured worker into an alternative

Red flags continued

Tips

If you believe or have a suspicion that a worker may proceed with a common law claim, our tips to you are to:

• do everything possible to get the worker back to work and document all attempts made;

• Collate all the information discussed in relation to information gathering after a workplace incident.

Disclosure obligations at common law Documents and information that must be disclosed – section 279 of the Workers’ Compensation and Rehabilitation Act 2003 Information and documents relating to:• the circumstances of the event resulting in the injury• the worker’s injury• the worker’s prospects of rehabilitation• the nature of the injury and of any impairment or financial loss

resulting from the injury• the medical treatment and rehabilitation the worker has received• the worker’s medical history, as far as it is relevant to the claim.

Disclosure obligations at common law Documents and information that are NOT required to be disclosed - section 284 of the Workers’ Compensation and Rehabilitation Act 2003

Information and documents protected by legal professional privilege, for example:• Legal advice• Communications between a lawyer and a client or a client’s

agent

Answer to the polling questionThe results are in. The presenter’s thoughts on liability of the employer:

• This is an evolving area of the law.

• Most likely the act of striking the co worker with a hammer was not in the course of employment.

• Having said that, there remains some risk of a sympathetic court accepting that the blow in the course of providing feedback was an “unauthorised mode” of supervising.

• This is a better case for the worker than Couran Cove by virtue of the fact that the blow was delivered by the supervisor during feedback and had some (although arguable not a sufficiently close) connection with employment.

Questions?

More information

The webinar recording and presentation slides will be available at www.worksafe.qld.gov.au in the coming days.

Take a look at our other webinar and event videos on our website to learn about similar topics.