Is your employees' mistake your liability?
Vicarious Liability: (Held liable for the employee's conduct)
Vicarious liability means indirect liability. It arises in cases where the liability of a person’s actions falls on someone else due to the degree of control he exercises on the person accused of misconduct. In the area of employment, the liability of an employee’s acts may fall on the employer.
However, there are certain other areas too where there is some form of liability of the person who is in control like in the case of children where the parents are under control. There have been a vast number of cases where the employers have been held liable for the mistakes of their employees. Employer's liability for the failure or misconduct of employees is based on the concept of 'respondeat superior'. which is a Latin term meaning the superior will be held answerable. Here, the key thing to mark is that even if the employee is directly liable for the conduct, the employer too may be vicariously or indirectly liable. The cause of this liability is the special relationship that exists between the two parties. The underlying principle is that the worker or the employee is under the control of the employer and so he is acting on the employer's behalf and therefore the liability of the employee's negligence falls on the employer. Moreover, it is the employer's responsibility that the employees are properly trained to do their job and to ensure they do not do it carelessly.
To establish vicarious liability a number of factors have to be established. Employers cannot be held liable in every case where an employee may have shown negligent conduct. The necessary conditions to prove vicarious liability should exist for vicarious liability to be proved. The requirements to be established in case of vicarious liability are as follows:
- The tortfeasor should be an employee and not an independent contractor.
- the employee should have committed a tort and the tort should have been committed in the course of the employment.
The higher the degree of control an employer exercises over the employee, higher would be the chances that he will be held liable for the employee's conduct. As it generally happens, the degree of control exercised by the employers is higher in case of employees than in the case of independent contractors.
In cases where the required relationship has been established, it is still essential that the other necessary conditions are met. It is essential to prove that tort has been committed within the scope of employment. A defendant will be vicariously liable only when the tort has been committed within the course of employment. Suppose an employee caused a damage to somebody's car while driving the company's vehicle in the course of delivery. In such a case the employer will be held liable. However, if the employee is driving his own or company's vehicle and taking his kids to school or to make a 'frolic of his own', employer is not liable (See Storey V Aston). The task the employee is carrying out should fall within the course of his employment. However, the employer will be vicariously liable even if the employee acted in a way that was expressly forbidden by the employer during the course of his employment.
Storey V Aston:The driver had finished the day's deliveries and took a different route to visit his brother in law. The task was his personal and outside the course of his employment. The accident that occurred in this way fell outside the course of his employment and the employer was free of vicarious liability. Despite being a minor detour it was held that the driver was carrying out some personal business not sufficiently related to his employment.
Another important point worth noting is that the employers are responsible only for the torts committed by the employees and not by independent contractors.
How to decide if the person is an employee or an independent contractor?
The facts that are weighed to determine if the person is an employee or an independent contractor generally fall within three categories.
Behavioral: Does the company control what is done and how it is done? The degree of control decides whether the person is an employee or an independent contractor. If the company decides what is done and how it is done, the person is an employee. The degree of control is low in case of the contractors who are free to choose how they do the work and what they do. In case of contractors the employer may have control over the results of the work but not over what is done and how it is done.
Financial: Does the payer control the business aspects of the job like for the tools and supplies? If yes, the worker is an employee, otherwise he is a contractor.
Type of Relationship: Are written contracts of employment or employee benefits like pension plan, paid vacations included? These factors are generally included in case of the employees. There are also a number of defenses to vicarious liability that the employers can use.
- Worker was not an employee under the employer's control.
- The employee was not acting within the scope of employment.
- Employer had provided proper training to the employee to prohibit careless or objectionable behavior.