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High Court takes new approach to vicarious liability of employers

High Court takes new approach to vicarious liability of employers

For many years our legal system has grappled with drawing a clear line in determining the liability of employers for the negligence of employees. The recent High Court decision of Prince Alfred College v ADC has clarified the Court’s approach to what is a tricky area of law.

The test previously used by Courts was to consider whether the negligent acts were committed by an employee in the usual course of their work. Applying this test requires other questions to be answered first, such as:

  • Was the person acting as an employee or contractor?
  • Was the act committed in the performance of their usual duties?

Applying the usual test, employers have been found liable for the actions of persons deemed to be their employee and who wrongfully performed their duties. However, the Prince Alfred College matter highlights the difficulty in applying the usual test to novel cases, especially those involving criminal acts or intentional wrongdoing.

Prince Alfred College involved proceedings brought by a former pupil seeking compensation from the school for sexual abuse inflicted by their boarding master. In such a case, it is clear that the person was acting as an employee but less clear that the abuse occurred in the “usual course of employment”.

The High Court noted the limitations of the usual test and cautioned against its application as a hard and fast rule to determine liability. Instead, the Court preferred to characterise the usual test as a “touchstone” for considering whether an employer is vicariously liable.

In their judgment, the majority found that an employer will not be found to be vicariously liable merely because employment provided the opportunity or occasion for wrongdoing. A key feature of the approach taken by the majority was considering whether the employer has assigned the employee to a special role that placed them in a position of power and control with respect to the complainant.

Although the Court found that the employer in Prince Alfred College was not liable, the status of the “usual course of employment test” has been downgraded from a rule to a “touchstone” for determining liability. It remains to be seen whether such fine grained distinctions will result in employers being found to be vicariously liable more or less often. However, the decision serves to remind all employers to consider the possibility of being held liable for the actions of employees entrusted with duties that place them in a position of power and control over others.

Whether you an employer or employee, the team at Just Us Lawyers have decades of experience in employment law and can guide you through the system to ensure you get the best outcome, call/email Just Us Lawyers

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