Vicarious liability - Tort committed in the course of employment

Learning Outcomes

After reading this article, you will be able to identify when an employer is vicariously liable for torts committed by an employee, explain the tests for distinguishing employees from independent contractors, and apply the 'course of employment' and 'close connection' principles to real-world scenarios. You will also be able to analyse intentional and criminal acts in this context and answer SQE1-style MCQs on this topic.

SQE1 Syllabus

For SQE1, you are required to understand vicarious liability from a practical viewpoint. Focus your revision on:

• the definition and rationale for vicarious liability in tort
• the tests for identifying an employment relationship (employee vs independent contractor)
• the requirements for a tort to be committed “in the course of employment”
• the application of the “close connection” test, especially for intentional or criminal acts
• the distinction between personal and vicarious liability, and the potential for employer indemnity

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which three elements must be present for an employer to be vicariously liable for a tort?
2. Which of the following is NOT a relevant factor in distinguishing an employee from an independent contractor? a) Who provides equipment
   b) Who sets working hours
   c) Whether the worker wears a uniform
   d) Whether the worker bears financial risk
3. True or false? An employer can never be vicariously liable for an employee’s criminal act.
4. What is the “close connection” test and when is it applied?

Introduction

Vicarious liability is a principle in tort law that holds one party responsible for the torts committed by another. In the employment context, it means an employer may be liable for torts committed by an employee during the course of their employment. This doctrine is rooted in policy: employers are better placed to bear the risk and compensate victims, and are expected to supervise their workforce.

Key Term: vicarious liability Vicarious liability is the legal principle that makes one person (usually an employer) liable for torts committed by another (usually an employee) in the course of employment.

The Three Requirements for Vicarious Liability

To establish vicarious liability, three elements must be satisfied:

1. There must be an employment relationship (employee, not independent contractor).
2. The employee must have committed a tort.
3. The tort must have been committed “in the course of employment”.

Each element is explained below.

1. Employment Relationship

The employer is only vicariously liable for torts committed by employees, not independent contractors. The courts use several tests to distinguish between the two.

The Control Test

This test asks: does the employer have the right to control how the work is done, not just what is done? If so, the worker is more likely to be an employee.

The Incorporation (Organisation) Test

This test considers whether the worker is incorporated into the business (employee) or merely provides services as an accessory (contractor).

The Economic Reality (Multiple) Test

This is the modern approach. The court considers all relevant factors, including:

• Who pays wages and deducts tax/NI?
• Who provides equipment?
• Who bears the risk of profit or loss?
• How is the work scheduled and supervised?

Key Term: employee An employee is a person who works under a contract of service, subject to the employer’s control and incorporated into the business.

Key Term: independent contractor An independent contractor is a person who works under a contract for services, running their own business and not subject to the employer’s control.

2. Employee Must Have Committed a Tort

There can be no vicarious liability unless the employee has committed a tort. The most common is negligence, but vicarious liability can apply to any tort (e.g., battery, fraud).

3. Tort Committed in the Course of Employment

The employer is only liable if the tort was committed “in the course of employment.” The courts have developed several principles to determine this.

Authorised Acts and Unauthorised Modes

If the employee is doing what they are employed to do, but in a careless or unauthorised way, the employer is usually liable.

Prohibited Acts

If the employee does something expressly forbidden, the employer may still be liable if the act was a wrongful way of doing an authorised job.

Frolic of One’s Own

If the employee is acting outside the scope of their employment (e.g., on a personal errand), the employer is not liable.

Key Term: course of employment Acts done by an employee in the performance of their duties, or closely connected to those duties, so as to make it fair and just to hold the employer liable.

The “Close Connection” Test

For intentional or criminal acts, the courts use the “close connection” test: was the wrongful act so closely connected with the employee’s duties that it would be fair and just to hold the employer liable?

Worked Example 1.1

A delivery driver is employed to deliver parcels. During a delivery, the driver carelessly reverses and injures a pedestrian. Is the employer vicariously liable?

Answer: Yes. The driver was performing their authorised duties (delivering parcels) in a negligent way. The tort was committed in the course of employment.

Worked Example 1.2

A nightclub bouncer, employed to maintain order, assaults a patron after ejecting them from the club. The assault occurs just outside the entrance. Is the employer vicariously liable?

Answer: Likely yes. The assault was closely connected to the bouncer’s duties (maintaining order and ejecting patrons). The “close connection” test is satisfied.

Worked Example 1.3

A shop assistant, angry at a customer’s rudeness, follows the customer into the car park after their shift and punches them. Is the employer vicariously liable?

Answer: Unlikely. The assault was motivated by personal anger and occurred after work, not in the course of employment. The connection to employment is too remote.

Exam Warning

For SQE1, pay close attention to the facts: the employer is not liable if the employee is on a “frolic of their own” or acting for purely personal reasons. However, liability may still arise for intentional or criminal acts if there is a close connection to the employee’s duties.

Intentional and Criminal Acts

Employers can be vicariously liable for intentional or criminal acts if the “close connection” test is met. This is especially relevant for torts such as assault, fraud, or sexual abuse committed by employees in positions of authority or trust.

Indemnity and Joint Liability

If an employer is found vicariously liable, they may seek an indemnity from the employee (i.e., recover damages paid to the claimant) in some circumstances. Both employer and employee are jointly liable to the claimant.

Summary

Key Point Checklist

This article has covered the following key knowledge points:

• Vicarious liability holds employers liable for torts committed by employees in the course of employment.
• The distinction between employees and independent contractors is essential; only employees trigger vicarious liability.
• The “course of employment” includes authorised acts, unauthorised modes, and some prohibited acts, but not personal “frolics.”
• The “close connection” test is used for intentional or criminal acts.
• Both employer and employee may be jointly liable; employers may seek indemnity from employees.

Key Terms and Concepts

• vicarious liability
• employee
• independent contractor
• course of employment