Employer's vicarious liability: unauthorised acts of employees

by Stephanie Zillman07 Aug 2012

A decision by the Victorian Court of Appeal has highlighted the largely uncertain area of law concerning an employer’s vicarious liability for the unauthorised acts of its employees.

In a case which has dragged on for more than a decade, the decision in Blake v JR Perry Nominees Pty Ltd [2012] VSCA 122 has reiterated that an employer is not liable for the unauthorised actions of its employees, within the workplace, so long as the action was beyond its reasonable control.

On 16 October, 2001 an incident took place at the Portland Docklands in Melbourne, following the assembly of truck drivers the previous night to refuel a tanker early in the morning. However, the tanker was delayed, and truck drivers were left waiting for 18 hours, long into the afternoon. The drivers were unable to leave their trucks for prolonged periods and had little to occupy themselves. In the afternoon, a driver who was employed by JR Perry struck another driver hard on the back of the knees, in what was described as ‘practical joke’ by the employee. However, the driver who was struck fell to the ground and severely injured his back.

According to commentary by legal experts at Dibbs Barker, it was the injured driver’s submission that JR Perry was vicariously liable for the damage he suffered at the hands of their employee, because the individual was motivated by boredom. The submission centred around the proposition that the injury would never had occurred but for the boredom suffered by the drivers prior to the incident, therefore causing him to play a ‘practical joke’.

The Judge found that it was common for truck drivers to play various practical jokes on each other during prolonged periods of inaction. In turn, it is common for employers such as JR Perry to not have an express prohibition against such behaviour in their workplace policies. Drivers are simply required to remain with their vehicles. The Judge labelled the notion that the employer should have arranged entertainment to prevent employee boredom as “absurd” and said that citing ‘boredom’ as the chief motivator for the actions of the employee was a speculative assumption.

In the appeal decision, several tests were discussed to determine whether vicarious liability should stand, and the judge found that the injured driver failed to prove that JR Perry ought to be held vicariously liable for the conduct of its employee. The Court highlighted that in order to establish vicarious liability, the act must be committed:
 

  1. by an employee both in the course of employment and within their scope of authority; and
     
  2. as an act the employee was employed to carry out or an act which was regarded as within the scope of his employment (associated to his employment).

Therefore, vicarious liability is established only where the act of the employee:
 

  • was expressly or impliedly authorised by the employer; or
     
  • was subsidiary to the duties/responsibilities of the employee (associated to his employment therefore within the scope of employment); or
     
  • was executed for the employer's interests.

It was found that while there wasn’t an express prohibition on pranks, there also wasn’t any evidence to suggest the employer had condoned such behaviour. As a result it was decided that the action of the employee had not been expressly or ostensibly pursued in the execution of the interest of JR Perry's business.

Key takeaway

The upshot of this case is that an employer should not be found vicariously liable for workplace incidents arising out of unauthorised acts of its employees which are beyond its reasonable control.

 

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