Who's liable? Employer or employee?

Who’s liable? Employer or employee?

The scope of vicarious liability for employers has raised its’ head again and, interestingly, the Court of Appeal found last week in the matter of Clive Bellman v Northampton Recruitment Limited that despite wrongful conduct occurring outside of the workplace and outside of office hours, the Respondent company was vicariously liable for the actions of its managing director.

Background

Clive Bellman was employed as a sales manager by the Respondent. In 2011 he attended the company Christmas party.  Alcohol was supplied at the party on a tab, paid for by the company.  Around midnight the party came to an end but some members of staff stayed to drink at the hotel bar. The court was advised that this was not a pre-planned extension.

Around 3am, a few members of staff, including Mr Bellman, remained. Conversation turned to a new office hire who they felt was being paid substantially more than anyone else. John Major, managing director, became annoyed at being questioned about this and stated “I f**king make the decisions in this company, it’s my business.”

Mr Bellman disagreed with this and Mr Major proceeded to strike Mr Bellman twice, causing him to fall backwards onto marble flooring, knocking him unconscious.  Mr Bellman suffered traumatic brain damage as a result of this event.

The High Court Decision

In 2016 the High Court ruled that Northampton Recruitment was not liable for Mr Major’s actions. The presiding Judge viewed the after-party as an entirely separate event of a different nature to the Christmas party and therefore unconnected to the business.

Mr Bellman appealed this decision to the Court of Appeal.

The Court of Appeal Decision

The Judges unanimously agreed that Northampton Recruitment was liable for the actions of Mr Major during the after-party.

They commented that Mr Major was exercising his position as managing director, “delivering a lecture to his subordinates” and “exercising the very wide remit” that the employer gave him, despite the time and place. There was sufficient connection between the managing director’s activities and the assault to render it just that the Respondent company should be liable.

Comment

This case has given further guidance on when an employer may be liable for the actions of its’ employees and supports the growing trend of a move towards finding employers vicariously liable for the actions of their employees.

However, whilst on the face of things this decision appears to substantially widen vicarious liability and potentially cause huge issues for employers, you should remember that liability will not arise simply because there is an argument about work matters between colleagues. The outcome of any case will be very much dependent upon the specific facts of each situation.

As an employer you should be aware that a court is likely to look broadly at the situation, a difference between a planned work party and after-parties/impromptu event is unlikely to have a significant impact. The court is likely to go further and examine the nature of the role of the person involved and whether that role was engaged during any incident.  Even though an employer would not expressly authorise actions such as assault, if, as in this case, the individual is acting within their authority, it is likely that vicarious liability will follow. Further, where the employee is in a senior position with wide ranging responsibilities, they are more likely to be treated as having acted on behalf of the company.

It is advisable to consider having policies and procedures setting out your expectations of staff behaviour, not only at work social events but also individual behaviour when they are representing the business in any capacity, but particularly if acting in a senior position. Also remember it is not enough to just simply have a policy, staff should be made aware of and trained in your policies and procedures.