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Vicarious liability (and how to avoid it)

Employment law focus on ….. vicarious liability

So, what is vicarious liability?

Imagine a scenario. David owns a home improvements business in which he employs Adam and Darren. Darren believes that Adam is gay, and while working on customer premises away from David’s view, subjects Adam to homophobic banter. As we’ve said many times, one person’s banter is another’s harassment (see the video here.)

Eventually Adam resigns and brings a claim against Darren and against David, who had no idea about the harassment until after Adam left and brought his claim. Adam argues that David should have done more to stop Darren harassing him and says that David didn’t take the sort of reasonable steps an employer should take to educate employees like Darren. Had he done so, argues Adam, Darren might have thought twice before engaging in, in this case, homophobic ‘banter’.

If his claim succeeds, the court will conclude that the employer David is vicariously liable for Darren’s actions, and David will potentially pay a compensation award, and have a finding of unfair dismissal recorded against his business.

Real cases of vicarious liability

Let’s have a look at a couple of real examples, the first made it to the Supreme Court where the respondent, Morrison Supermarkets, was found not to be vicariously liable. The second, a tribunal case judged Carphone Warehouse to be liable.

WM Morrison Supermarkets plc v Various Claimants, vicarious liability not found

Mr Skelton felt somewhat aggrieved to have been disciplined by his employer, and so took it upon himself to share the personal information of around 126 000 Morrisons’ employee’s payroll data on the internet. Pleased with his achievements, he also shared the information with three newspapers.

His jape cost Morrison 2.6m dealing with the immediate fallout. To boot, the High Court and Court of Appeal held that Morrisons was vicariously liable for his actions, since there was a sufficient connection between the position in which Mr Skelton was employed, and his wrongful conduct.

The silver lining for Morrisons appeared when the Supreme Court decided that Mr Skelton’s role did not include disclosing data on the internet. They also concluded that it was not an act that he was authorised to do. Had his breach been accidental, Morrisons almost certainly would have been liable.

And what of Mr Skelton? 8 years at Her Majesty’s pleasure may have been time enough to reflect on whether the mass dumping of his colleagues’ personal details was really a good idea. No winners in this one!

O Vs Carphone Warehouse, vicarious liability found

Another banter case….. During a workday, two employees hacked the Facebook account on Mr O’s phone, which he had left unattended. Pretending to be Mr O, they posted that he had ‘come out the closet and was gay and proud’.

Shortly afterwards for an unrelated offence, the real Mr O was dismissed for gross misconduct. Following his dismissal, he made numerous claims, including unfair dismissal, direct sex discrimination and harassment on the grounds of sexual orientation.

The tribunal found that as the actions were done at work, during working hours and involved dealings between staff and their manager, this matter fell ‘within the course of the employment’.

The tribunal also stated that the test for whether an employer can be found liable in these circumstances is whether the employment relationship and workplace of the parties gave them the opportunity to do what they did, and they found that was the case here.

Mr O won the claim for unfair dismissal, and the employer was found to be vicariously liable for harassment on grounds of his sexual orientation, one of the 9 protected characteristics.

Vicarious liability help and support from myHRdept

So, what can employers do to protect themselves against vicarious liability claims?

  1. Have a policy (all myHRdept handbooks have an Equal Opportunities and a Dignity at Work policy)
  2. Train /educate employees (myHRdept Client Area has information videos for both policies, and our training schedule has virtual and FTF training in harassment. Retained clients can offset support hours against training)
  3. Refresh your training – once a year at least – case law has shown that tribunals are unlikely to regard training as ‘up to date’ if it is more than a year old
  4. Deal properly with transgressions – having a log of previous investigations and actions showing that transgressions have been properly dealt with will greatly help defend future allegations (myHRdept support hours can be used for investigations/hearings etc.)
  5. If a harassment complaint is upheld, consider more training – employers should ask whether the training has been effective if an employee subsequently harasses another.

If you’re thinking of outsourcing your HR or employment law needs, why not contact myHRdept? Call us on 01628 820515, email us at enquiries@myhrdept.co.uk to discuss your requirements, or contact us via our website and we’ll call you back.

Homepage: www.myhrdept.co.uk

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