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Vicarious Liability. It’s the time of year again for the obligatory employment law article warning about the dangers of the office Christmas party!  We lawyers must have been very good this year as a present has landed right on our doorstep, in the form of the High Court (England & Wales) decision of Bellman V Northampton Recruitment Ltd.  

This decision deals with the common/case law principle of employer “vicarious liability”, which is a form of no-fault liability arising in respect of wrongs committed by another person. This commonly arises in relation to the responsibility of an employer for the actions of their employee(s).  The crucial aspect, from an employer’s point of view, is whether it can be said that, when committing an act, an employee is acting “in the course of their employment”.  If they are, the employer is responsible for the conduct of the employee.  The law in this area is very similar, both north and south of the border, with this decision therefore being, at the very least, persuasive in Scotland.

The Party and its Aftermath

Back in December 2011, the company’s Christmas party was held at a local golf club and Mr Bellman (a Manager) was in attendance.  So too was Mr Major, who was a Managing Director and Shareholder of the company.  As can sometimes happen at such events, significant volumes of alcohol were consumed to help people get into the swing of things.  After the party, around half of the guests went onto the Hilton Hotel for a few night caps but this was not a pre-planned extension to frivolities but rather an “impromptu drink”.  However, the company did pay for taxis to the hotel.               

Mr Major, no doubt a wee bit worse for wear, decided 3am would be an opportune time to bring up his current views on recruitment and deployment, with a group of employees.  Mr Bellman, in a calm and reasoned fashion, then challenged a statement made in respect of the deployment of a particular employee.  Mr Major took objection to this stating; “I f****** make the decisions in this company, it’s my business.  If I want him based in Northampton he will be f****** based there”.  Certainly not textbook management and Mr Bellman may well have been content to leave matters there.  However, unfortunately, that was not the end of things for Mr Major, who then proceeded to assault Mr Bellman to his serious injury.       

Following on from this, a decision was taken by Mr Bellman to sue the company rather than the Director personally, on the basis that it was vicariously liable for Mr Major’s conduct.  The question for the court to determine therefore was whether the Director was, at the time the fateful blow was struck, “acting in the course of his employment”.  Mr Bellman sought to argue that the Hilton Hotel drinks were a seamless extension of the Christmas party, with the relevant discussion not only being work related but with Mr Major also seeking to assert himself as a Director.

High Court Outcome 

It was found that Mr Major was a Director and clearly saw himself as being in overall charge of most aspects of the business.  This included the provision of benefits such as the Christmas party and it was also at his discretion that the party, drinks and subsequent taxis were paid for by the company.  However, this did not mean he was always “on duty” when in the company of staff members.  It was also found that the assault took place after the organised aspect of the work event and could not therefore be said to be a simple extension of it.  Additionally, it was clear that discussions did not simply focus on work matters and the fact the assault followed such work discussion, did not afford a sufficient enough connection to the employment. What occurred arose in the context of “entirely voluntary and personal choices” by those present to engage in a heavy drinking session.  As a result, Mr Major was not to be regarded as acting in the course of his employment, and Mr Bellman’s claim was therefore unsuccessful.

Comment

The High Court were no doubt wary of extending the situations where the principle of vicarious liability might apply and effectively confirmed that “course of employment” should only extend to work related events (which the Hilton Hotel session was not).  It appears quite clear, however, that if the event had taken place at the golf club, liability would have attached to the employer on established principles. Moreover, Employers should also note that the Court emphasised that each case must be examined on its own facts and the case does not establish that post-Christmas party drinks are inevitably outside the scope of employment.  The ultimate test will be whether there is a sufficiently close connection between the position of the employee and the conduct to make it fair and just for the employer to be held liable.

While the principle of vicarious liability is founded in common law, such claims can also be made under discrimination/Equality Act legislation.  Employers should also be aware that the test for vicarious liability under this legislation has, in some cases, been interpreted more widely that the common law test.  Under the Equality Act, there is a statutory defence available if the employer can show it took all reasonable steps to prevent the perpetrator performing any act of a discriminatory nature.  Such reasonable steps would include an additional review of relevant; diversity, equal opportunities and other anti-discrimination policies, as well as ensuring employees have sufficient (and recorded) training around this. 

Needless to say, it is also recommended that employers actively take steps to mitigate against the risk of violence, and other forms of threatening behaviour, in the workplace (which, of course, should encompass work related events).  This should be done by reviewing/updating relevant disciplinary policies and thereafter bringing them to the attention of staff.  

With a comprehensive review of such policies perhaps unlikely before this year’s Christmas night out, other measures can be taken if such behaviour is a concern.  Employers will no doubt not want to be seen as “party-poopers” but perhaps a gentle but firm  reminder, that it is a work event and therefore normal standards of behaviour are expected, may be worthwhile.  Doing this should hopefully leave staff in little doubt of the standards expected and, along with appropriate policies, justify disciplinary action if the offending conduct is serious enough.

 

If you have any queries in relation to the above please get in touch with a member of the Stronachs Employment Team.                                  

Euan Smith, Associate

 

Chambers UK 2018

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