First published in The Bermuda Chamber Of Commerce Newsletter (Chamber Insider) December 2018
With the holiday season fast approaching and with it the obligatory work related holiday parties, a recent ruling in the UK regarding the vicarious liability of an employer in respect of an injury caused at a work party may prove to be pertinent.
The background to the decision involved an unplanned after party following a work organised Christmas party. The company's managing director arranged transportation to the after party and the drinks consumed were mainly paid for by the company. During the after party, an argument broke out regarding a new employee's appointment and salary. The managing director, addressing the argument, spoke on his authority for the hire and when questioned by an employee the managing director responded by punching the employee, which led to the employee's traumatic brain damage.
The issue before the English Court of Appeal was whether the company was vicariously liable for the managing director's actions. In simplified terms, vicarious liability refers to a situation where someone is held responsible for the actions or omissions of another person. In a workplace context, an employer can be liable for the acts or omissions of its employees, generally provided it can be shown that they took place in the course of their employment. The Court of Appeal decided that question in the affirmative, given the managing directors position.
The decision turned on two key questions: (i) the nature of the managing director's role and (ii) whether there was sufficient connection between the managing director's job and the wrongful conduct to render vicarious liability appropriate.
The managing director was an owner of the company, was its most senior employee and was the directing mind and will of a relatively small company. He had responsibility for all management decisions including the maintenance of discipline and he would have seen the maintenance of his managerial authority as a central part of his role. When the managing director chose to address the argument, he did so in his capacity as managing director, establishing his authority as such. Together with the fact that the event was an after party of a work organised event, where the company paid for the transportation and drinks, the Court found that there was a sufficient connection between the managing director's wrongful conduct and his role and as such the company was vicariously liable for the managing director's actions. While an extreme example, this case illustrates the principle that misuse of authority can occur out of work hours or when parties are off-duty, particularly by someone in a senior position. It remains to be seen how this premise will be applied to similar scenarios by the Bermuda Courts.
This note is intended as a high level overview of this topic. Legal advice should always be sought on a case by case basis.
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