Vicarious liability is a legal doctrine in Australia that holds one party responsible for the wrongful actions of another party. This is the case even if the party held legally responsible did not commit the wrongful act themselves.
Under this doctrine, an employer can be held liable for the actions of their employees that are carried out within the scope of their employment. For example, vicarious liability occurs when:
- A delivery driver runs over an old woman while making a delivery. In this case, the rider's employer could be held vicariously liable for the damages caused to the old woman.
- An employee engages in sexual harassment or discrimination against a co-worker during employer-sponsored events such as Christmas parties, business or field trips. The employer could be held vicariously liable for any resulting harm or damages to the harassed or discriminated employee in such cases.
Vicarious liability is an important legal concept in employment law matters because it allows victims of wrongful acts to seek compensation. This is the case even if the responsible party does not have the financial means to provide compensation. It also serves as a deterrent to employers who might otherwise be tempted to ignore improper behaviour by their employees.
Employers may also be liable under the common law principle referred to as 'strict liability'. Strict liability requires that defendants be held accountable for damages regardless of whether they were negligent or acted intentionally. If they did something, they are held responsible for it no matter the circumstances.
1. Racial Discrimination Act 1975
The Racial Discrimination Act 1975 governs unlawful discrimination against someone on the basis of race, ethnicity, nationality, or immigrant status. The Act aims to promote equality and eliminate racial discrimination in Australian society.
The Act also establishes the Australian Human Rights Commission, which is responsible for investigating complaints of discrimination and promoting human rights in Australia. In fact, Section 18C of the Racial Discrimination Act states that:
"It is unlawful for a person to offend, insult/humiliate, or intimidate a person or a group of people and the act is done because of the race, colour or national or ethnic origin of the person or some or all of the people in the group"
2. Sex Discrimination Act 1984
The Sex Discrimination Act 1984 prohibits discrimination on the grounds of sex, marital status, pregnancy, or potential pregnancy, and sexual harassment. It also provides for the establishment of the Sex Discrimination Commissioner.
The Sex Discrimination Commissioner is responsible for promoting gender equality and investigating complaints of discrimination or harassment. In fact, Section 106 of the Sex Discrimination Act states that an employer has vicarious liability if his/her employee commits discrimination in:
- Work areas
- The provision of goods and services
- Accommodation (for instance, refusing a mother to breastfeed in a park bench)
Vicarious Liability: What About Contractors?
Contractors are entirely different from employees since they are considered independent parties rather than employees. Contractors are often hired for specialised work or projects that are outside the expertise or capabilities of the hiring party. For example:
- A construction company may hire a plumbing contractor to install plumbing systems in a new building; or
- A marketing firm may hire a graphic design contractor to create advertising materials.
Here are some more factors that distinguish contractors from employees:
- Provide quotes/reports for completion of a specific job
- Assign their job to someone else
- Have their own tools and equipment for the role and do not seek reimbursement for its purchase
- Accept legal liability for their own work
- Pay their own taxes
- Organise their own superannuation
- Receive salaries or work on commission
- Are not allowed to assign their tasks to others
- Receive their tools and equipment from their employer and are reimbursable
- Do not assume legal liability for their work
- Get paid sick leave and holidays (In some cases, contractors can still have paid sick leave and holidays)
- Have their superannuation managed by their employer
However, in some circumstances, a principal contractor (the party that hires the contractor) may have vicarious liability for the actions of the contractor or their employees.
For example, a principal contractor hires a subcontractor to perform work. The subcontractor's employee then causes harm or damage to someone else while carrying out that work. As a result, the principal contractor may be held vicariously liable for the harm caused.
This is because the principal contractor has control over the work being performed. Moreover, they also have the responsibility to ensure that the work is carried out safely and in accordance with the law.
How Do You Defend a Vicarious Liability Claim?
1. Review the Facts of the Claim
Firstly, it's important to gather all relevant information about the alleged wrongful act. This may include what happened, when it happened, and who was involved. This step may also involve gathering:
- Personnel files
- Witness statements
- Relevant documents
- CCTV footages (if applicable)
2. Check if the Act Was Done Within the Scope of Employment
Secondly, the employer must find out if the employee acted within the scope of their employment. This means that the employee must have been performing duties that are incidental to their employment.
The employer does not have vicarious liability if the employee was acting outside the scope of their employment. For instance, an employee harassed or discriminated against a person who is:
- Not a co-worker; and
- Is outside of the workplace
3. Take Reasonable Steps to Stop/Address the Wrongful Act
Thirdly, an employer must have taken reasonable steps to prevent the employee from conducting the act. This may involve demonstrating that the employer:
- Had policies and procedures in place to prevent the type of conduct that occurred
- Was properly trained and supervised
- Conducted an internal complaint handling process to address the employee's conduct once they became aware of it.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.