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Vicarious liability: for whom should the ‘employer’ be liable?
Published online by Cambridge University Press: 02 January 2018
Extract
The nature of employment is changing and this brings with it the need to reconsider the rules of vicarious liability as to those for whom an employer should be liable. In recent years government policy indicating the preferred nature of the employment market has brought about considerable changes in employment practices and these have been reflected in employment law. Not only has there been a drift towards self employment but also a rise in such categories as casual workers, agency workers and trainees, and at the same time there has been a rise in legalism in employment law which has produced a number of technicalities specific to that subject. Undue concentration on the contract of employment and the rise of the concept of mutuality of obligation mean that we now have a view of the nature of ‘employment’ which is skewed towards the demands of employment law and the policies embedded therein.
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References
1. See for example McKendrick ‘Vicarious Liability and Independent Contractors-A Re-examination (1990) 53 MLR 770 where it is argued that the responsibility of employers should be extended beyond employees by the expansion of the primary liability of the ‘employer’. For a discussion of the problem in relation to employment law see Collins ‘Independent Contractors and the Challenge of Vertical Disintegration to Employment protection Laws’ (1990) 10 OJLS 353.
2. For example in the recent radical decision of the High Court of Australia in Burnie Port Authority v General Jones Pty (1994) 120 ALR 42 it was said that there are a number of instances where there is a duty in negligence to see that care is taken which cannot be fulfilled merely by appointing a competent contractor. By this means it is said that the principle of non delegable duties will render unnecessary the strict liability rules relating to fires and the principle in Rylands v Fletcher, and no doubt could also affect liability for the acts of independent contractors in other areas.
3. [1924) 1 KB 762.
4. The argument goes thus: who is a servant?-a person the employer can control. Who can the employer control?-a servant.
5. [1968) 2 QB 497.
6. Market Investigations v Minister of Social Security (1969) 2 QB 173. This test was endorsed by the Privy Council in Lee v Chung (1990) 2 WLR 1173.
7. [1983) ICR 728; noted (1984) 13 ILJ 62 (P Leighton).
8. On mutuality of obligation see also Hillyer Bros v McLeod (1987) ICR 526 where it was held that there was no umbrella contract in relation to trawlermen who had sailed for the same company for several years on successive voyages.
9. The applicants had applied for interim relief under the Employment Protection (Consolidation) Act 1978, s 78 for which they might have qualified if they were employed under a contract of employment even for the short periods when they were actually working.
10. Young and Woods Ltd v West (1980) IRLR 201.
11. Market Investigations Ltd v Ministry of Social Security (1969) 1 QB 173.
12. On this point see Lee v Chung (1990) 2 WLR 1173 where a casual building worker was regarded as an employee, the reason being that he ran no commercial risks save that of being unable to find employment. On the other hand in Hall v Lorimer (1994) IRLR 171 (a tax case) a casual vision mixer was regarded as an independent contractor even though he did not supply any tools of his own or take any financial risks. See also two cases where musicians were held to be independent contractors: Addison v London Philharmonic (1981) ICR 261 and Midland Sinfonia Concert Society v Sec of State for Social Services (1981) ICR 454.
13. Although the case has also been heavily criticised by employment lawyers.
14. [1994) IRLR 386.
15. There are approximately 1.45 million temporary workers (6% of the workforce) but it is not known how many of these are agency workers. Employment Gazette March 1994.
16. See generally Hepple and Napier ‘Temporary Workers and the Law’ [1978) 7 ILJ 84 esp pp 90–96.
17. [1947) AC 1.
18. See also Denham v Midland Employers Mutual Assurance (1955) 2 QB 437 and Morris v Breaveglen Ltd (1937) IRLR 350.
19. Wickens v Champion Employment (1984) ICR365; Ironmonger v Movefield Ltd (1988) IRLR 461.
20. [1970) 3 AII ER 220.
21. Other reasons could include lack of continuity, no obligation of care on the employer for the employee, the fact that a worker can be on the books of several agencies at the same time: see Wickens v Champion Employment (1984) ICR 365.
22. (1972) 14 KIR 108: discussed in Hepple and Napier (1978) 7 ILJ 84.
23. [1988) IRLR 461.
24. There are 622,000 home workers of whom 113,000 work for an outside organisation: Employment Gazette November 1993.
25. [1984) ICR 612. See also Airfix Footwear v Cope (1978) ICR 1210.
26. In Wickens v Champion Employment (1984) ICR 365 it was specifically stated that there was no evidence that the temporary workers were in business on their own account but that that was not conclusive of the issue since if it were it would mean that every casual worker who was not in business on his own account would be an employee ‘and that, plainly is not the law’ per Nolan J at 371.
27. EPCA 1978, s 153 (1) defines a contract of employment as including a contract of apprenticeship. But note Wiltshire Police v Wynn (1980) ICR 649 (police cadet not an apprentice or an employee).
28. See for example Clelland v Edward Lloyd Ltd (1938) 1 KB 272.
29. [1982) IRLR 222. See also Daley v Allied Suppliers (1983) IRLR 14.
30. Eg limitations on who may be recruited, on the work which can be done, on dismissal and on pay.
31. [1983) IRLR 14.
32. Section 26 of the Employment Act 1988 allows the Secretary of State to designate a trainee as an employee, but this will only be so for specified purposes and is unlikely to affect the general issue. See for example the Social Security (Employment Training: Payments) Order 1988, SI 1988/1409 and the Employment Protection (Miscellaneous Provisions) Order 1991, SI 1991/1995. Neither deals with vicarious liability.
33. There are some which do not: eg job sharing and job splitting (the latter occurring where an employer splits a job so that no one worker works more than 16 hours per week. This was done to avoid employment protection legislation but would not now be successful in achieving this). In both cases there will be a contract of employment.
34. In July 1993 there were about three million self employed as against approximately two million in 1979. See Employment Gazette July 1993.
35. See on this McKendrick, ‘Vicarious Liability and Independent Contractors-A Re-examination’ (1990) 53 MLR 770.
36. Trade Union and Labour Relations (Consolidation) Act 1992, s 96(1).
37. Atiyah Vicarious Liability in the Law of Torts (1967) pp 31–32.
38. American Restatement 2nd Agency Vol 1, p 479.
39. There are of course a number of different statutory definitions for different purposes but they all seem to refer to the same central concept with minor variations. See for example Income and Comparative Taxes Act 1970, s 224(1); Employment Protection (Consolidation) Act 1978, s 153(1); Health and Safety at Work Act 1974, s 53; Social Security Contributions and Benefits Act 1992, s 163.
40. [1988) ICR 365.
41. See for example Wardell v Kent County Council (1938) 2 K B 768 where it was said that a nurse was under a contract of service for the purposes of the Workman's Compensation Act but that there would be no vicarious liability: however this comment, p 789, was no doubt affected by the peculiar rules then existing for vicarious liability in hospitals.
42. For an example of these principles in operation see O'Kelly v Trusthouse Forte (1983) ICR 728 discussed above. The general principles were established in Edwards v Bairstow (1956) AC 14.
43. See particularly Atiyah, Vicarious Liability in the Law of Torts (1967) Ch 2. See also Glanville Williams ‘Vicarious Liability and the Master's Indemnity’ (1957) 20 MLR 220 and Baty Vicarious Liability (1916).
44. ‘Qui facit per alium facit per se’ (A person who acts through another acts himself) and ‘Qui sentit commodum debet sentire et onus’ (a person who takes the benefit ought also to take the burden).
45. Per Lord Pearce in ICI v Shatwell (1965) AC 656 at 685.
46. As in the case of construction workers: see for example Lee v Chung (1990) IRLR 236.
47. [1969) 2 QB 173.
48. [1983) ICR 728.
49. See Kahn-Freund commenting on Cassidy v Ministry of Health (1951) J 1 AII ER 574 in (1951) 14 MLR 504.
50. 1993 SLT 284. See also Marshall v William Sharp 1991 SLT 114.
51. An interesting sideline relating to this point is provided by the radical dissenting judgement of La Forest J in London Drugs v Kuehne and Nagel (1992) 97 DLR 4th 261, which involved an action for full damages against individual employees for damaging the plaintiff's transformer when the liability of the employer was limited to $40 by an exemption clause. In holding that the employees were not liability in tort at all (although the employers were vicariously liable) La Forest J was particularly concerned with the relationship between the plaintiffs and the employers and their expectations and reliance, but although the judgement is expressly limited to the narrow problem in issue, the conclusion does suggest that where the act is being done by the enterprise and the other party has neither reliance upon nor expectations of the individuals concerned, it makes sense to say that the act is only that of the employer.
52. [1952) 1 TLR 101: a case on an employee's duty of confidence and copyright. See also his comments in Bankvoor Handel en Scheepvart v Slatford (1953) 1 QB 248 at 295-‘was the person part and parcel of the organisation?’.
53. For a discussion see Flannigan ‘Enterprise Control: the Servant-Independent Contractor Distinction’ (1987) 37 UTLJ 25 at 55.
54. (1986) 63 ALR 513.
55. On the idea that it is the legal right to control rather than actual control which is relevant see Zuijs v Wirth Bros (1955) 93 CLR 561 but even that formulation does not advance matters very far. If a contract of employment stated that the employer could only control what a person did and not how he did it, would that make the employee an independent contractor?.
56. (1986) 63 ALR 513.
57. [1967) 1 QB 156 discussed in Drake ‘Wage Slave or Entrepreneur?’ (1968) 31 MLR 408.
58. If she had dropped a balancing pole while on the trapeze should she or the circus have borne the risk?.
59. This split occurred in Hillyer v Governors of St Bartholomew's Hospital (1909) 2 KB 820 where nurses were regarded as servants except when assisting at an operation -but the hospital cases have always been peculiar.
60. Douglas ‘Vicarious Liability and Administration of Risk’ (1928–29) 38 Yale LT 584 and see Flannigan ‘Enterprise Control: the Servant-Independent Contractor Distinction’ (1987) 37 UTLJ 25. Flannigan regards this as a variant of the control test.
61. [1947) 1 DLR 161 at 169.
62. Douglas ‘Vicarious Liability and Administration of Risk’ (1928–29) 38 Yale LJ 584 at 595.
63. Market Investigations v Minister of Social Security (1969) 2 QB 173.
64. [1983) ICR 728.
65. ‘Independent Contractors and the Challenge of Vertical Disintegration to Employment Protection Laws’ (1990) 10 OJLS 353.
66. He proposes, for the purposes of employment law, the test that a contract of employment exists if the worker performs services for another, referable to a contractual agreement, unless that contract satisfies two conditions: that it is a task performance contract and that no badges of membership of the firm's organisation apply.
67. Mersey Docks v Coggins and Grifiths (1947) AC 1.