Labour Law II LPB 204 Topic: Vicarious Liability - PowerPoint Presentation

1. Labour Law IILPB 204Topic: Vicarious Liability

2. IntroductionVicarious liability in labour law, is a doctrine that imposes strict liability on employers for the wrongdoings of their employees. Generally, an employer will be held liable for any tort committed while an employee is conducting their duties.The master will be vicariously liable for the tortious act of his servants committed in the ‘course of employment’.

3. Vicarious LiabilityThe basis of this liability of the employer for the tortious acts of its employees is trite and well established at common law. The general principles were re-stated in R.O Iyere V Bendel Feed and Flour Mill Limited (2008) 18 NWLR Part 1119 30 where the Supreme Court held that:The general disposition of the law is that an employer is liable for the wrongful acts of his employee authorised by him or for wrongful modes of doing authorised acts, if the act is one which if lawful will fall within the scope of the employee’s employment as being reasonably necessary for the discharge of his duties or the preservation of the employers interests or property or otherwise incidental to the purposes of his employment.

4. Vicarious LiabilityThe employer must accept responsibility in as much as he has authorised the employee to do that particular class of act and is therefore precluded from denying the employee’s authority to the act complained of.If the act is one which even if lawful would not have fallen within the scope of the employee’s employment; the employer is not bound unless the act is capable of being ratified and is in fact ratified by him. Generally, the act of the servant is the act of the company.See Odebunmi V. Abdullahi (1997) 2 NWLR (Pt. 489) 526.

5. Factors to be consideredFor any employer to be vicariously liable for the tortious acts of its employee, the following elements must be present;An employer-employee relationship, the employer’s liability is derivative of the primary liability of the worker. Hence the liability of the worker must first be established. The act must have been authorised by the employer;The act is incidental or necessary for the discharge of employees duties, so that even if done in a wrongful manner, it would have fallen within the scope of authority of the employee;The act even though done in a wrongful manner, is capable of being ratified or was ratified by the employer. 

6. Factors to be consideredThe tortious act must have been committed by one of their employees. When seeking to establish whether someone is an employee, traditionally the courts look to the level of control exercised by the employer. In Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd [1947] HL, Coggins and Griffith a firm of stevedores hired a crane and its operator from the harbour authority to assist in loading and unloading ship cargos. The contract stipulated that the crane driver was the stevedore’s employee although the harbour authority continued to pay his wages and retained the power of dismissal. Unfortunately, the crane operator negligently injured another employee while loading a ship. In finding the harbour authority vicariously liable for the crane operator’s negligence, the HL held that the agreement between the parties was not conclusive. Although at the time of the accident the stevedores were able to instruct the crane operator as to what to do , they had no control as to how he operated the crane. Moreover, the fact that the harbour authority continued to pay the operators wages was a further indication that he was still their employee.

7. Factors to be consideredSimilarly in Hawley v Luminar Leisure Ltd [2006] CA, a door steward hired to keep the order at the defendants nightclub (Luminar) physically assaulted the claimant in the course of his employment, causing him permanent and serious brain damage. The Club did not hire their door staff directly but contracted with ASE Security services to provide appropriate staff. The question for the Court was whether the door steward was the employee of the night club for whom he worked daily or ASE with whom he and the night club contracted directly.The CA in framing the question asked, who was entitled and therefore obliged to control the door steward’s act so as to prevent it; it was held that the owner of the night club was, and thus the owner of the club was vicariously liable.

8. Factors to be consideredToday, common law courts favour a broader test often referred as the ‘economic reality test’. Control is only one factor out of many in determining whether a contract of employment exists. Cooke J commented in the leading English case of Market Investigations v Minister of Social Security[1969] 2 QB 173, 185. “No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered . . . and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task."

9. The vicarious liability of the employer can arise fromi. Criminal actions of the employee,ii. Tortious actions of the employee, oriii. Contract.Vicarious Liability

10. Conviction for a crime requires both the physical act that constitutes the crime (actus reus) and the guilty mental state or intention to commit the crime (mens rea). General rule - a person cannot be made liable for the crime of another. A master is not liable for the crime of his servant Liability for crime

11. Exceptions: if it can be shown that the servant committed the crime in the execution of orders of his master, or in the absence of express order, that the master knows or ought reasonably to have known that his servant is committing a crime in the course of his employment and he fails to restrain him.A master’s liability for the crime of his servant can arise under common law or under statute.Liability for crime

12. a master will be liable for the crime committed in the course of employment by his servant where he authorizes it or knows about it. E.g libel and nuisanceUnless the master gives evidence on how he discouraged the commission of the crime. Other than these instances, the employer cannot be made liable. Crime under Common Law

13. The act committed does not have to be for the benefit of the employer.The test is whether the servant’s act falls within the general class of acts which he is employed to do. Crime under Common Law

14. a solicitor’s managing clerk induced an old widow by fraud to part with her title deed and money and later appropriated them. The defence argued that the servant committed the crime for his own benefit and that the employers were not answerable for such an act. The court rejected the argument and held that a fraud committed in the course of business which the servant was authorized or held out as authorized to transact on behalf of his principal was an act done in the course of employment and the masters were liable for it. Lloyd v. Grace, Smith and Co (1912) AC 716

15. Some statutes impose duties on the master which he cannot delegate and if he chooses to delegate, he would still be held liable as he would have done so at his own risk.Examples are safety provisions in statutes such as the Factories Act which impose duties on the master personally. A company and its board of directors can also be held vicariously liable by certain statutory provisions since it must act through natural persons. In Board of Customs & Excise v. Agu & Chika Brothers Ltd 3 (1977) 332, the company was held vicariously liable for knowingly importing prohibited goods into the country even though the offence was committed by the company's agents. Crime under Statutes

16. This is the most common area where employer’s are made vicariously liable for actions of their workers. As earlier stated, the employer’s liability is derivative of the primary liability of the worker. Hence the liability of the worker must first be established. Liability for Tort

17. An in-patient of the hospital fell to his death from the 4th floor of UCH.The court held that the board of management of the hospital were liable for negligence of the medical staff on duty. ‘a hospital authority is responsible for the acts or omissions of the whole of its staff whether they were surgeons, physicians, nurses or other employees’.Igbokwe v. UCH Board of Management (1961) WNLR 173

18. Appellant was employed as silo attendant by the respondent who was assigned, in the course of his employment, to the duty operator to discharge a truck of fish mill. He noticed frequent stoppage in the intake of materials and reported this to the duty operator, who confirmed that he was aware of the problem. The duty operator sent him to clear the conveyor or running machine to check the constant stoppage of intake of materials by the machine. He left the switch operator at the switch room and went down the mill below to clear the stoppageIyere v. BFFM Ltd (2008)18 NWLR [1119] 300 (1)

19. While there, the switch operator started running the machine without clarifying or getting a feed back from the appellant. The right arm of the appellant was caught in the machine and damaged hence it was operated upon. This led to a permanent deformity of his right arm. The appellant’s appointment was later terminated. He brought this action claiming that the alleged termination of his appointment was illegal and asked for special and general damages against the respondent.Iyere v. BFFM Ltd (2008)

20. The trial court and court of appeal had dismissed his claims on the ground that he did not join the duty operator who was primarily responsible for the accident but only sued the company which was vicariously liable. The Supreme Court in allowing the appeal held that failure of the appellant to join the duty operator could not be a ground for dismissing the appeal because if such a situation is allowed, it would be difficult for most claims based on vicarious liabilities to be successfully prosecuted since all the principals need to do would be to ensure that the servants involved are made unavailable for the purpose of being joined in a contemplated action. Iyere v. BFFM Ltd (2008)

21. Sometimes an employer can prohibit a worker from certain acts? Would he still be liable for such prohibited acts? In Jamarkani Transport v. Wullemotu Abeke (1963) 1 All NLR 160, the Supreme court was of the view that a prohibition will affect the employer’s liability to the extent that he has limited the servant’s scope of employment and that where a master specifically prohibits a servant from engaging in a course of action, he cannot be held vicariously liable unless he acquiesces in the breach of the order. Liability for Tort

22. However, mere prohibition does not discharge the employer from liability. It has to be examined whether the act falls within the general class of work the servant is employed to do. So where the prohibited act falls within the general class of work the servant is employed to do, the employer may still be held liable unless the prohibition is express and known to the third party. However where a servant departs from his general class of duties for which he is employed, the master will be relieved of vicarious liability. The servant of course remains primarily liable.Liability for Tort

23. A master may also be made vicariously liable for the acts of a volunteer in situations of emergency or where a worker who has been authorized to invite others to assist invites such a volunteer. Liability to third parties not through workers

24. A master is however not generally liable for the acts of an independent contractor or the servant of such a contractor in the discharge of their contractual obligations. This is because an independent contractor is not a servant but uses his own discretion to carry out his obligations under the contract. Independent Contractor

25. But the employer can be made liable where the employer interferes with the execution of the contractor’s work or in fact exercises control over himwhere the work the contractor is employed to do is only to be done at the employer’s own riska statutory duty is imposed on the employer and he is not to delegate yet he goes ahead to delegatethe work the contractor was engaged to do is unlawful, the employer would be liable for any damage or injury caused to a third party.Independent contractor

26. Vehicle Owners and DriversThe general principal of law in relation to vehicle owners and agent- drivers in a vicarious liability situation is that the mere ownership of a vehicle does not itself impose any liability on the owner for the negligence of driving of others whom he permits the use of his vehicle. However, under certain circumstances, the law imposes vicarious liability on such an owner for the negligent use of his vehicle, irrespective of the existence of any contract of service between the owner and the driver. Generally, to make the vehicle-owner vicariously liable for the negligent use of his vehicle, two elements must be proved. (a)  That the use is authorised, expressly or impliedly; and (b)  That the driving was either wholly or partly in the execution of a task or purpose on the owner’s behalf. It was held in Higbid v. R.C. Hammert (1932) 49t.L.R. 104. that the mere fact that a man has the authority of a vehicle owner to drive his vehicle does not suffice to make the owner liable for his negligent driving, otherwise any man who allows another the use of his vehicle stands in peril while the vehicle is being used. See Odebunmi V. Abdullahi (1997) 2 NWLR (PT. 489) 526.

27. S. 91 Labour Act – an employer is ‘any person who has entered into a contract of employment to employ any other person as a worker either for himself or for the service of any other person’ An employer can be brought under the law of agency. The worker would be seen to act as the agent of the employer.Section 9(2) LA provides that an employer shall be responsible for the performance of any contract made by any person acting on his behalf.Where relationship of master-servant exists, master is liable for torts/wrongs of servant so long as they were committed in the course of employment Liability on Contract

28. In The Course Of EmploymentJoel v. Morison (1834) 6 Carrington & Payne 501 (Parker B): “The master is only liable where the servant is acting in the course of his employment. If he was going out of his way, against his master’s implied commands, when driving on his master’s business, he will make his master liable; but if he was going on a frolic of his own, without being at all on his master’s business, the master will not be liable.”

29. Acts Committed In The Course Of EmploymentSuch an act is committed in the course of employment or within the scope of duty. See ACB v APUGO (1995) 6 NWLR (pt 399) p. 65 This is a question of factWas the act ‘authorised’ by the master?Is the act a wrongful/unauthorised mode of doing an act authorised by the employer/master?29

30. There are different kinds of agency, whether the employer would be bound or not will depend on the kind of agency. Agency can be due to ratification by the employer of the worker’s prior unauthorized act. It can also be based on estoppels where the employer by his action has held out the servant to a third party as his agent. It can also be created in situations of emergency where a worker acts in order to preserve or protect the interest of his employers. Liability on Contract

31. Note: the mere relationship of master/servant does not automatically mean that the servant acts as the master's agent in all respects. The servant must have one of the types of authority that can confer an agency relationship whether express, implied, usual, by ratification, estoppels or necessity.although the particular act which gave rise to cause of action is unauthorised, if the act is done in the course of employment which is authorised, then the master is liable for act of his servantIn Century v Northern Ireland Road Transport Board (1942) A.C 509, a driver of a petrol tanker lit a cigarette in the course of duty. He then threw the match on the floor, causing a conflagration. His employer was held liable.Liability on Contract

32. Authorised act done in an improper mannerIn London County Council v Cattermoles (1953) 2 All ER 581; a servant employed on a garage was only authorised to push/move cars from one place to another and not drive them. He drove a van unto the highway resulting in a head on collision with the plaintiff’s van. His employers were held liable. HELD - Moving cars by hand or other means was within the scope of his employment. Although driving the van is a wrongful/unauthorised way of performing an authorised act, it was incidental to his scope of employment.

33. Justifications for Vicarious LiabilityIt is suggested that if an employer derives an economic benefit from their employees’ work, they should bear any related burdens; a person who employs others to advance his own economic interest should in fairness be placed under a corresponding liability for losses incurred in the course of the enterprise.The victim of the wrong doing should be able to seek compensation from a source better placed financially than the employee who actually committed the tort.

34. Justifications for Vicarious LiabilityAlso, employers are in the best position to reduce the likelihood of workplace accidents, and indeed intentional wrongdoing by their employees through imaginative and efficient administration and supervision. The imposition of strict liability acts as an incentive encouraging employers not only to maintain standards of good practice and to take care when making appointments but to explore ways of going beyond those set, by the standard of a reasonable person.