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In the recent case of the Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB, the Supreme Court has reviewed and summarised the two-stage test which Employment Tribunals (and, by extension, employers) must apply when considering whether employers are ‘vicariously liable’ for the wrongdoing of their employees during the course of their employment.
This is a complex legal test, which often concerns harrowing acts of wrongdoing, such as serious sexual misconduct and violence causing serious injuries. For example, an employer was found liable for ‘life changing’ injuries caused to an employee when he fell backwards and hit his head after being punched by his employer’s Managing Director (Bellman v Northampton Recruitment Limited). Conversely, in 2020, the Supreme Court found that Morrisons was not vicariously liable for a significant data breach deliberately perpetrated by one of its employees (please click here for more information).
Vicarious liability renders an employer liable for the wrongdoing of its employees. It is ‘strict liability’, which means that regardless of whether the employer is at fault, it can be held responsible for its employees’ wrongful actions. There are public policy reasons behind the test for strict liability; it is designed to provide victims with an adequate remedy given that an employer is likely to have deeper pockets to compensate a victim.
In applying the test for vicarious liability, Courts and Tribunals have a difficult task in balancing fair redress for victims against the need to avoid employers becoming unofficial ‘insurers’ for all harm caused by employees in the course of their employment.
It is a difficult legal test to apply because, on one hand, the Courts recognise that it is right that a victim is compensated by an employer if one of their employees harms someone while undertaking their work. But it can be hard to know where the line falls, because no employer would say that the ‘course of an employee’s employment’ involves deliberately causing harm; but harm is sometimes caused in the context of a person’s employment.
Sexual assault, harassment and abuse can be covered by vicarious liability. For example, in 2010 the Archdiocese of Birmingham was found to be vicariously liable for the sexual assaults perpetrated by a priest on a young boy.
In the Morrison’s case set out above, in 2020 the Supreme Court set out a two-stage test for establishing whether vicarious liability should arise. In the April 2023 case Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB, the Supreme Court took the opportunity to summarise and expand on that two stage test, in the context of a conviction for rape.
In brief, an elder of the Barry Congregation of Jehovah’s Witnesses was convicted of raping a congregation member at the elder’s home, after they had been out evangelising together.
The congregation member brought a personal injury claim against the worldwide governing body of the Jehovah’s Witnesses and the trustees of the Barry Congregation of Jehovah’s Witnesses (‘the Trustees’), on the basis that they were vicariously liable for the rape committed by the elder because it was carried out ‘in the course of his Employment’.
The key question for the Courts to decide was the extent to which the Trustees could be held responsible for acts of the elder.
At appeal, the Supreme Court reviewed recent case law on vicarious liability and summarised the legal principles.
The Supreme Court confirmed the following.
Vicarious liability requires a two-stage test. Both stages of the test must be met for liability to arise.
Stage one of the test requires there to be a relationship between the defendant and the wrongdoer of employment or a relationship ‘akin’ to employment. So, the court needs to consider any features of the relationship that are similar to, or different from, a contract of employment.
For example, it might consider whether the work is paid, what control the defendant has over the wrongdoer, whether the work is carried out for the benefit of the defendant or organisation etc. The Supreme Court noted however that there is no vicarious liability where the wrongdoer is a true independent contractor – the ‘akin to employment’ test does not stretch this far.
Stage two is the ‘close connection’ test, which asks whether the wrongful conduct was so closely connected with acts that the wrongdoer was authorised to do that it can fairly and properly be regarded as done while acting in the course of their employment or quasi-employment.
So, the Court needs to consider the link between the wrongful conduct and employee’s authorised activities. The simple test of ‘but for the employment relationship this would not have happened’ is not sufficient in itself. Even in difficult cases like sexual abuse cases, the same tests apply. In these cases, it can be a useful final check to consider whether the outcome is consistent with the underlying policy justification for vicarious liability (see Background above).
The Supreme Court then went on to apply this two-stage test to the facts in the case.
It found that the relationship between the Trustees and the elder was akin to employment (so stage one of the test was satisfied). This was because the elder was carrying out work on the organisation’s behalf, he was performing duties in furtherance of its aims and objectives, there was an appointments and removal process for elders and his role fitted into a hierarchical structure.
However, the Supreme Court held that the close connection test – i.e. stage two of the test (above) - was not satisfied. The wrongful conduct was not so closely connected with acts that the elder was authorised to do that it could fairly and properly be regarded as committed by him while acting ‘in the course of’ his quasi-employment as an elder.
The Supreme Court gave several reasons for this finding, including that the rape was committed at the elder’s own home when he was not engaging in performing any work connected to his role nor exercising control over his victim because of it. He was not wearing his “metaphorical uniform” as an elder when the attack took place.
Whilst it was accepted that, the elder’s role was a ‘but for’ cause of the victim being with him when the offence occurred (because it was accepted she would not have developed a friendship with him ‘but for’ him being an elder), this was insufficient to satisfy the ‘close connection’ test.
Stage two of the test was therefore not satisfied and there was no vicarious liability.
As a final check, the Supreme Court also considered the policy underpinning vicarious liability and concluded that there was no convincing justification for the Trustees to bear the cost or risk of the rape committed by the elder. The fact that its financial resources meant it was in a better position to compensate the victim was not a justification for extending vicarious liability.
This is a welcome decision for employers, particularly given that employers have previously been found liable for acts that have taken place outside of work (e.g., in a hotel after a work Christmas party, as in the Bellman case referenced above).
This judgment clarifies that organisations should not be vicariously liable for independent contractors, or for acts which are not closely connected with the activities that an employee (or here, quasi-employee) is authorised to do.
It also clarifies that the "deep pockets" argument is not a justification for extending vicarious liability beyond its principled boundaries.
However, employers will still want to consider ways to reduce their exposure to vicarious liability.
It is possible that they may be able to insure against this risk under a public liability policy or specific information security policy (to cover situations like the Morrison’s case – see above). However, insurers may demand carve outs for this type of situation and may not meet the whole liability in any event. It is therefore really important that employers have carefully written policies on areas such as appropriate behaviour at work and information security, and that all staff receive adequate training on these in order to try and mitigate the risk of liability falling at the employer’s doorstep.
Contributors: Sarah Maddock and Catherine Roylance
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This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2023. Specific advice should be sought for specific cases. For more information see our terms & conditions.
11 May 2023