Vicarious liability and independent contractors
The ACAS website defines vicarious liability as:
'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, provided it can be shown that they took place in the course of their employment.
Many employers are unaware that they can be liable for a range of actions committed by their employees in the course of their employment - these can include bullying and harassment, violent or discriminatory acts or even libel and breach of copyright. It's also possible to take action against an employer for the behaviour of third parties, such as clients and customers, provided these parties are deemed to be under the control of the employer.
The key question of any case of vicarious liability is whether the employee was acting in a personal capacity, or in the course of their employment.'
This is becoming an important issue for employers, given the increase in the use of freelance and self-employed staff – the so-called 'gig economy'.
The Court of Appeal has recently considered the law of vicarious liability in this context. It was observed that the law of vicarious liability has been 'on the move' in recent times and the Court of Appeal's judgment has moved the law further in favour of claimants.
126 claimants brought a claim in damages against Barclays Bank. The Bank employed a doctor to carry out medical checks on staff in relation to current or future employment. The claimants had no choice as to who carried out these checks. The doctor has since died – but the police concluded that there would have been enough evidence to prosecute the doctor for sexual assaults committed by the doctor against the staff.
The Bank argued that the doctor was self-employed and engaged as an independent contractor and that is role was not 'akin to employment'.
The High Court held that there was a sufficient link between the alleged sexual assaults and the employment and the Court of Appeal agreed with this analysis. The Bank was held to be vicariously liable for the actions of the doctor.
Irwin LJ in the Court of Appeal said: 'Changes in the structures of employment, and of contracts for the provisions of services, are widespread. Operations intrinsic to a business enterprise are routinely performed by independent contractors, over long periods, accompanied by precise obligations and high levels of control.'
This is an important decision for employers who take on freelance and independent workers.
To discuss this or any other employment related issue, contact us.