Vicarious Liability – Is an employer liable for harm caused by negligent employees?

It has long been the position that an employer will be liable for the negligent acts of their employee if the employee’s acts are carried out in the course of the employee’s employment and the acts have a significant connection to the employee’s role. This is known as “vicarious liability”.

Vicarious liability in the New Zealand employment context is a largely untested area of law. However, given recent events (such as the Notre Dame blaze where it was speculated that workers smoking on the site had caused the fire) have brought the issue into the spotlight.

Under New Zealand law, an employer’s vicarious liability to its employees can include:

  • The contracts or undertakings that an employee makes on the employer’s behalf;
  • Reimbursement for any actual or reasonable expenses that the employee incurs in the course of the employer’s business, provided they have the employer’s authority;
  • Actions the employee carries out under the employer’s express or implied instructions;
  • Where an employer is charged under the Health and Safety at Work Act 2015 for a breach of health and safety standards by its employee and the employer did not ensure, as far as is reasonably practicable the safety of its workers and other persons; and
  • Where any person (such as a customer, supplier, student on work experience, an intern or a prospective employee) has been discriminated against by an employee of the employer, during the course of their employment. In this instance, the human rights jurisdiction is available.[1]

 Close Connection Test

 Case law from Canada and the UK[2] confirmed the “close connection” test for vicarious liability. This test requires:

  • A relationship of employment (or other such similar relationship) between the wrongdoer and the party who is allegedly vicariously liable; and
  • A sufficient connection between the wrongful act and wrongdoer’s role as an employee or agent.

There has been limited discussion about the concept of vicarious liability of employers in New Zealand. This is likely to be due to a combination of reasons including the ACC bar on compensatory damages, and the features of our own employment jurisdiction (such as personal grievance claims under the Employment Relations Act 2000 or discrimination claims under the Human Rights Act 1993. However, this does not mean it is a concept which should be forgotten.

[1] The Human Rights Act 1993 explicitly provides for vicarious liability where the employee and or an agent breaches anti-discriminatory provisions, with a defence of “due diligence” under section 68 of that Act.

[2] Bazley v Curry [1999] 2 SCR 534 (Canada) and Lister v Hesley HallLltd [2002] 1 AC 215 (United Kingdom).

Workplace Law Team

If you have any queries in respect of the above, or any other workplace law issues, please contact a member of Lane Neave’s Workplace Law Team:

Employment: Andrew Shaw, Fiona McMillan,  Hannah Martin,  Alex Beal, Giuliana Petronelli, Ana Fruean, Elise Wilson
Immigration: Mark Williams, Rachael Mason, Nicky Robertson, Hetish Lochan, Daniel Kruger, Julia Strickett, Rita Worner, Lavinia Shanks, Winnie Chen, Ken Huang, Sally Stone,  Shi Sheng Cai (Shoosh), Josh TempletonMary Zhou, Sarah Kirkwwood, Isaac HuangLingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew ShawFiona McMillan

Contact

Andrew Shaw
Partner, Lane Neave

t +64 3 353 8014
m +64 29 244 9001
e andrew.shaw@laneneave.co.nz

Fiona McMillan
Partner, Lane Neave

t +64 9 300 6264
m +64 27 351 2000
e fiona.mcmillan@laneneave.co.nz

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