Employer's Liability: Irish Tort Law

Vicarious liability is a test, Claire McIvor notes, grounded in policy-driven analysis and "loosely focused on a theory of enterprise risk, and ostensibly guided by notions of justice and fairness." In the case of Stavely Iron and Chemical Company v Jones [1956], the court stated, how "it is a rule of law that an employer, though guilty of no fault himself, is liable for damage done by the fault or negligence of his servant acting in the course of his employment." This statement provides a pretty good synopsis of what the law on vicarious/employer's liability is about. Vicarious liability is the long-standing common law principle dealing with the misconduct of an employee. Employers can also suffer under health and safety legislation as well as under Ireland's employment law equality legislation. Various reasons exist as to why the courts favour vicarious liability in the context of employment, primarily due to the fact that the employer benefits from the acts of the employee and should be responsible for harm arising from those acts. In order to be successful in a claim for vicarious liability through the Irish courts, two tests must be established.

Test 1: Proximity

The test can be broken down threefold. Firstly is the test for close connection/proximity of an employee-employer relationship existing between the parties. In traditional employment, this can be evidenced through an employment contract. However, where more difficult elements arise within the test is when there is an independent contractual employment relationship. In this circumstance, the court will consider if the plaintiff is employed under a 'contract of services' or a 'contract for services.' No defined approach exists regarding the approach to take when determining an employee-employer relationship. The court will consider a variety of factors according to the specific circumstances of each individual case. The Irish courts favour a flexible approach, favouring a 'control-based' test. The case of Walshe v Baileboro' Co-Op & Grogan [1939] exemplifies the courts flexible approach. The plaintiff in this case was injured when he was struck by the worker's horse and cart. The worker had owned the horse and cart under a 'contract for service' and was paid a piece-meal. The court held that despite the strong indications of an independent contractor working under a contract for service, the worker was deemed as an employee of the co-op, and vicarious liability was imposed on the co-op. In the more recent case of Phelan v Collite Teo [1993], the plaintiff (worker) was working on site with his own supplies and tools and he was paid a mileage allowance. The worker arranged with the Defendants not to avail of any holiday, sick or pension rights and in turn the worker was not taxed under the PAYE system as an employee. The employee then caused injury to a third party and the issue of vicarious liability was raised and the court subsequently referred to the appropriate test based on proximity and the issue of control. The court held that vicarious liability did apply in the circumstances. Barr J in his decision reflected that in determining when one party 'controlled' the other, the court was not limited to the control actually exercised by the employer.

Further, in the case of Castleisland Cattle Breeding v Min for Social and Family Affairs [2004], the issue presented to the Supreme Court was whether the plaintiffs who were providers of insemination services were independent contractors or employers. The Supreme Court in this case proved several key elements and principles in this area, such as:

1. Contract terms are not determinative and real arrangement on day-to-day basis must be examined.

2. Each case must be considered on particular facts but in general if one person is working for another he is an employee and not an independent contractor.

3. Degree of control is a factor, but is not decisive and a person could be said to work for himself where he provided premises, equipment, employed other people to assist in business and his profit was dependent on the efficiency of business conducted by him.

Arguably, a more sophisticated test is needed in order to deal with the employment status of individuals and the test should consider actual control in terms of accountability for the performance, organisational integration and how investment, risk, profit is divided between the parties. It is worth noting that whilst the courts will adopt a flexible view of the ‘employee’ definition for the purposes of vicarious liability, it will not do “violence to the well established characteristics” of the employer-employee relationship as stated by the court in the case of Carroll v Post National Lottery [1996]. In the case it was held that the Lotto agent paid by commission did not constitute employees in the case. Where vicarious liability is ruled out by reason of the worker’s status as an independent contractor, it may still be possible to fix liability directly on an employer if he is found to be in breach of a personal duty of care.

In the case of Hickey v McGowan, the court held the employer of the plaintiff vicariously liable for the acts of sexual abuse perpetrated on the plaintiff by another employee. The Supreme Court in the case reflected how the "close connection test must be taken to represent the law in Ireland."

Test 2: Scope

Once the test for proximity is established, the second test is one of scope, in that the tort must occur within the scope/course of the employment of the employee when an accident or breach of a duty occurred. The plaintiff is required to establish that their employer was vicariously liable for their injury and if an employee has acted outside the remit of their employment, their employee will not be held liable for the plaintiff's injuries. Like the first test, the court will consider a flexible and variety of factors when assessing if the employee acted in the course of their employment. In the case of Smith v Stages [1989], Lord Goff commented that "an employee is acting in the course of his employment when he is doing what he is employed to do... or anything which is reasonably incidental to his employment." The test for scope is considered more nebulous as it focuses on assessing if the employee acted within the parameters of the authority delegated to her by the employer. If the employer gives an employee directions or instructions this will be of crucial importance to any claim for vicarious liability and the test for scope. The test however focuses more on 'authority' and 'delegation' and subsequently has owed itself to widespread criticism for lacking employment reality. A number of recent Irish decisions in this area have suggested a favour for the 'scope' rather than the 'course' test.

The case of Lister v Hall [2002] is significant for testing whether an employee was acting within the 'course of her employment.' The facts of the case are that the Defendant was employed by a school which cared for boys with behavioural issues. During the course of the Defendant's employment, he systematically abused the children. The House of Lords held in favour of the plaintiffs, stating that it was just and fair that the Defendant's employer was held vicariously liable for the Defendant's actions. Lord Steyn noted, "it is a legal responsibility imposed on an employer, although he himself is free form blame, for a tort committed by his employee in the course of employment."

Other considerations

The court can also be held liable for failing an employee failing to do their job properly. This was examined in the Supreme Court case of Lynch v Binnacle Limited [2011]. In this case, the plaintiff sustained injuries after he was kicked by a bull while working on the mart. The claim alleged against his employer stated that he had breached his duty to provide a safe place of work. The employer argued that the plaintiff was an experienced drover and should have known not to go into the pen. The court when assessing the claim for vicarious liability of the plaintiff's injury, heard evidence that two other employees should have been supervising the plaintiff however they had prematurely left the premises. The court held that as soon as those employees who were crucial to enact the health and safety of the plaintiff, the duty of care was breached. The court initially awarded in favour of the plaintiff however upon appeal by the Defendants, the court of appeal found that due to the plaintiff's decision to go into the pen unsupervised, a contributory negligence of 33% was assessed however held that the employer was vicariously liable for 2/3rd of the plaintiff's injuries.

Employers can also be held vicariously liable under the Employment Equality Act [1998] for discriminatory acts or breaches of the provision of the Act perpetrated by an employers employees. Section 15 of the Act is significant in this respect.

Finally, the case of O'Keefe v Hickey highlighted the various justifications of a plaintiff for bringing vicarious liability proceedings including control, risk creation/enterprise liability, deep pocked as well as deterrence & prevention. John Fleming (1989) expressed how the ingredients required to bring a claim for vicarious liability represents a compromise between two conflicting ideas, the social interest of the victim attaining justice against a hesitation to burden business enterprise.

Concluding thoughts

McMahon & Binchy argue in favour of the 'scope test' proposing that it shouldn't be applied rigidly or strictly in order to ensure that employment realities across a diverse range of contexts can be realised in vicarious liability claims. Eoin Quill favours a merging approach, bringing together the 'scope' and the 'course' test, stating that an act is within the course of employment in the circumstance where a tort was authorised by the. employer or where the employee interpreted or adopted a wrong mode of doing some act as authorised by the employer. If one looks at the developing case law in this area of tort law, it appears that it is the scope test which is favoured by the Irish courts where the worker has committed an intentional wrong extraneous to his duties towards his employer and that the course test is adopted where the injury was accidental and not obviously inconsistent with the job the employee was doing for the employer.