Vicarious Liability


Vicarious liability


After reading this chapter you should be able to:

Understand the basic meaning of vicarious liability

Understand the purposes and justifcations for imposing vicarious liability

Understand the tests for establishing employment status

Understand the circumstances in which an employer will and will not be liable for the acts and omissions of his employee

Critically analyse the area

Apply the law to factual situations and reach conclusions as to liability

18.1 Origins, purposes and criticisms

Vicarious liability is not an individual tort in the way that we have looked at other torts such as negligence or nuisance. It is a means of imposing liability for a tort on to a party other than the tortfeasor, the party causing the tort.

It was in fact originally based on the ‘fiction’ that an employer has control over his employees and therefore should be liable for torts committed by the employee. This was possibly less of a fiction in the nineteenth century when the ‘master and servant’ laws still accurately reflected the true imbalance in the employment relationship.

In a less sophisticated society with less diverse types of work control was indeed possible. In domestic service for instance the master could dictate exactly the method of the work done by the servant. This was in fact dramatically demonstrated by case law of the time.



Latter v Braddell [1881] 50 LJQB 448

A young female domestic servant was asked to submit herself to an internal examination when her mistress suspected that the girl was pregnant. The girl very reluctantly and in great distress complied with the order as in the employment circumstances of the time she would have little chance to refuse. In her later action for assault her claim failed. She was held to have consented to the examination.

Modern forms of employment make control less evident. For instance the actual work done by a surgeon can hardly be said to be under the control of a hospital administrator with no medical expertise.

Nevertheless, the origins of the liability are important because it is rare that vicarious liability will exist outside the employment relationship.

The rule has been criticised for being harsh and ‘rough justice’ since an apparently innocent party is being fixed with liability for something which he has not done. On this level imposing liability by this method is a direct contradiction of the principle requiring fault to be proved to establish liability.

There are a number of justifications for the practice, many of which have to do with ensuring that the victim of a wrong has the means of gaining compensation for the damage or injury suffered.

Traditionally, as we have seen, an employer may have had a greater degree of control over the activities of employees. Indeed it may well be that an employee has carried out the tort on the employer’s behalf, so it is only fair that the employer should bear the cost.

The employer, in any case, is responsible for hiring and firing and disciplining staff. The employer may have been careless in selecting staff, and, if employees are either careless or prone to causing harm and the employer is aware of this, then he has the means of doing something about it. The internal disciplinary systems allow the employer to ensure that lapses are not repeated, ultimately to the extent of dismissing staff. The employer is also responsible for ensuring that all employees are effectively trained so that work is done safely.

The major concern of an injured party is where compensation is likely to come from. In this respect the employer will usually be better able to stand the loss than the employee will. In any case the employer is obliged to take out public liability insurance and can also pass on loss in prices.

This is itself a justification for vicarious liability since it is also a means of deterring tortious activities.

In certain instances imposing vicarious liability makes the conduct of the case easier for the injured party in terms of identifying specific negligence. This is particularly so in the case of medical negligence.

Proving vicarious liability first depends on satisfying a number of other basic tests:

Was the person alleged to have committed the tort an employee? There is only very limited liability for the torts of independent contractors.

Did that party commit the alleged tort ‘during the course of his employment’? An employer is generally not liable for torts that occur away from work or while the employee is ‘on a frolic on his own’.

Was the act or omission complained of a tort? Again an employer will not generally incur liability for other wrongs such as crimes carried out by the employee.

18.2 Tests of employment status

18.2.1 Introduction

It is not always possible to determine at first sight whether in fact a person is employed under a contract of service or not. It will often be in the interest of an ‘employer’ to deny that the relationship is one of employment. Definitions such as that contained in the Employment Rights Act 1996 that the employer is a person employed under a contract of employment are no real help in determining a person’s employment status. It has been suggested in WHPT Housing Association Ltd v Secretary of State for Social Services [1981] ICR 737 that the distinction lies in the fact that the employee provides himself to serve while the self-employed person only offers his services. This is no great help in determining whether or not a person is employed.

There is in any case inconsistency in the methods of testing employee status according to who it is that is doing the testing. For instance the only concern of the tax authorities in testing employee status is in determining a liability for payment of tax, not for any other purpose. So the fact that a person is paying Schedule D tax is not necessarily definitive of their status as self-employed. Again industrial safety inspectors may have less concern with the status of an injured party and more with the regulations that have been breached.

Besides this a number of different types of working relationship are not so easy to define. ‘Lump’ labour was common in the past, particularly the 1960s and 1970s. Casual and temporary employment is possibly even more prevalent in recent times, and many major companies rely on the use of agency staff.

Over the years the courts have devised a number of methods of testing employee status. They all have shortcomings. Some are less useful in a modern society than others.

18.2.2 The control test

The oldest of these is the ‘control test’. This test derived from the days of the ‘master and servant’ laws as we have already seen. In Yewens v Noakes [1880] 6 QBD 530 the test was whether the master had the right to control what was done and the way in which it was done. According to McArdie J in Performing Right Society v Mitchell and Booker [1924] 1 KB 762 the test concerns ‘the nature and degree of detailed control’.

Lord Thankerton in Short v J W Henderson Ltd [1946] 62 TLR 427 identifed many key features that would show that the master had control over the servant. These included the power to select the servant, the right to control the method of working, the right to suspend and dismiss, and the payment of wages.

Such a test is virtually impossible to apply accurately in modern circumstances. Nevertheless, there are circumstances in which a test of control is still useful, in the case of borrowed workers.



Mersey Docks & Harbour Board v Coggins and Griffths (Liverpool) Ltd [1947] AC 1

Here the test was applied when a crane driver negligently damaged goods in the course of his work. In this case the Harbour Board hired a crane and the crane driver out to stevedores to act as their servant. Under the contract between the Board and the stevedores the crane driver was still to be paid by the Board and only they had the right to dismiss him, but for the duration of the contract he was to be regarded as the employee of the stevedores. The Harbour Board was still held to be liable for his negligence, however, since he would not accept control from the stevedores.

In the case above Lord Porter gave a very clear explanation of the control test:



‘the most satisfactory [test] by which to ascertain who is the employer at any particular time, is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged & it is not enough that the task to be performed should be under his control, he must control the method of performing it.’

This can be seen in Hawley v Luminar Leisure plc [2005] EWHC 5 (QB) where a nightclub owner was held to be in control of and therefore vicariously liable for bouncers actually employed by a security frm. This was because the owner gave the men detailed instructions on how to do the job.

18.2.3 The integration or organisation test

Lord Denning in Stevenson Jordan and Harrison Ltd v McDonald and Evans [1969] 1 TLR 101 established this test. The basis of the test is that someone will be an employee whose work is fully integrated into the business, whereas if a person’s work is only accessory to the business then that person is not an employee.

According to this test the master of a ship, a chauffeur and a reporter on the staff of a newspaper are all employees, where the pilot bringing a ship into port, a taxi driver and a freelance writer are not.

The test can work well in some circumstances but there are still defects. Part-time examiners may be classed as employed for the purposes of deducting tax, but it is unlikely that the exam board would be happy to pay redundancy when their services were no longer needed.

18.2.4 The economic reality or multiple test

The courts in recent times have at last recognised that a single test of employment is not satisfactory and may produce confusing results. The answer under this test is to consider whatever factors may be indicative of employment or self-employment. In particular, three conditions should be met before an employment relationship is identifed:

The employee agrees to provide work or skill in return for a wage.

The employee expressly or impliedly accepts that the work will be subject to the control of the employer.

All other considerations in the contract are consistent with there being a contract of employment rather than any other relationship between the parties.



Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497

The case involved who was liable for National Insurance contributions, the company or one of its drivers. Drivers were used under a new contract under which they drove vehicles in the company colours and logo that they bought on hire purchase agreements from the company. Under the contract they were also obliged to maintain the vehicles according to set standards in the contract. They were only allowed to use the lorries on company business. Their contracted hours, however, were fexible and their pay was subject to an annual minimum rate according to the concrete hauled. They were also allowed to hire drivers in their place. Although it might be seen to have operated unfairly on the claimant the drivers were held to be independent. The case is important because McKenna J developed the above test in determining their lack of employment status.

The test has subsequently been modified so that all factors in the relationship should be considered and weighed according to their significance. Such factors might include:

The ownership of tools, plant or equipment – clearly an employee is less likely to own the plant and equipment with which he works.

The method of payment – again a self-employed person is likely to take a price for a whole job where an employee will usually receive regular payments for a defined pay period.

Tax and National Insurance contributions – an employee usually has tax deducted out of wages under the PAYE scheme under Schedule E and Class 1 National Insurance contributions also deducted by the employer. A self- employed person will usually pay tax annually under Schedule D and will make National Insurance contributions by buying Class 2 stamps.

Self- description – a person may describe himself as one or the other and this will usually, but not always, be an accurate description.

Level of independence – probably one of the acid tests of status as self- employed is the extra degree of independence in being able to take work from whatever source and turn work down.

A recent addition is to determine who has the beneft of any insurance cover that might be available (see British Telecommunications plc v James Thompson & Sons (Engineers) Ltd [1999] 1 WLR 9).

All of these are useful in identifying the status of the worker but none of them is an absolute test or is definitive on its own.

18.2.5 Irregular situations

Certain types of work have proved more likely to cause problems in the past than have others. Not every working relationship is clear cut and judges and the members of tribunals have been called on to make decisions, sometimes based on the factors we have already considered. Often their answer will depend on the purpose of the case. In this way the court might seek to bring a person within industrial safety law although they appear to be self- employed.

Casual workers

Such workers have traditionally been viewed as independent contractors rather than as employed. This may be of particular signifcance since modern employment practices tend towards less secure and less permanent work.



O’Kelly v Trust House Forte plc [1983] 3 WLR 605

Here it was important for ‘wine butlers’, employed casually at the Grosvenor House Hotel, to show that they were employees in order that they could claim for dismissal. They had no other source of income and there were a number of factors consistent with employment. However, the tribunal took the view that, since the employer had no obligation to provide work and since they could if they wished work elsewhere then there was no mutuality of obligations and they were not employed.

The House of Lords has also subsequently confirmed this lack of mutual obligation test of employment status in casual work.



Carmichael v National Power plc [1998] ICR 1167

The case involved a tour guide at Sellafeld, a nuclear power station. She was given work as required and paid for the work done and tax and National Insurance contributions were also deducted. However, the House of Lords eventually decided that the critical factors were that there was no obligation to provide work and no obligation on the woman’s part to accept any that was offered. She was therefore held to be an independent contractor. It is interesting to note that the Court of Appeal had reached an entirely different result, which appeared to have recognised the difficult circumstances under which people are now often forced to accept what amounts to, but is not necessarily classed as, employment.

Agency staff

Many large companies now hire staff through employment agencies. On past cases they have not always been seen as employees of the agency.



Wickens v Champion Employment [1984] ICR 365

Here it was held that the agency workers were not employees since the agency was under no obligation to find them work and there was no continuity and care in the contractual relationship consistent with employment.

Workers’ co-operatives

Again it is uncertain whether such workers would be employees or not. Usually we would expect them to be so. However, there are instances where such workers have been classed as self- employed.



Addison v London Philharmonic Orchestra Ltd [1981] ICR 261

The orchestra operated as a co-operative. The musicians could do other work on their own account. It was held that they were subjecting themselves to discipline rather than control as employees and therefore were independent.


People who work from home, usually women with young children, are a very disadvantaged sector of the workforce. They tend to work for little pay and have few rights. There is obviously little control over the hours that they work. Nevertheless, working in areas such as the garment industry, they normally fall into a general framework of organisation. They were in the past always considered to be independent contractors, which is well illustrated in the case law. However, some cases have suggested otherwise.



Nethermere (St Neots) Ltd v Taverna and Gardiner [1984] IRLR 240

Here workers in the garment industry were held to be employees because it was felt that they were doing the same work as employees in the factory, they were merely doing it at a different location, at home.


Apprenticeships were traditionally subject to their own distinct rules but there are few of these traditional apprenticeships now. In the case of trainees the major purpose in their relationship with the ‘employer’ is to learn the trade rather than to actually provide work. Therefore they have usually not been classed as employees.



Wiltshire Police Authority v Wynn [1980] QB 95

A female cadet tried to claim unfair dismissal, which required proving first that she was an employee. While she had been placed on various attachments, was paid a wage, could do no other work and had set hours, she was only undergoing training with a view to becoming a police officer and it was held that she was not yet employed.

Labour-only sub-contractors (the lump)

At one time such workers were very common in the construction industry where they would do work for a lump sum. There are obvious advantages to both sides in not making tax and National Insurance contributions. These workers are classed as self-employed.

Crown servants

People working for the crown were traditionally viewed as not being under a contract of employment. This meant that they had very restricted rights. The trend in modern times has been to move away from this position.

Office holders

An office is basically a position that exists independently of the person currently holding it. So the general category might include ministers of the church and justices of the peace. The picture on these is confused but it has been held that there is no vicarious liability by the church.


A director may or may not also be an employee of the company. This will inevitably depend on the terms of the individual contract.

Hospital workers

Obviously vicarious liability for the work of people in health care can be critical. Nevertheless, the traditional view in Hillyer v Governor of St Bartholomews Hospital [1909] 2 KB 820 was that a hospital should not be vicariously liable for the work of doctors. This was justified on the grounds that hospitals generally lacked adequate finance before the creation of the National Health Service. The more recent view, expressed in Cassidy v Ministry of Health [1951] 2 KB 343 is that hospitals and health services should be responsible for the work done in them.



Quick quiz

Consider whether the following would be classed as employees using the tests above.

  1. Sarah, a machinist, who works from home stitching shirts from pieces of cloth pre-cut and delivered by Tej, who also deducts National Insurance payments from her pay but leaves her to settle her own tax. Tej owns the sewing machine that Sarah uses.

  2. Eric, a plasterer, who travels round building sites and works for cash payments. Neither he nor builders that he works for pay tax or NI for him. He uses his own tools.

  3. Coco, a circus clown, who also sells tickets before performances and helps to pack up the big top when the circus goes on to the next town. He also drives one of the lorries that transports the circus. The circus owner says that Coco is self-employed.

  4. Alistair is a consultant orthopaedic specialist. He is paid a full time salary by an NHS Trust but spends three days per week seeing private patients.

18.3 The test of liability

18.3.1 Torts committed in the course of employment

We have already discussed whether or not it is fair to impose liability on an employer for torts committed by his employee. Since it is a potentially unjust situation it is strictly limited and the employer will only be liable for those torts committed while the employee is ‘in the course of the employment’.

What is and is not in the course of employment is a question of fact for the court to determine in each case. It is often difficult to see any consistency in the judgments. It seems inevitable that judges will decide cases on policy grounds and this may explain some of the apparent inconsistency.

Regardless of the reasoning applied in them, there are two lines of cases:

those where there is vicarious liability because the employee is said to be acting in the course of the employment;

those where there is no vicarious liability because the employee is said not to be acting in the course of employment.

It is very hard to find a general test for what is in the course of employment. However, courts have appeared to favour a test suggested by Salmond that the employer will be liable in two instances:

for a wrongful act that has been authorised by the employer;

for an act that, while authorised, was carried out in an unauthorised way.

Authorised acts

An employer then will inevitably be liable for acts that he has expressly authorised, and, since an employee is only obliged to obey all reasonable and lawful acts, he could refuse to carry out tortious acts that the employer instructed him to do.

The more difficult aspect of this rule is whether the employer can be said to have authorised a tortious act by implication and should therefore be liable. At least one case has suggested that this is possible.



Poland v Parr [1927] 1 KB 236

The employee was a carter. He assaulted a boy in order to stop him from stealing from his employer’s wagon. The boy fell under the wagon and was injured as a result. The employer was held to be vicariously liable for the assault since the employee was only protecting the employer’s property, which by implication he had authority to do. He was acting reasonably and honestly in protection of the employer’s property.

As Lord Atkin explained:



‘Any servant is, as a general rule, authorised to do acts which are for the protection of his master’s property.’

Authorised acts carried out in an unauthorised manner

Most employment involves some form of discretion on the part of the employee. The employer may direct the specific work to be done and even to an extent the method by which it should be carried out. Almost inevitably employees will carry out work making decisions of their own as they go along. In some circumstances they may carry out acts that are completely unauthorised. The significant point to establish that the employer is still liable for their tortious acts is that they are actually still engaged in the work for which they are employed and that the tort arises out of this work. An employer can be liable then for unauthorised acts in a variety of ways.

Where the employee is still engaged in his own work but does something even though this has been expressly prohibited by the employer.



Limpus v London General Omnibus Company [1862] 1 H & C 526

At the time of the case buses were horse drawn. Bus drivers had been specifically instructed not to race because of the dangers to themselves and to the public. When they did and the claimant was injured the employer was held vicariously liable. The drivers were authorised to drive the buses but not in the manner they did.

Where the employee carries out work that is authorised but is doing the work negligently.



Century Insurance Co Ltd v Northern Ireland Transport Board [1942] AC 509

A driver of a petrol tanker was delivering to a petrol station. In lighting a cigarette he carelessly threw down a lighted match causing an explosion. The employer was still held liable since the driver was in the course of employment, and merely doing his work negligently.

Where the employee gives unauthorised lifts contrary to instructions.



Rose v Plenty [1976] 1 WLr 141

Here a milkman continued to use a child helper despite express instructions from the employer not to allow people to ride on the milk foats. When the boy was injured partly through the milkman’s negligence his employer was held liable. The milkman was carrying out his work in an unauthorised manner. Lord Denning suggested that the employer was liable because it was benefting from the work undertaken by the boy.

In his judgment Lord Denning identifed:



‘An employer’s express prohibition of the doing of an act is not necessarily such as to exempt the employer from liability, provided that the act is done not for the employee’s own purpose, but in the course of his service and for his employer’s beneft.’

Lord Scarman applied the principle to the case:



‘Why was the plaintiff being carried on the float when the accident occurred? [He] was there because it was necessary that he should be there in order that he could assist, albeit in a way prohibited by the employers, in the job entrusted to the servant by his employers.’

Where the employee exceeds the proper boundaries of the job.



Fennelly v Connex South Eastern Ltd [2001] IRLR 390

A ticket collector got into an argument with a customer whom he believed had not paid the appropriate fare and he then assaulted the customer. The Court of Appeal held that, since the act occurred within the course of employment, the employer was liable for the assault.

Where the employee applies force in order to achieve the employer’s objectives.



Bayley v Manchester, Sheffeld and Lincolnshire Railway Co [1873] LR 8 CP 148

Part of a porter’s work was to ensure that passengers got on to the correct train. Here the porter pulled the claimant from the train in order to do so and the employers were vicariously liable for the assault.