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.

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.

■ 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.

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.

CASE EXAMPLE

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.

CASE EXAMPLE

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.

Outworkers

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.

CASE EXAMPLE

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.

CASE EXAMPLE

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.

Directors

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.

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:

JUDGMENT

‘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.

CASE EXAMPLE

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.

CASE EXAMPLE

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:

JUDGMENT

‘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:

JUDGMENT

‘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.

CASE EXAMPLE

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.

CASE EXAMPLE

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.