Taking the rap for your workers’ wrongdoings

Where there’s blame, there’s a claim, or so we are told. There are times, however, when employers have to pay up even when they are not in the wrong. This is due to a principle known as ‘vicarious liability’, where employers are liable for wrongdoing committed by their employees during the course of their employment.

In a typical case – for example, where a transport business is held liable for injuries inflicted by the careless driving of one of its drivers – it is argued that the employer ought to be liable, because the incident can fairly be regarded as a risk of the type of business it carries out.

The facts

In Majrowski v Guy’s and St Thomas’s NHS Trust, the claimant alleged that, throughout his time working for the trust, he was bullied and harassed by his line manager. He claimed damages for the resulting stress and anxiety. Unusually, he did not sue the employer for negligently causing his stress. Instead, he alleged that his line manager was guilty of a breach of the Protection from Harassment Act 1997, and that the employer was vicariously liable for that breach.

The Protection from Harassment Act states that a person must not pursue a course of conduct that amounts to harassment of another, and which they know or ought to know amounts to harassment.

The decision

There were two questions for the Court of Appeal to consider:

– Whether as a general principle employers can be liable for breaches of a statutory duty which they have not broken, but has been broken by their employee

– Whether such liability can apply in the particular case of the Protection from Harassment Act.
The court answered in the affirmative on both counts.

Implications

What this means is that employers now face an additional form of civil liability for stress and anxiety where it has been brought on by harassment.

An employee can already sue an employer in the civil courts for negligently causing them stress by allowing harassment or bullying to take place, but that action requires proof of fault and foreseeability on the employer’s part.

Also, in the employment tribunal, the employee can sue for financial loss and injury to feelings if a fellow employee or manager harasses or bullies them for unlawfully discriminatory reasons, such as on the grounds of sex, race or sexuality. Here again, there is at least a limited element of employer fault at issue as the employer can escape liability if it can show it took all reasonably practicable steps to prevent the harassment.

In addition, the employee can sue for compensation for constructive dismissal if they walk out because of a manager’s bullying behaviour. The employer cannot defend itself in such a case by arguing that it was not to blame, but there is a limit on the maximum award that can be made, and no award can be made for injury to feelings.

The Majrowski decision requires the employee to sue in the ordinary civil courts rather than the tribunal, but ‘no win, no fee’ arrangements and legal expenses insurance make that less of a problem now. Of course, the employee also has to show that the manager or colleague pursued a course of conduct that amounted to harassment and which they knew or ought to have known amounted to harassment.

Furthermore, for the employer to be vicariously liable, the court must decide that there was a close connection between the employee’s course of conduct and the circumstances of their employment. However, as the court indicated in Majrowski, the manager’s supervisory responsibility for the employee will usually provide a sufficiently close connection. However, the employer has no defence that it did not authorise the behaviour, or that it tried to stop it, or that the anxiety suffered by the employee was not foreseeable.

Lessons

The 1997 Act only penalises courses of conduct amounting to harassment, rather than one-off incidents. HR is responsible for ensuring there are policies, codes of conduct and mechanisms for redress in place to help prevent such behaviour from occurring, or to nip it in the bud. However, since the company may still be held liable even if such measures are in place, it is a good idea to check whether such claims are covered by your company’s liability insurance.

By Peter Schofield, director of employment and legal affairs, EEF


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