Vicarious Liability and Employment Status Explained

Vicarious liability is when an employer can be held liable for a tort committed by an employee in the course of their employment. A tort is a civil wrong, such as negligence. The claimant must show that the worker committed a tort, that the relationship with the employer qualifies, and that the tort was sufficiently connected to the worker’s job.

How is employment status tested?

A court looks at the reality of the working relationship, not just the label in a contract. Relevant questions include:

• Control: How much say does the organisation have over what the worker does and how they do it?
• Integration: Is the worker part of the organisation’s business, rather than running a separate business?
• Economic reality: Who provides equipment, bears financial risk and has the opportunity to make a profit?

These factors are considered together; no single answer automatically decides whether someone is an employee. The approach in Ready Mixed Concrete v Minister of Pensions illustrates this overall assessment. An employer is generally not vicariously liable for the torts of a genuinely independent contractor, although some relationships that are not formal employment can be sufficiently similar to employment.

How does it apply?

Suppose a delivery driver negligently injures a pedestrian while making deliveries for their employer. If the driver is an employee, the employer may be vicariously liable because the negligence occurred while the driver was doing their job. If the driver had left work to pursue a purely personal errand, the connection with the job would need closer examination.

Exam mistake to avoid: Proving that someone is an employee is only one stage. You must also explain why the particular tort was committed in the course of employment; employment status alone does not make the employer liable for everything the worker does.