Vicarious Liability : Exploring the Tests of the Employer-Employee Relationship
Essentially a person is only held liable for his actions and not for the acts done by others. This is where the doctrine of vicarious liability steps in. The word ‘vicarious’ means “experienced or realized through imaginative or sympathetic participation in the experience of another” and the word ‘liability’ means “the state of being legally responsible for something.”
Vicarious liability as a doctrine in common law is a form of strict, derivative liability wherein a one person is responsible for the tortious acts of another. Tracing the origins of this doctrine, one has to go back hundreds of years into ancient Roman and German law. To support his hypothesis that this liability has a Roman origin, Oliver Wendell Holmes relied on the premise that Romans used to hold the head of the house liable for the misconduct of their families, and later, the liability under this law was extended to the misconduct of Roman Slaves. John Henry Wigmore opined that the English Judiciary in regard to vicarious Liability finds its origin in primordial German law wherein a rule very similar to the Roman Rule was followed in that the master of the land was held liable for the delinquent act of the house members.
For the application of the doctrine of vicarious liability, firstly a relationship between the two parties has to be established and secondly the tortious act shall in some way be linked to such relationship.
The three relationships in which this doctrine is applicable are of
• Principal and Agent
• Master and Servant
• Employer and Employee
.
Principal and Agent
The three main relationships within which vicarious liability functions essentially stem from the fundamental philosophy of a principal agent relationship
This is an arrangement wherein the principal legally appoints the agent to act on his/her behalf. The liability of the principal for the acts of the agent is based on the principle – ‘Qui facit per alium facit per se’ which essentially means that “He who acts through another does the act himself.”
Generally it is seen that the principal does not expressly ask his agent to commit the tortious act, but then again the authority to commit the wrong can be express or implied for the principal to be vicariously liable. It also has to be proven that the agent, in committing the wrongful deed acted in the ordinary course of performance of his duties. The liability here is joint and several therefore it is upto the plaintiff to choose who to bring an action against.
Master and Servant
The vicarious liability of the master for the acts of his servant is based on the maxim ‘respondeat superior’ which means ‘let the master answer’. It puts the master on the same plain of liability as that of the servant. It also derives validation from the aforementioned principle of ‘Qui facit per alium facit per se’. The liability in this relation is joint and several as well giving an option to the plaintiff to choose who to bring an action against.
Employer and Employee
An employer is vicariously held liable for the acts of his employee if he commits a wrongful deed acting within the course of his employment. There are three main requirements which are required to be fulfilled for the application of liability in this relationship.
1. The relationship of employer-employee must be subsisting at the time of commitment of the wrongful deed.
2. The employee should have committed the delict.
3. The employee, in committing the delict must have acted within the course of his employment.
In other words the liability here would be joint and several and the aggrieved party can sue either the employee (as the principal person responsible in law) or the employer (who is deemed by the law to be indirectly, or vicariously) or both.
The rationale of vicarious liability can be explained under this relationship with the following reasons –
1. When an employer hires an employee, the employer will be liable for the risk caused by his employees’ negligence. Where it benefits from the use of employees, he should also accept all the risk that comes with those employees.
2. It makes sure the employers have taken due care while hiring ,training and keeping an eye on the employees. Basically, the business should be aware of these kinds of liabilities ‘in the course of employment’. This rule helps in keeping a duty of responsibility towards the society.
3. Employers being the superior party monetarily compared to their employees they can pitch in their resources to pay off the injured party/parties and make sure that they are being completely compensated when the employees do not have the enough resources.
Even though, the employers have the freedom to choose their employees but to declare the validity of their relationship for the determination of liability the courts of various countries have devised a few tests overtime.
Our paper aims to explore the development and validity of the aforementioned tests.
Control Test
One of the earliest test for determining the employer-employee relationship was the control test. According to this test, a person is said to be the employee if the content of his work and the manner in which the work is executed by him is controlled by the employer. In other words, it would be the employee who would establish the work policy followed by the employee and also take charge of the employee when he is carrying out his duties.
The control test of employer-employee relationship first made an appearance in 1880 under the authority of ‘Yewens V Noakes’ . The aforementioned case was an English tax law case which made the distinction between a master and a servant. Noakes, hop-merchant, appeared by his agent against a charge for inhabited house duty of 500l. at 9d. per pound upon the houses Nos. 11 and 13, Southwark Street, Borough, for the year 1876–67, such houses having an internal communication throughout, upon the ground that they were solely used for trade purposes, and only otherwise occupied by a caretaker. The concerned caretake lived in the house with his family and a servant. The key question that arose in this case was if the caretaker came under the definition of a servant or other person” within the meaning of the applicable taxation law of the United Kingdom. It was held, in this instance, that the caretaker did not come in the ambit of the definition. Lord Bramwell stated that, "a servant is a person who is subject to the command of his master as to the manner in which he shall do his work.”
The application of control test was also extended to borrowed employees. In ‘Mersey docks and harbour board v Coggins and Griffith (Liverpool) Ltd’ , the plaintiff was injured by a mobile crane driven by an employee of the defendant’s company. The pendants maid the claim that at the time of the accident, the concerned crane was hired by another company along with the driver and that at the time, the driver was employed by the other comapany. The court held the defendant company liable with the view that an employee would still fall into the ambit of employment of the regular employer, even if his services are being borrowed by another party as the presumption of control by the original employer is still present.
However, a major flaw of the control test was highlighted in the case of ‘Walker v Crystal Palace Football Club’ , where the plaintiff, a professional football player was hired by the defendant company to play football with the defendant’s team and to attend the training session being held regularly. During one such session the plaintiff was injured and brought a suit against the defendant company for compensation. The court held that he was employed under contract of employment because the club has a control in form of training, discipline and methods of play.
This case brought forward the issue of skilled employees and how the control test was not sufficient to include this group of professionals in the definition of the employee-employer relationship.
Integration Test
What the integration test hopes to achieve is to establish the relation between the employer and employee. Basically, what it does is to clearly establish if the relation between the people is of employer-employee or of a contractual relationship. If the relationship is on a contractual basis, then the employer will not be vicarious liability. What we must check is that if the purpose of the employee is under the scope of the employer. For example a university will be liable for the actions of all their professors as their job is integrated with the scope of the university. Integration test was first established in the ‘Cassidy v Ministry of Health’ In this case, a patient (the plaintiff) goes to a hospital for a routine treatment and due to one of doctor’s negligence the patient’s right hand had become stiff. The question came if the hospital was vicariously liable for the actions of the doctor. Using the integration test we can say that the scope of the hospital is to help the people and doctors will come under the scope of the hospital as in their efforts are integrated. So what Lord Denning said was that the doctor was chosen for the job and his work is fully integrated into the organization (the hospital). So, the hospital will be vicariously liable for the actions of the doctors. With applying the integration test in this scenario, we can say that the doctors work in under the scope of the hospital as in with their main course of job i.e. healing people. I would also like how this works under the contractual scenario. In the case of ‘Stevenson, Jordan & Harrison Ltd v MacDonald and Evans’ there was an engineer working on a different capacity in a firm. He wrote a book with his knowledge and taking the experience from his work. The firm sues him saying that the work will come under their patent. The question arose if the employee will fall in this as an integrated employee. And to establish if whether his or her work is done as ‘an integral part of the business’ or whether it is merely an accessory to it.The Court further stipulated that a person is considered an employee under a “contract of service” when the work is integrated in that of the business and considered an integral part of the business, whereas an independent contractor for services is merely an accessory to the business and, thus, not an employee. On the facts of the case, the Court concluded that the engineer’s contract was mixed between the two at different times. So they said that he can publish the book but they he had to remove the part which was from his experience from the firm. The huge drawback in this test will be to clearly not differentiating between “integration” and “organisation” and that it’s straightforward.
Multiple Test
In the complex settings of modern industry in contemporary times, the courts now accept that no single test could be decisive in employer-employee relationship. Time and again, it has been seen that the control test and the integration test have been difficult to apply due to lack of control of the employer over the work done or how it should be done. This leads to lack of clarity in the condition. Hence the court advanced a number of tests that could be more fitting and from this the multiple test was developed.
Also known as the economic reality test, the multiple test originated in the case of ‘Ready Mixed Concrete (South East) Ltd v Minister of Pensions’ . This test integrates the control and the integration test as it considers that though each point is relevant, no single point can be determinative in the employer-employee relationship as it can be a complex issue. In this case, a mixed concrete company contracted a driver to deliver concrete and asserted his wages and expenses. The contract asserted him an “independent contractor” and along with certain conditions like the driver was to purchase his own vehicle, to be painted in company colours and be driven by himself according to the rules of the company. The question arose whether he was an employee or an independent contractor since the company was not paying his national insurance contributions.
Justice Mckenna in this case stated that to determine the employee status, three conditions had to be satisfied which include: firstly, the employee has settled to provide his service in return for remuneration; secondly, a certain degree of control by the employer and thirdly, the “other contract provisions should be consistent with its being a contract of service.” First the Minister found him employed under contract of service but later the case went to the high Court and it was seen that the employee was a ‘small business man’ and thus under contract for services.
In ‘Montreal v Montreal Locomotive Works Ltd’ , the company built a plant to manufacture tanks and gun carriages “for and on behalf of the government” and was asked to pay taxes. If it were an agent, it would not be liable for the same but if it carried on the business on its own it could. Lord Wright here held that the earlier control test could not be conclusive but a more complex test had to be used involving control, ownership of tools, chance of profit and risk of loss. The Supreme Court of Canada held that the company was merely an agent in this case. The crucial point to be considered here is whose business it is. In the present case, the company did not supply any funds and took no liability; every risk was taken by the government.
Under these developments, under a variety of work situations, it can thus be seen that the control test is still used but it is no longer the sole concluding factor. Other factors that are of importance are a)whether the man performing the services provides his own equipment b) hires his own helpers c)degree of responsibility for investment and management
To conclude , the aforementioned cases exhibit the application of different tests over time, keeping up with the changes in technology and the skills of both the employers and employees. A closer look, however, would reveal a change in the magnitude of control that an employer is expected to maintain over the functions of the employee. The initial control test that was highlighted in the case of Yewens V. Noakes (1880), the employer was expected to retain control not only of the employee’s work but also how the work was done by him. The test was developed in 1880 and was not able to envision the employment of skilled personnel. Once this flaw was detected, a new test came into the fray. Integration test went outside the ambit of control and made a major distinction between contract of service and contract for service. It attempted to determine the role of an employee’s work and how it was integrated into the functioning of the business. This test also consisted of the control element, however it wasn’t the only element that was considered to determine the relation of an employee and employer. The Multiple test, also known as the economic reality test, emphasised on other factors that needed to be considered along with the element of control. The development of these tests moved along with the social realities which showed an increasing complexity that could not just be assessed only by the magnitude of control over the employee. As the working personnel becomes more skilled and complex, we may see a further change in the rules defining employment.