Vicarious Liability and how can it affect your Business?

Vicarious Liability can be a somewhat overlooked topic, particularly when responsible for staff, so my blog this month tackles what it is, how it can affect your business and what you can do to fool proof your business!

What is Vicarious Liability

A definition of Vicarious liability in the workplace can be explained as where an employer is held liable for the wrongdoing of an employee, or someone whose role is similar to that of an employee, even where the employer has done no wrong itself.

However, to make this clearer it is when an employer could be held responsible for an employee’s actions.

For example, if an employee discriminates against someone else, by law their employer could also be held responsible.

There are three areas which need to be established to determine such vicarious liability and they are:

  1. The relationship between employer v employee
  2. The very act of negligence committed (i.e., the wrongdoing)
  3. That the act was committed within the course of employment.

Whether the employee and employer are both held responsible depends on whether the discrimination is linked to the employee’s work. The law describes this relationship as ‘acting in the course of employment’. The discrimination could happen at work or outside the workplace, for example at an external event, work party, or through social media that’s linked to work.

So for example:

Bill, a shop assistant, makes a negative comment to someone they work with about their race. Bill’s employer could also be held responsible for that discrimination.

An employer might not be held responsible if an employment tribunal decides they took all reasonable steps to try to prevent discrimination, harassment and victimisation by staff.

Although not recent case law, this article from Pure Employment Law tells of two vicarious liability cases which were upheld by The Supreme Court….

Other means of committing Vicarious Liability are:

  1. Bullying and Harassment
  2. Breach of trust or confidentiality

What an employer can do to prevent discrimination

Employers can implement various means of preventing the risk to their business of vicarious liability occurring and then themselves being held liable too.

The ways which they can do this are by:

  • having an up-to-date equality policy
  • providing regular anti-discrimination training to staff
  • making it clear how staff can complain if discrimination happens
  • regular one-to-one catchups between employees and their line managers, to help build positive working relationships

By ensuring that the above is in place it can help by:

  • Making sure your workplace treats employees fairly
  • Making it less likely you’ll be held responsible for discrimination carried out by an employee

While it will be rare for the majority of employers to have to defend claims of vicarious liability, the potential financial and reputational risks that do exist means that employers should be reviewing their risk profile on a regular basis.

By having a watertight Staff Handbook or HR Policies and Procedures these can be the foundations of reducing the risk for your business or organisation.

Additionally, ensuring that your staff are adequately equipped to deal with such instances through thorough training and supportive measures during their time with your business or organisation can also lessen the chances of this happening.

Contact Us

Should you wish to discuss training, creating a staff handbook or policies for your business to ensure that you avoid any vicarious liability claims, then please do get in touch.


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