Employer's Liability Towards Unauthorized Act of Employees

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Vicarious Liability
Vicarious liability refers to the liability of a person for the tort committed by another person, for example, the liability of an employer for the acts and omissions of his employees. As a general rule, an employer should only be liable when the employee’s wrongful act is reasonably foreseeable as an event that would take place as a result of the employee’s duty. However, there were cases where the employer was held liable for the wrongful act of his employees, even though such act was not authorized by the employer.

Close Connection Test
In Ming An Insurance Co. (HK) Ltd. v Ritz-Carlton Ltd. [2003] 1 HKC 225, two pedestrians were injured by a limousine driven by a doorman employed by the Ritz Carlton Hotel (“the Hotel”). The limousine was actually belonged to a service company from which the Hotel hired their limousines and chauffeurs. The forecourt staff of the Hotel developed a practice of buying food elsewhere. One of the forecourt staff members would go to collect the food and sometimes the staff may persuade a limousine chauffeur to drive him to the location and back. On the night of the accident, a bell-boy was designated to go out to collect food for the forecourt staff. As the limousine’s chauffeur had gone off-duty at that time and the keys was left with the doorman, the doorman became the driver of the limousine. The accident happened when the doorman drove the bell-boy in the limousine to collect food.

Both the Court in the first instance and the Court of Appeal held that the driving of the limousine by the doorman to collect the food at the time of the accident was an unauthorized act and the Hotel was not vicariously liable for the doorman’s negligence because the doorman had been acting beyond the scope of his employment.

The case went to the Court of Final Appeal. Although the doorman’s use of the limousine to collect food was unauthorized by the Hotel, the Court of Final Appeal allowed the appeal and held that such act was still within the scope of his employment with the Hotel.

The test for vicarious liability is that employers were liable for the torts committed by their employees in the course of their employment. An employee’s tort is deemed to have been committed in the course of his employment if it is either (a) something authorised by his employer or (b) an unauthorised mode of doing something authorised by his employer.

It was found by the Court of Final Appeal that the “unauthorised mode” limb of the test can give rise to difficulty. The question to be asked is whether the employee’s unauthorized tortuous act was so closely connected with the employment that it would be fair and just to hold the employer vicariously liable.

The Court of Final Appeal considered that the concept of employment was not a narrow one and must be viewed broadly when applying the “close connection” test. In regard to vicarious liability, the nature of the employment was not to be ascertained merely by attempting to tabulate the employee’s duties. It was necessary to stand back and see how the employer’s activities were actually carried out and how they exposed the public to the risk of tortious harm caused by the employee.

In this case, the practice of collecting food from outside was not only a purpose of the Hotel’s staff but of the Hotel itself for it was obviously in the interests of the Hotel that its staff were adequately fed. Therefore, under the then prevailing practice, collecting food outside the Hotel was properly to be regarded as incidental to the employment of the Hotel’s staff involved and the doorman’s negligence was so closely connected with his employment that it was fair and just to hold the Hotel vicariously liable.

Statutory Provision
There are statutory provisions which provide that the employer would be liable for the wrongful act of his employees even though such act was done without the employer’s knowledge or approval. In the Sex Discrimination Ordinance, Cap.480, the Personal Data (Privacy) Ordinance, Cap.486, the Disability Discrimination Ordinance, Cap.487, the Family Status Discrimination Ordinance, Cap.527 and the Race Discrimination Ordinance, Cap.602, they all contain provision which provides that anything done by a person in the course of his employment shall be treated for the purpose of the above Ordinances as done by his employer as well as by him, whether or not it was done with the employer’s knowledge or approval.

Under these statutory provisions, the employer will be liable for the violation of personal data privacy, discrimination and harassment committed by his employees unless the employer can prove that he took such steps as were reasonably practicable to prevent the employee from doing that wrongful act.

In B 對皇上皇集團有限公司[2012] HKCU 1206, the Plaintiff, a female employee of the Defendant, was sexually harassed by another male employee of the Defendant. The Court held that the Defendant is liable to the Plaintiff for the sexual harassment committed by its male employee relying on the above statutory provision.

Conclusion
The close connection test applied by the Court in determining whether the employer is vicariously liable for his employee’s tort committed during an unauthorized course of conduct and the statutory provisions mentioned above give a better chance to the victims of tort to recover damages from the employer. Hence, to minimize the risk of being sued for the unauthorized act of employees, it is important for the employers to train, instruct and supervise their employees properly and closely examine all the activities of the employees which may be regarded as incidental to the employment and may give rise to the risk of a tortuous act that caused damage to third parties, including other employees in the work place.

 
IMPORTANT:
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
 
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Published by ONC Lawyers © 2013