Can an employer be held vicariously liable for their employee?

Vicarious liability occurs when one party can be found liable for another party’s actions. In an employer/employee relationship, employers can be held legally responsible for acts of discrimination or harassment that occur in the workplace or in connection with a person’s employment. In order to minimise an employer’s liability, they are required to have taken all reasonable steps to prevent any discrimination or harassment from occurring in the workplace or take the appropriate steps to resolve any incident of such nature.

By failing to do so, it may be inferred that the employer has not provided their employees with a safe and healthy workplace and can be held vicariously liable for their employee’s faults.

The case of  Prince Alfred College Incorporated v ADC [2016] HCA 37 settled the law on whether an employer would be liable for an employee’s criminal conduct. The High Court in this case assessed whether Prince Alfred College (‘PAC’) would be liable for the sexual assault conducted by the employed housemaster against ADC while ADC was a student at PAC.

Within their considerations, they developed the “relevant approach” test that would ascertain an employer’s liability. The test involves considering the following aspects;

• whether the employer has assigned any special role to the employee; and
• the position the employee is regarding the victim.

Additional factors that are needed for consideration include the employee’s authority, power, trust, control and the ability to achieve intimacy with the victim.

The high court applied the “relevant approach” and held that PAC was vicariously liable for the sexual assault committed by the employed housemaster. This was based on the “close connection” between the boarding master and the opportunity to abuse, given the relative power, intimacy and authority the housemaster held had at the college and ADC’s vulnerability as a student.

What can I do to limit my liability as an employer?

As an employer, you hold an implied duty to provide your employees with a safe and healthy working environment. This includes a safe space to work that is free from potential harms and crime. To ensure you are not held liable for any criminal conduct carried out by employees, you will need to do all that is reasonably necessary to prevent any discrimination or harassment.

What may be reasonably necessary will vary on a case by case basis but may include:

• seminars on sexual assault in the workplace;
• providing employees with a safe space to disclose any concerns that they may hold;
• following up on these concerns;
• making investigations into any discrimination or assault complaints; and
• taking appropriate disciplinary actions against any perpetrators or potential triggers in the workplace.