The doctrine of vicarious liability provides that where an employee commits a wrong in the course of their employment, not only may that employee be directly liable for their action but also their employer may be held vicariously liable for that employee’s wrongdoing. Essentially, the employer may be liable for their employee’s conduct. The most common example is where an employee is guilty of negligence which results in injury to a third party such as a customer. That third party may take legal action against the employer in such circumstances. There are four primary reasons as to why this rule exists and why employers are held liable:
- The employer is in control of the employee’s actions through orders and instructions
- The employee would not have been in a position to commit the wrongdoing but for the fact that s/he was carrying out the employer’s activities
- The employer is usually in a better position to absorb the financial loss of a civil claim (e.g. liability insurance, ability to increase prices to absorb loss etc.)
- Vicarious liability ensures that employers promote good practice and train employees properly in terms of working practices and health and safety.