Businesses could be liable if an employee commits a negligent act while at work, the Supreme Court has ruled.
The landmark judgement, which was confirmed this week, will have considerable consequences on the way employers train and monitor their staff, according to North West law firm Kirwans, who say the judgement is “extremely significant” and one that could have far-reaching implications for businesses.
The warning comes after Morrisons were held responsible for the actions of an employee who kicked and punched a customer at one of its’ petrol forecourts in Birmingham in 2008.
Employer found ‘vicariously liable’ for employees behaviour
The Supreme Court ruled that Morrisons were “vicariously liable” for their employee, Amjid Khan, when he assaulted a customer, Ahmed Mahmoud, on the supermarket’s premises.
Being “vicariously liable” means that the supermarket giant was held responsible for its employee’s negligent act.
The Court heard how the supermarket employee followed Mr Mahmoud to his car after a disagreement. Mr Khan told Mr Mahmoud not to return to the petrol station and then proceeded to assault the customer.
The Supreme Court provided judgement stating that Mr Khan was “purporting to act about his employer’s business” and therefore Morrison’s were found to be vicariously liable for their employee’s actions.
Supreme Court ruling could have huge implications for employers
Kirwans insist recent rulings mean that an employee’s failure to exercise appropriate duty of care at work could have dire consequences for employers.
Personal Injury solicitor James Barker said, “The Supreme Court’s judgement is extremely significant and could open the floodgates for similar cases where an employee commits a negligent act, in a place of work, during working hours. Under this new ruling, liability is no longer a matter for the individual alone; the employer will now also be accountable.
“It is going to be very difficult for an employer to absolve themselves of liability on the basis of this judgement. If a claimant can show the defendant’s act was committed by them while working then a case could rule in favour of the claimant.
“This would have widespread implications where customers, or even fellow colleagues, have been seriously hurt by an employee.”
When might a small business be liable for an employee’s actions?
Some examples of when a small business could be held liable for an employee committing a crime are:
- Assaulting a fellow member of staff or member of the public whilst the employee is at work.
- An employee causing injury unintentionally to a fellow employee. For example driving a forklift truck or van into them.
- “Horseplay” gone wrong e.g. throwing something at another member of staff.
- Causing damage due to carelessness, like throwing a cigarette that causes a fire.
- Dropping liquid substances such as a cup of tea on the floor and not clearing it up which causes another employee to slip and sustain injury.
Actions a business should take
When asked by ByteStart to outline what small business owners should do in response to the Supreme Court judgment, James advises businesses to inform employees of their obligations to fellow members of staff and members of the public whilst at work, and of the risks that their actions could have on the reputation, viability and future of the company that they work for.
“Their behaviour could cost their company both in terms of finance and also reputation. It should be made clear to all members of staff that such behaviour is not to be tolerated and dismissal could ensue.”
It is also vital that employers discuss with their Employers’ Liability insurers whether the recent developments in relation to vicarious liability claims is covered in their Employer’s Liability insurance policy – which they are obliged to have in law.
“If you do not have a policy of insurance it is vital that one is obtained as soon as possible” he concluded.
More from ByteStart
For help and guidance on legal matters regarding employing staff, here are just some of ByteStart’s selection of legal guides;
- A Guide to the National Living Wage for small business owners
- Dismissing a member of staff – what you need to do to stay on the right side of the law
- The ‘Fit for Work’ scheme – what it means for employers
- A guide to dealing with workplace bullying
- How to prepare for and handle an employee grievance
- Guide to Auto Enrolment – 12 key facts small businesses need to know
- Health & Safety compliance for small businesses – where do you start?
And these will help you on other business law issues;
- Which types of insurance must your business have?
- The Consumer Rights Act 2015 – 7 Key points for small businesses
- The new business laws affecting small businesses in 2016
- Intellectual Property – A summary of IP law for small businesses
- Guide to Copyright Law – What is protected?
- Shareholders’ Agreements – Why you should get one if you are setting up a company with others
- What is a confidentiality agreement or ‘NDA’ and when might a small business use one?