Vicarious Liability: are employers responsible after hours?

The facts

Northampton Recruitment held an organised Christmas party for its staff. At the end of the party, employees travelled over to the hotel where they were staying, and continued drinking at the company’s expense.

In the early hours, John Major, the company’s Managing Director, ushered a number of employees into the lobby, after he was challenged by a colleague, Clive Bellman. Major became aggressive, and ultimately punched Bellman in the face. Bellman suffered brain damage as a result.

The law

Whether vicarious liability applies to employers or not depends on the relationship between the ‘wrongdoer’ (in this case, John Major), the employer (Northampton Recruitment), and the wrongful act (the attack). The court has to examine whether it’s ‘just and reasonable’ to hold the employer responsible for its employee’s conduct.

In this case, the Court of Appeal looked at two factors: John Major’s job, and the connection between his position and his conduct.

In relation to the first point, the court looked at the fact that Northampton Recruitment was a relatively small company: Major was one of three directors and shareholders, and the day-to-day manager of the employees. He was responsible for all management decisions, as well as the disciplining of staff. The court, therefore, concluded that the nature of his role had a broad remit, and that he was an authoritative figure.

With the second point, although the drinks in the hotel were not an organised work event, Major continued to exert his authority by organising the taxis, paying for a number of the drinks, and ordering the remaining employees into the lobby in the early hours, where he chose to use his seniority over his staff.

The Court of Appeal held that the attack on Bellman arose out of a misuse of the power that Northampton Recruitment had entrusted Major with. Moreover, the attack wasn’t personal – he carried it out while purporting to act within the business. There was no shift in the relationship between the attendees that night; the staff remained Northampton’s employees, and Major continued to exert his dominance throughout the evening.

What does this mean for employers in the future?

This case shows that employers can be vicariously liable for their employees’ actions outside of normal business hours – including social events outside the remit of ‘work’, like impromptu Christmas gatherings. But, Lord Justice Irwin has heavily caveated this case, making it clear that these are unusual circumstances where Major had seemingly unfettered authority which he used in his actions against an employee.

Vicarious liability will not arise simply because colleagues argue about work-related matters after hours.