Business law is complex and international business law is even more convoluted. Definitions of terms such as ’employment’ itself is wholly ambiguous, thus making it difficult to ascertain what legal rights people have in the workplace both for employees and employers. Vicarious liability exposes this complexity. It is a common law principle that purports liability by an employer for the tortious acts of an employee delegated duties as requested and entrusted to act on their behalf. As a legal term, vicarious liability confirms that employers are thus responsible for negligible acts pertaining to discrimination and harassment that occur within the workplace by supervisors and management, individual or group employees, and agencies and contract workers with the ambiguity of the latter certainly exposing the complexity of the subject. It is complicated as an Australian legal doctrine primarily because of the absence of a clear and distinct definition vis-à-vis the various legislative formulations and the broad scope utilised by Australian federal, state and territory jurisdictions along with a culmination of common law interpretations. In addition to this complication, civil cases particularly pertaining to discrimination rarely reach the court due to the associated costs of such litigation and tend to be resolved prior through conciliation.
Employers must ensure that they have taken reasonable steps to demonstrate their commitment to the prevention of any form of discrimination and harassment as required by both Victorian and Federal legislation to prevent liability claims made against them, the liability itself used as a deterred to prevent human rights abuses. Whilst vicarious liability is customarily applied using judicial precedents rather than relying solely on legislation, in some cases particularly relating to sexual harassment the interaction with other provisions can effect and ultimately lead to an incongruous result, for instance in Jones v Tower Boot Co Ltd that exposes the necessary reach of vicarious liability – where an employee commits a serious act of sexual harassment though off-duty and thus appears that the employer is less likely to be liable as a consequence – in addition to claimants selecting one jurisdiction to reduce this probability of an absurd conclusion. The custom to utilise judicial precedents and thus apply the ‘Golden Rule’ of law, namely, to ensure that courts take a purposive statutory approach by appreciating the aim and purpose of the law and thus apply a fluid and flexible method favouring justice for the people, is in effect the reason for maintaining the broad and thus ambiguous definition of vicarious liability.
In order to initiate a better understanding of the subject, it is vital to establish an introduction on the scope of and interactions between legislations within the limitation of a non-exhaustive blog post, thus a brief account of anti-discrimination, human rights and industrial laws. Thus to begin, what exactly constitutes discrimination? In part two of the Equal Opportunity Act 2010 (Vic), discrimination is defined as, “direct or indirect discrimination on the basis of an attribute.” Direct discrimination is clearly purposed to treat an individual discriminately based on any of the attributes, whilst indirect discrimination occurs when a condition, practice or any such imposition that is likely to result or have an effect on an individual that disadvantages them due to an attribute. These attributes include age, sex, disability, race and religion amongst others. Discrimination can go even further, such as an individual’ past or intellectual capacity [too smart, not smart enough] or other physical attributes etc &c. As employers themselves must ensure that they do not breach their obligations as set by the law and reiterating the previously mentioned Golden Rule, namely that the law has be established to protect the rights of citizens and democratic principles in general, the scope of vicarious liability sits under the umbrella of human rights.
Generally, the scope of industrial laws fails to afford the protections offered by established anti-discrimination laws. In Victoria, this would include the Charter of Human Rights and Responsibilities Act 2006 (Vic) and the Racial and Religious Tolerance Act 2001 (Vic) along with the Equal Opportunity Act 2010 (Vic). In addition, a complainant must select which jurisdiction – namely State or Federal – they wish to pursue the proceedings. Under section twelve of the Age Discrimination Act 2004 (Cth) it states that a person is not entitled to institute a proceeding if a law relating to discrimination is dealt with by the State of Territory, thus a complaint can be lodged at the statutory commission within their state jurisdiction; however if so, they cannot proceed the complaint to federal anti-discrimination laws and jurisdiction. What that means is that if a complainant initiates a case under Victorian anti-discrimination law, they are not permitted to withdraw and apply for a recourse under Commonwealth anti-discrimination laws. Similar requirements are stated in other legislations, thus confirming that if someone has already made a complaint under Victorian legislation is therefore unable to commence proceedings at federal level. Nevertheless, there are differences between state and federal anti-discrimination laws – whilst minor – can impact on the application and operation of the law, as a consequence the complainant can initiate and select which jurisdiction they would prefer the proceedings to fall under (dependant on the scope and details of the claim made against the employer). While the Equal Opportunity Act 2010 (Vic) functions similarly to federal anti-discrimination law, an example of these differences can be seen between the Disability Discrimination Act 1992 (Cth) that states “circumstances are not materially different because of the fact that, because of the disability, the aggrieved person requires adjustments” obligations of which render a difference to the Equal Opportunity Act 2010 (Vic).
To continue further and assist with the amplification of pre-existing knowledge hidden in the corners of my mind, what exactly is vicarious liability? According to the Equal Opportunity Act 2010, vicarious liability is a person or agent engaging in conduct that contravenes discrimination as described earlier along with sexual harassment regulations as prohibited by the act. Sexual harassment is defined as an unwelcome sexual advance or requests for sexual favours along with conduct of a sexual nature that offends, humiliates or intimidates. In order to assess whether it is a vicarious liability claim, the negligible behaviour must have occurred during employment in addition to whether the employer has failed to take reasonable steps to prevent such contravention of the abovementioned. “A person who employs others to advance his own economic interest should in fairness be placed under a corresponding liability for losses incurred in the course of the enterprise.” In addition, vicarious liability holds a broader function, namely that the legislative obligations and requirements by employers works as a preventative measure or deterrent to reduce risk of harm against an employee. The ambiguity of vicarious liability lies in understanding the definition of an employee and of even the period during which one is employed. As said by CJ Gleeson, “Lord Wilberforce made the point that to describe a person as the agent of another, in this context, is to express a conclusion that vicarious liability exists, rather than to state a reason for such a conclusion. Nevertheless, some judges refer to agency as a criterion of liability, similar to employment. If that is to be done, it is necessary to be more particular as to what is meant.”
This is clearly observable when ascertaining the difference between a contractor and an employee. While it is generally viewed that independent contractors that are assigned employment carry out the required duties under the principle that they are in business for themselves and as such employers are not held vicariously liable, this has been proven not to be an absolute principle and there are instances in which the employer is deemed responsible for the negligent acts by independent contactors. In Sweeney V Boylan Nominees the High Court rejected the vicarious claim made against the respondent for an injury against the appellant, who had entered a service station owned by Boylan Nominees and opened a refrigerator door that was not correctly serviced by an independent contractor that resulted in injury. Initially, this area of tort law held an employer to be liable for the tortuous acts of an employee but not a contractor as cited in Quarman v Burnett (1840) however as continuous employment conditions and changes within the Australian labour market occur, the concept of contractors and vicarious liability challenges the meaning of what it is to be considered as an employee. Changes to interpreting the relationship between employer and contractor utilising the control test method – namely the attempt to ascertain the degree of control an employer has over a contractor – has also developed in preference for an analysis of the totality of the relationship.
This test of ascertaining the status of an employee in contrasted in the case of Hollis v Vabu that applies indicators which overall ascertain the actual relationship rather than focusing solely on the obligations as required by the contract itself. The plaintiff, a cyclist who was injured in a collision with a contractor that had the defendants’ name of Vabu visible during the accident brought to light the problem regarding the view that employers of independent contractors are not vicariously liable. The high court case thus attempted to clarify the issues respective of what a relationship entails with respect to employers and vicarious liability. As said, “[t]he system which was operated thereunder and the work practices imposed by Vabu go to establishing ‘the totality of the relationship’ between the parties; it is this which is to be considered.” Similarly, in Deatons Pty Ltd v Flew, during an altercation at a hotel, the plaintiff was struck in the face with a glass of beer that the barmaid threw following his abuse toward her during an intoxicated scene. As stated, “[a]n employer is liable for the act of his servant only if the act is shown to come within the scope of the servant’s authority either as being an act which he was employed actually to perform or as being an act which was incidental to this employment.” The case of Colonial Mutual Life Assurance Society LTD v Producers and Citizens Co-Operative Assurance Co of Australia was mentioned by Justice Kirby in light of the fact that the employer was vicariously liable for the negligence of the independent contractor since the latter was a representative or agent of the employer since he was wearing the uniform. Whilst the absence of a clear distinction that defines the differences between an employee and an independent contractor clearly arouses complications, Justice Bromberg in On Call Interpreters and Translators Agency Pty Ltd v the Commissioner of Taxation discussed the ‘totality approach’ that examines the question, stating;
“Viewed as a “practical matter”:
(i) is the person performing the work an entrepreneur who owns and operates a business; and,
(ii) in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?
If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.”
The ‘entrepreneur test’ viewed in a practical manner purports that an independent contractor as a representative can be considered an employee. As mentioned by Justice Kirby in Northern Sandblasting Pty Ltd v Harris, several areas still remain unclear and further analysis on focal points such as non-delegable duty, the retreat from the control test and the increasing use of independent contractors due to changing social conditions requires more coherency. Nevertheless, an independent contractor is advancing the interests of the employer and therefore can be considered representative of the employee and liable accordingly. Thus, attempting to ascertain whether an employer is vicariously liable for the negligent behaviour of independent contractors requires the analysis of the totality of indicators as part of a weighting process, considering whether there are clear benefits for the employer, whether the independent contractor is a representative of the entrepreneur, the terms of the contract ect. &c., until a formulation of the relationship can be ascertained. As was clarified in Sweeney V Boylan Nominees, “Mr. Comninos was not required to accept jobs from Boylan, did not wear a Boylan uniform, was not based on a Boylan premises and invoiced Boylan for the hours of work he performed.”
Liability does not necessarily require geographical or time-related specificity, for instance at the location of the employment or during working hours. In South Pacific Resort Hotels Pty Ltd v Trainor, Ms. Trainor was employed at a hotel in Norfolk Island and consequently had a part of the building arranged for the optional living quarters of employees. She had experienced sexual harassment from a fellow employee at the premises whilst both were off-duty and the court nonetheless found the employer vicariously liable since the premises itself was built for the purpose of their employment and the conditions and environment of the building therein allowed for the conduct to occur. “It [vicarious liability] is not premised on any culpable act or omission on the part of the employer; an employer who is not at personal fault is made legally answerable for the fault of his employee. It is best understood as a loss-distribution device.” Exploring the concept of vicarious liability under both Federal and Victorian anti-discrimination legislation, employers can be responsible for the acts made by employees including management, agencies, contract workers among others as long as it is in connection with a person’ employment and does not necessarily require being on or within a specific locale or premises of the employer or within working hours. In Leslie v Graham, Ms. Leslie was subjected to sexual harassment by Mr. [Lincoln] Graham at an apartment outside of working hours and following the situation she was unfairly dismissed by her employer Roger Graham and Associates – with Roger Graham being the father of Mr. Lincoln Graham. The line that separates an employer from the conduct and behaviour of employees or contractors clearly becomes obscured vis-à-vis sexual harassment cases. “Vicarious liability can more readily arise for trespassory torts such as sexual assault, based on a close connection between the employment and the tortious act in question.” Confusion is further amplified when attempting to ascertain the vicarious liability of employers outside of working hours. In the Sex Discrimination Act 1999 (Cth) whereby vicarious liability does not apply when it is established that an employee or agent of a person, “took all reasonable steps to prevent the employee or agent from doing acts of the kind referred to in that paragraph”.
The employers’ responsibility vis-à-vis vicarious liability is not solely a matter of where failure itself had occurred, but rather whether the employer had taken reasonable steps to ensure that attempts were made to practicably prevent breaches from occurring. In R v Commercial Industrial Construction Group Pty Ltd CICG had breached health and safety regulations by failing to provide a working environment for its employees that was safe following Peter Bacon – site manager – who had asked labourers to perform unsafe duties that resulted in an accident. As part of the plea mitigation, CICG stated that they had taken all the necessary steps to ensure that a safe working environment had been enforced, thus it was Peter Bacon as a supervisor who failed to comply Job Safety Analysis (JSA) requirements. This was rejected in court, whereby, “[w]hen the employee in question is the person with supervisory responsibilities, including responsibility for ensuring safety at the site, the gravity of the company’s breach is increased, not reduced. It is difficult to understand how the company could have allowed someone with Bacon’s apparent indifference to risk to occupy such as position.” It was concluded that it had not been the case for CICG by employing a site supervisor who failed to adhere to health and safety obligations and consequently behaved negligently. Similaraly, in Gama v Qantas Airways Ltd, Mr. Gama was employed as a licensed aircraft mechanical engineer and who was subjected to racial slurs by co-workers in the presence of supervisors, the latter failing to take reasonable steps to stop the racist behaviour. On the contrary, Mr. Gama was further subjected to discrimination particularly related to his reporting requirements and any opportunity for promotion due to alleged systemic racial intolerance in addition to injuries he sustained during the course of his employment that resulted in less favourable treatment. As a consequence, Qantas was found to be in breach of the Racial Discrimination Act 1975 (Cth) and the Disability Discrimination Act 1992 (Cth), namely that it is “unlawful for an employer or a person acting or purporting to act on behalf of an employer to discriminate against an employee on the ground of the employee’s disability, [d] by subjecting the employee to any other detriment,” and as such vicariously liable particularly for the treatment he received by co-workers in the presence of supervisors.
Vicarious liability is not necessarily about whether an employer authorises tortious acts but rather about whether they are responsible for acts of negligence made by an agent they have employed and as such it is a requirement to ensure that legislation remains broad. Perhaps it is ambiguous to ensure that judges approach the subject on a case-by-case basis by examining the details regarding the nature of the employment. “Vicarious liability is the creation of many judges who have had different ideas of its justification or social policy, or no idea at all. Some judges may have extended the rule more widely, or confined it more narrowly than its true rationale would allow; yet the rationale, if we can discover it, will remain valid so far as it extends.” It is nevertheless commonsensical to assume that should an employee engage in conduct that is deemed offensive outside of the contractual obligations as required by the employer – or “engage on a frolic of his (or her) own” – then the employer cannot be held vicariously liable for such conduct. But should an employer see and fail to do anything about acts of negligence or harassment, then they are absolutely liable.
Comparatively, the legislative and common law processes that we have in place in Australia is certainly commendable when viewing the injustice of the legal systems in other nation-states around the world. It does not, however, change the fact that many employees unfortunately experience discriminate behaviour for personal attributes and ultimately such employers go unpunished.
Scott v Davis (2000) 204 CLR 333
Launchbury v Morgans  UKHL 5;  AC 127 at 135.
Stevens v Brodribb Sawmilling Co Pty Ltd  HCA 1; (1986) 160 CLR 16 at 29.