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BUSINESSES PAY FOR THE SINS OF THEIR EMPLOYEES
There is nothing new about the fact that employers can be sued for damages suffered by others due to the fault of their employees. It is referred to as the rule of vicarious liability and is imposed on innocent employers by law. Recent court cases indicate that such liability extends further than previously thought.
For an employer to be held vicariously liable for the wrongdoings of the employee, the employee must have acted “in the course and scope of his or her employment”. Yet, what exactly does this mean? For a long time employers sought some comfort in the belief that they could not be held liable if an employee had acted beyond the employee’s authority and solely for the employee’s own interests or purposes. Surely, so it would seem, the employee would then be acting outside the course and scope of his or her employment.
Several recent cases on this topic are cause for concern for employers. In the matter of Commissioner for the SARS & another v TFN Diamond Cutting Works, a customs official stole diamonds that were kept for safekeeping. The Supreme Court of Appeal found that an employer could be held liable not only for the negligence of an employee, but also for an intentional act by the employee. In this case the employer could not escape liability for the theft committed by the employee.
In the much publicized case of Media 24 Limited & another v Grobler the Supreme Court of Appeal found that the company was liable for the deliberate acts of a trainee manager who had sexually harassed a secretary working for the same company. The court came to this conclusion despite the fact that the employee was clearly serving his own purposes, that the company had a sexual harassment policy in place, that the aggrieved employee had failed to follow the available internal procedures and that the offending employee was fired. The court found that the company had failed to properly exercise its duty of care towards the harassed employee and that it had been negligent by not coming to her assistance at an earlier stage.
Another high profile case found its way to the Constitutional Court. In the matter of N K v Minister of Safety & Security three policemen on duty raped a woman who had been abandoned by her escort on the streets of Johannesburg. She sued the Minister of Safety and Security for damages. She had already been unsuccessful in the High Court and Supreme Court of Appeal where it was found that the policemen had not acted in the course and scope of their duties.
The Constitutional Court, however, found that the State should be held liable. The essence of the Court’s decision was that the very nature of the policemen’s function was to protect the public. Although the policemen were clearly serving their own purposes, they also failed to discharge their duties as policemen. Due to constitutional considerations, the link between their conduct and their employment was sufficient for the Sate to be held liable.
The question as to whether an employer could be held liable depends by and large on public policy, also referred to as “the legal convictions of the community”. This is in turn dependent on several considerations, including the nature of the employer’s business, the creation of risk and the position of the employee. However, it would seem that in recent times these legal convictions have added to the burden of employers. So what should employers do? Workplace policies are clearly not enough. It would seem that there is much education to be done in the workplace to minimise the risk to the employer. In the meantime, the insurance industry is likely to benefit.
Written by Jan Truter for www.labourwise.co.za
Labourwise is an on-line labour relations service aimed at assisting SMMEs with the implementation of effective labour relations. They can be contacted via www.labourwise.co.za or info@labourwise.co.za