A recent High Court of Australia decision in the matter of CCIG Investments Pty Ltd v Schokman  HCA 21 (Schokman) deals with the extent of vicarious liability in the employer/employee relationship.
The decision affirms that employers are not liable for the actions of their employees if those actions are not within the course or scope of their employment. Ultimately, the ‘scope of employment’ will turn on the facts of each individual case.
The High Court determined that a ‘greater connection’ must exist between the employee’s tortious act and their employment, rather than just the opportunity for the incident.
What is considered as the ‘course’ or ‘scope’ of employment, will turn on the facts of each individual case.
To determine whether vicarious liability applies, there must be an examination of the employee’s duties and/or powers, that is, whether their specific role placed them in a position of power, trust, control and the ability to achieve intimacy: Prince Alfred College Inc v ADC  HCA 37.
Background to Schokman’s case
Mr Schokman was an employee of CCIG Investments (“the employer”) on Daydream Island, Queensland. A condition of his employment was that he was required to live in shared accommodation, provided by the employer. At the relevant time, Mr Schokman was sharing accommodation with fellow colleague, Mr Hewett. Mr Schokman was also Mr Hewett’s manager.
On 7 November 2016, while asleep in the shared accommodation, Mr Schokman awoke to find Mr Hewett urinating in his face causing him to inhale and choke in a distressed state. Consequently, Mr Schokman developed Post-Traumatic Stress Disorder, which resulted in an Adjustment Disorder.
Mr Schokman brought legal action against the employer accusing it of breaching its duty of care or that it was vicariously liable for the negligent acts of the co-worker.
At first instance, the trial judge held that Mr Hewett’s actions were not committed in the course of his employment. Although it was accepted that the employee-shared accommodation provided the occasion for Mr Hewett’s actions, the trial judge also concluded that the employer was not on notice of any untoward behaviour on the part of Mr Hewett.
The Queensland Court of Appeal allowed Mr Schokman’s appeal. The ‘requisite connection’ existed between Mr Hewett’s employment and his actions because of the requirement to reside in shared accommodation, as imposed by their employment contracts.
High Court Judgment
The High Court found that the employer was not liable for the actions of Mr Hewett, as the untoward behaviour were not considered to be ‘closely connected’ with any of his duties or powers of employment. The Court observed that Mr Hewett did not have a “special role” over Mr Schokman. It was held that the employer’s power to monitor its employees did not extend to surveilling them during their leisure time or in personal living quarters.
In terms of the shared accommodation requirement, the High Court accepted that, at best, the condition provided only the opportunity, by virtue of physical proximity only, for Mr Hewett’s actions.
The decision provides further guidance to employers as to when they may be held vicariously liable for the wrongful actions of their employees. The mere opportunity for the conduct is not sufficient for a finding of vicarious liability. The Court reiterated that, for the employer to be liable, the employment must place the employee vis-à-vis the person injured, in a position of power, trust and control.
Blog written by Hicksons’ Partner, Emma Ellis and Solicitor, Laurette Rizk.