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How to avoid vicarious liability

Wednesday, 8th October 2014, by Loran McDougall

In today's Workplace Bulletin:
  • How you can avoid being found liable for your employees’ misconduct
Dear Reader,

As an employer, you can be held responsible if an employee or contractor engages in unlawful discrimination, harassment or bullying. This is called vicarious liability.
You will be vicariously liable if the offender is your employee or contractor and:
  • the victim is:
    • your employee;
    • your contractor;
    • your contractor’s employee; or
    • a visitor to your workplace; and
  • you cannot demonstrate that you took reasonable precautions to prevent the behaviour from occurring.
You will not be liable if the offender is:
  • a visitor; or
  • your contractor’s employee, unless the offender is acting as your agent.
Vicarious liability can arise even if the conduct occurred out of hours and not in the course of the employee’s or contractor’s work, as long as there is enough of a connection to your workplace or business, e.g. an employee uses social media to badmouth your business or to bully a co-worker.
Fortunately, there are steps you can take to avoid being vicariously liable. Charles Power explains below.
Until next time,
Jessica Oldfield
Loran McDougall
Workplace Bulletin
When a safety regulator visits your workplace, this is one of the first things they’ll be looking for...

How you can avoid being found liable for 

your employees’ misconduct
by Charles Power
Editor-in-Chief, Employment Law Practical Handbook
To avoid being vicariously liable for your employees’ or contractors’ misconduct, you must have:
  • taken reasonable steps to prevent the conduct (what is reasonable will depend on the size and the nature of your business, but it is important that you recognise an employee’s unlawful action and take steps to stop it); and
  • demonstrated a commitment to having a workplace free from discrimination and harassment.
Implementing policies and procedures to avoid vicarious liability
The bare minimum is a written policy with processes to show the implementation of that policy. Your policy should include:
  • a plain-English description of what constitutes unlawful discrimination, harassment and bullying; and
  • the consequences of breaching the policy and the procedure for making complaints and reports.
Ensure that complaints and reports are acted upon and resolved promptly, fairly and effectively, and that the policy is applied consistently through appropriate disciplinary action.
To ensure all your employees have a complete understanding of the policy and processes, you should:
  • train senior employees in the policy and processes;
  • induct new employees into the policy and processes;
  • conduct regular information sessions for the rest of your employees; and
  • ensure that the policy is easily accessible by all employees.
You should also ensure that your policies and processes are kept up-to-date with legislation, and conduct updated training when necessary.

How can you avoid vicarious liability for out of hours conduct?
To avoid being vicariously liable for your employees’ out of hours conduct, in addition to the above, you should make it clear to your employees exactly when workplace behaviour rules will apply outside the usual workplace or working hours.
To avoid liability associated with employees’ social media conduct, you should also have a comprehensive and up-to-date social media policy.Regards,
Charles Power
Charles Power

Employment Law Practical Handbook

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