Can employers be vicariously liable for their employees’ crimes? The answer might surprise you…

A recent High Court decision confirms that, in special cases, employers can be vicariously liable for the intentional criminal acts of their employees.

This decision is particularly important for employers whose employees provide intimate care for vulnerable people, including operators of aged care facilities, boarding schools and hospitals.  It shows that these sorts of employers can have liability in the civil jurisdiction for the damage incurred because of their employee’s criminal conduct.

Background

It has long been established that employers can be vicariously liable for the harmful acts of their employees that are done within the course of their employment. In many instances an employer’s liability to pay damages is clear, such as when an employee does their job negligently and causes harm to another.

However, what about intentional, criminal acts by employees? Are these acts done within the course of employment for which employers can be vicariously liable for the damage that the victim suffers? According to the High Court’s recent decision, in certain circumstances, they are.

The case, which concerned a school’s vicarious liability for sexual abuse carried out by its boarding master, confirmed that employers can be liable for the criminal acts of their employees where the performance of the job gave the occasion for the wrongful, intentional act to be committed.

The High Court found that:

• Whether a job gives the occasion for wrongful conduct may be determined by looking at the employee’s role and the nature of their responsibilities.
• This includes considering any special role that the employee was assigned, and the special position in which they are thereby placed with respect to the victim. Relevant considerations include authority, power, trust, control and the ability to achieve intimacy with the victim.
• If the employee took advantage of that special position, then it is likely that the vicarious liability of their employer will be established.

Outcome

The High Court cautioned that the above approach is general and does not prescribe an absolute rule for establishing an employer’s vicarious liability. However, the case is a clear warning sign for employers, particularly those that operate in institutional environments with highly dependent and vulnerable people under their care. Operators of aged care providers, schools, hospitals and prisons are all such businesses that may be affected by this decision.

Prince Alfred College Incorporated v ADC [2016] HCA 37