Don’t be held liable for the unauthorised acts of your employees

Picture the scene…

A potential diner visits your restaurant and asks for a drink that you do not sell.

Your server replies using obscenities that you do not stock it. The diner complains about being sworn at. The server angrily directs him off the premises using racist and expletive language. The diner is shocked and returns to his car. Your server follows him, opening his passenger car door to yell at him further. The diner gets out of his car to close the door and your server punches and kicks him to the ground.

The next day your restaurant receives a claim for personal injury from the diner. The question that undoubtedly springs to your mind is “surely as the server’s employer, I can’t be responsible for this?” Well, actually you might be.

The facts above echo a recent case involving a petrol station owned by Morrison Supermarkets. There, a petrol kiosk worker attacked a potential customer in very similar circumstances. After a long legal battle, the case progressed all the way to the Supreme Court and Morrisons were held liable.

How can it be right that the employer is held liable for such acts?

Because the individual was responsible for serving customers and ensuring that the premises ran in good order, the Supreme Court felt that those duties were sufficiently close to the acts that subsequently transpired. The petrol kiosk worker was, in his own way, carrying out his duties even though the manner in which they were being carried out was not approved by his employer.

Whilst there is some legal theory behind the rationale that the individual’s employer should be liable (a concept known as “vicarious liability”), it is also driven by public policy considerations as it is presumably felt that an injured person should have recourse against the employer, who is likely to have deeper pockets than the individual who actually carried out the attack.

What can I do to minimise the risk of my business being liable for such acts?

There are a number of practical steps that you could take as an employer:

Educate your employees about what standards of behaviour are expected of them and reinforce this message with regular training and a well-publicised policy on acceptable behaviour at work. To limit your exposure in discrimination claims, an equal opportunities and anti-bullying and harassment policy is also essential. All this should help employees understand the expectations upon them and hopefully they will then act properly.

Coach your managers and supervisors to recognise inappropriate behaviour and ensure that they intervene at an early stage to stop situations from escalating. Whilst this might end up being a damage-limitation exercise, it should at least minimise any harm caused.

Consider whether to pursue your own claim against the employee, probably for breach of their contractual terms of employment. However, commercially speaking, you will want to balance this with the time and cost of such legal action and also the likelihood of whether your employee has funds to pay you any compensation that is awarded if you are successful in your claim.

Check whether you have a clause in your contracts of employment allowing you to make a deduction from the employee’s wages for losses incurred as a result of their negligence and/or breach of your company rules. If you do not already have such a right, you might want to introduce one.

As a deterrent to others, you will also want to send a strong message that such behaviour will not be tolerated. In the above scenario, the actions are very likely to be gross misconduct, meaning you can dismiss without notice. However, do remember to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.  If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.