The High Court in CCIG Investments Pty Ltd v Schokman [2023] HCA 21 has confirmed that whether an employer can be held vicariously liable for an employee’s wrongful or negligent act depends on whether that act falls within the course or scope of employment, and has provided clarity around what should be considered in making that determination.

Facts

Mr Schokman worked at Daydream Island Resort and Spa and was required under his employment contract to live on the island. His employer, CCIG, made furnished shared accommodation available to Mr Schokman and his colleague Mr Hewett. At approximately 3.30am on the morning of 7 November 2016, Mr Schokman woke in a distressed condition and unable to breathe as Mr Hewett was standing over and urinating on Mr Schokman who was inhaling the urine and choking. Mr Schokman suffered a cataplectic attack, PTSD and developed an adjustment disorder as a result of the incident (which was accidental / unintentional). Mr Schokman relevantly claimed CCIG was vicariously liable for the negligent act of Mr Hewett because that act was done in the course or scope of Mr Hewett’s employment. Mr Schokman’s claim was dismissed by the Supreme Court but upheld by the Queensland Court of Appeal.

High Court Decision

In unanimously holding that CCIG was not liable for Mr Hewett’s negligent urination, the High Court confirmed that for an employer to be held vicariously liable for an employee’s wrongful act it must occur in the course or scope of employment. What falls the scope of an employee's employment depends on the circumstances of the case. Express authorisation is not required, but something more than the mere opportunity for the conduct to take place is needed. What the employee is actually employed to do, or held out as being employed to do is a central consideration. Courts will also look to any special role the employee had and regard must be had to factors such as authority, power, trust, control and the ability to achieve intimacy with the victim (for example in child sexual abuse cases).

Non-delegable duties and legislative obligations

Two of the judges (Edelman and Steward JJ) specifically addressed the difference between an employer being held vicariously liable for an employee’s wrongful act committed in the course or scope of employment to circumstances where employers owe a duty to ensure that reasonable care is taken in the performance of duties of an employee. Although sometimes called ‘vicarious liability’, their Honours said it is really an issue of non-delegable duty. As such, employers should exercise care where obligations arise from non‑delegable duties and legislative obligations. In fact, their Honours referred to ‘a core instance of non-delegable duty at common law’, which is reflected in occupational health and safety legislation, for employers to provide a safe system of work. As such, employers will still be liable for any negligence on the part of an employee failing to adopt a safe system of work.

Key takeaways for employers

• Provide clear contracts and positions descriptions so that the scope of employment is clear and clearly understood.

• Ensure policies support expectations of when you consider things in or outside the scope of employment.

• Although vicarious liability requires something more than providing the mere opportunity for wrongful acts to occur, where you require remote work or provide accommodation, ensure those arrangements are suitable, safe, and expectations are clear.

• Exercise additional caution where obligations arise from a non-delegable duty of care or legislation. For example, obligations to provide a safe workplace, ensure child safety or the positive duty to eliminate sexual harassment in the workplace.