“An employer is not liable for the tort of his independent contractor, discuss the exception in detail to this general rule, citing relevant case laws.”

Introduction:

 A person who contracts to do work for another person according to his or her own processes and methods; the contractor is not subject to another’s control except for what is specified in a mutually binding agreement for a specific job.[1]

An independent contractor contracts with an employer to accomplish a specific piece of work. This working relationship is a bendable one that offers advantages to each of the worker and the employer. However, there are drawbacks to the relationship as well. The choice to hire or perform as an independent contractor should be weighed carefully. Properly distinguishing between employees and independent contractors has vital consequences, and the failure to keep the variance can be costly. From an employer’s viewpoint, appointing employees involves both benefits and troubles. A fundamental benefit is that you can control employees, making them do what you want to further your business objectives[2]. But you must pay their wages, withhold taxes, give them employee benefits, be liable for any acts of neglectfulness during their employment, and deal with the scrutiny of state and federal law when it comes to nondiscrimination, discipline, and termination.

Independent contractors, on the other hand, are classically one-time workers who do a job for a predetermined price, and who generally work for multiple companies. Axiomatically, with independent contractors, you cannot control them with detailed guidance, and they bring no tort, contract, or tax liabilities to the employer’s doorstep. That may make the dichotomy between employee and contractor look obvious and one that could cause no conflict.
However nothing could be further from the truth. In fact, there are several subtle (and not so subtle) blendings of attributes that make the spectrum of workers far more homogeneous than you might imagine[3]. Moreover, it is often not easy to say into which category a specific worker or class of workers should go. In part, this is due the obvious incentives companies have to deal with independent contractors rather of than employees. That has brought to an epidemic of debatably bogus independent contractors who do not necessarily function the way they are supposed to function. That, in turn, produces controversy about what is and is not possible with independent contractors. To some degree, this has undermined the circumstances in which companies lawfully and legally use independent contractors rather than employees. In any case, the controversies rage.

 Tort Liability:

A tort is a civil wrong (as opposed to a criminal wrong: a crime). Common torts are negligence, battery, trespass, etc. These are instances where someone has wronged someone else, and the law must determine where the fault lies[4].

Thus a tortfeasor is the person (or entity) that commits the tort: the losing defendant in a tort suit.

Three questions must be asked in order to establish liability:

(1) Was a tort committed? (2) Was the tortfeasor an employee? (3) Was the employee acting in the course of employment when the tort was committed?

Now, a tort liability appears because of a mix of directly violating a person’s legal rights and the transgression of a public obligation causing damage or a private wrongdoing. Facts must be assessed in a court hearing to identify who the tortfeasor/liable party is in the case.
If someone went up into the traffic signal heads and mis-wired the signal head to show green signals when they are programmed to show red, that would not be a tort, that would be a criminal act[5]. A tort is a non-criminal action (or omission) which caused damages to be suffered by someone. Negligent maintenance of a traffic signal is a tort. This is what the lawyers are looking for.
There are 5 conditions that have to be met[6]. The following details are in reference to any organization charged with negligence in the responsibility of performing and maintaining traffic signals.
1. Duty: The duty to deliver a safe and sound traffic control system for the public has already been founded.

2. Breach of Duty: Negligence is the Breach of Duty that will almost always be pitched by the lawyer. Negligence is the failure to use “sensible” care in one’s actions. A healthy file of PM records that show a pattern of frequent maintenance can disprove the Breach of Duty. This is how you win.

3. Damages: The plaintiff has to have incurred property damage, particular injury or both. Injury can include psychological conflict and relevant outcomes.

4. Proximate Cause: The plaintiff’s damage has a cause. The lawyer will attempt to present that the underlying cause is the Breach of Duty, in whole or in part.

5. Lack of Contributory Negligence: The lawyer will try to verify the plaintiff was not (or not very) negligent with regard to the occurrence. Laws on this issue vary from state to state, but contributory negligence works against the plaintiff.[7]

However, Assume the non-negligent agency has been consistently testing their conflict monitors every 12 months, but one monitor happens to fall short and allows a conflict to exist long enough for an accident to take place. The failure of a system that is not due to any kind of neglect or misuse by the agency is not a tort, it is considered to be an accidental event[8].

However, if the failed monitor issue had persisted for a prolonged period without any reply from the agency, then there would be a failure to respond in a reasonable manner to the failure, which is also viewed as a negligence tort.

Introduction to Vicarious Liability:

 Employers happen to be vicariously responsible for the torts of their employees that are committed during the course of employment[9]. Vicarious liability is the imposition of liability on one person for the negligence of another to whom the former has entrusted (or ‘delegated’) the performance of some task on their behalf.

There are numerous circumstances in which a party may be liable vicariously[10].

 Contractors can be liable if their subcontractors fall short to complete a job, accomplish the job incorrectly, or have violated their contract in other ways;

 Parents are liable when the activities of their children cause injury or damage;

Most commonly affiliated with vicarious liability are employers. They can certainly be liable for sexual harassment of one employee by another, discriminatory behavior by an employee towards fellow employees or customers, or any additional activity in which one of their employees personally causes harm, even if that employee behaves against the policies of the employer;

 Most recently, vicarious liability claims are being constructed against the manufacturers of mobile phones which lead to road accidents[11]

Reasons for vicarious liability:

 Vicarious liability has two important features. First, it is liability for the negligence (or other wrong) of another. Secondly, it is strict liability – that is, liability without evidence of wrong doing. An person can be vicariously liable for the negligence of another no matter how precisely careful the person was in all relevant concerns, such as selecting and supervising the other.
An employer is vicariously liable for negligent functions or omissions by his employee in ‘the course of employment’[12]. It does not matter whether the employer provided their permission for the employee to perform, or not to act in the way that caused the damage. Of course the vicarious liability of the employer is additional to the ‘primary’ liability of the employee for negligence. Both are liable – ‘jointly and severally’. The common law implies into the contract of employment a term to the effect that the employee will carry out the contract with reasonable care. On the basis of this term, the employer is entitled to recover from the employee a contribution to any damages which the employer is liable to pay to the person injured or killed. If the employer was not negligent at all, it will be entitled to be completely indemnified by the employee. In some Australian jurisdictions, there is legislation that provides (in certain types of case) that only the employer is liable, not the employee. In some jurisdictions there are also statutory provisions that remove the right of the employer (in certain types of case) to recover contribution or an indemnity from the employee. In terms of personal responsibility, the most extensively accepted justification for vicarious liability is that, because the employer gets the gain of the business being conducted, the employer should also be required to carry challenges attendant on the business. However, this justification is hard to reconcile with the employer’s right to contribution or an indemnity. For this reason, many observe vicarious liability simply as a form of liability insurance, intended mainly for the protection of plaintiffs, and not based on principles of personal responsibility.

According to Michael A. Jones, Textbook on Torts, 2000, p379, several reasons have been advanced as a justification for the imposition of vicarious liability:

The master has the ‘deepest pockets’. The wealth of a defendant, or the fact that he has access to resources via insurance, has in some cases had an unconscious influence on the development of legal principles.

 Vicarious liability encourages accident prevention by giving an employer a financial interest in encouraging his employees to take care for the safety of others.

 As the employer makes a profit from the activities of his employees, he should also bear any losses that those activities cause.[13]

Employee or Independent Contractor:

Employers/masters will only be liable for the torts of their employees/servants. They will not usually be liable for the torts of their independent contractors (see below). It is therefore necessary to establish the status of the tortfeasor[14].

The intention of the parties is not necessarily conclusive.

(a) The control test:

This was the traditional test. In Collins v Hertfordshire, Hilbery J said: “The distinction between a contract for services and a contract of service can be summarized in this way: In one case the master can order or require what is to be done, while in the other case he can not only order or require what is to be done, but how it shall be done.”[15]

But in Cassidy v Ministry of Health, Somervell LJ pointed out that this test is not universally correct. There are many contracts of service where the master cannot control the manner in which the work is to be done, as in the case of a captain of a ship. He went on to say: “One perhaps cannot get much beyond this ‘Was the contract a contract of service within the meaning which an ordinary person would give under the words?”

(b) The nature of the employment test:

One accepted view is that people who have a ‘contract of service’ (an employment contract) are employees, but people who have a ‘contract for services’ (a service contract) are independent contractors.[16]

(c) The ‘integral part of the business’ test:

This test was proposed by Lord Denning in Stevenson, Jordan and Harrison Ltd v McDonald and Evans [1952] 1 TLR 101: ‘It is often easy to recognize a contract of service when you see it, but difficult to say wherein the difference lies. A ship’s master, a chauffeur, and a reporter on the staff of a newspaper are all employed under a contract of service; but a ship’s pilot, a taxi-man, and a newspaper contributor are employed under a contract for services. One feature which seems to run through the instances is that, under a contract of service, a man is employed as part of the business; whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it.’[17]

Lord Wright suggested a complex test involving (i) control; (ii) ownership of the tools; (iii) chance of profit; (iv) risk of loss (Montreal v Montreal Locomotive Works [1947] 1 DLR 161). In a later case, Cooke J referred to these factors and said that the fundamental test was: ‘Is the person who has engaged himself to perform these services performing them as a person in business on his own account?’ If the answer is yes, it is a contract for services; if no, it is a contract of service. There is no exhaustive list of considerations relevant to determining this question, and no strict rules about the relative weight the various considerations should carry in a particular case. Factors which could be of importance were: (i) whether the person hires his own helpers; and (ii) what degree of responsibility for investment and management he has.

Vicarious liability “in the course of employment”:

For an employer to be held liable, the wrong must be committed “within the course of employment.” This criteria is a question of fact, and it is immaterial whether the wrong committed by the employee was authorized or not. An employer will only avoid liability in this situation if it can be shown that an employee acted “on a frolic of his own,” or in other words, if the employee acted in a way that was unconnected with his employment. Recently, the courts have been willing to impose liability in far-reaching circumstances on the issue of whether the wrong was committed “in the course of employment.” Important in this context is the case of Lister v. Hesley Hall Ltd. This case establishes that an employer cannot avoid liability by showing that an employee engaged in an intentional and unauthorized wrongdoing. Thus, the important factor in establishing vicarious liability is the connection with the “course of employment.” However, it is important to note that an employer cannot avoid liability if an employee acts in a way that could be described as “incidental” to his employment and the duties to which he is entrusted with. Therefore, in establishing whether vicarious liability exists, the question to be asked is firstly, whether the act complained of was committed “in the course of employment” and secondly, whether the act is reasonably “incidental” to the employee’s employment duties. If there is a connection, it is irrelevant whether the employee’s act was unauthorized[18].

In the wake of Lister, a more recent trend has been to impose liability upon an employer for violent acts committed by employees. In the Court of Appeal case of Mattis v. Pollock (t/a Flamingos Nightclub) a nightclub owner was held vicariously liable for the violent acts of an employed doorman. The Court of Appeal applied the rationale of Lister and held that a “broad” approach was required in assessing whether an individual’s acts were sufficiently connected with the duties of his employment so as to justify imposing vicarious liability.

 Vicarious Liability under a statutory duty: 

An employer can also be held vicariously liable for an employee’s breach of a statutory duty. This duty differs to that of a common law duty in that the duty does not rise by operation of common law principles, but by statute. As such, the statute imposes a duty on the employee personally and makes no reference to the employer. An employer can be held liable for the breach of a statutory duty even where the statutory duty is owed by the employee personally and individually. This circumstance would potentially arise in the context of harassment within the workplace, where one employee has been harassed or bullied by another- see the case of Majrowski v. Guy’s and St Thomas’s NHS Trust. However, emphasis will be placed on the intention of the legislature in creating the statute in deciding whether vicarious liability should be imposed[19].

 Liability for Independent Contractors:

In Alcock v Wraith [1991] 59 BLR 16, Neill LJ stated: “where someone employs an independent contractor to do work on his behalf he is not in the ordinary way responsible for any tort committed by the contractor in the course of the execution of the work .

The main exceptions to the principle fall into the following categories:

(a) Cases where the employer is under some statutory duty which he cannot delegate.

(b) Cases involving the withdrawal of support from neighboring land.

(c) Cases involving the escape of fire.

(d) Cases involving the escape of substances, such as explosives, which have been brought on to the land and which are likely to do damage if they escape; liability will attach under the rule in Rylands v Fletcher (1868) LR 3 HL 330.

(e) Cases involving operations on the highway which may cause danger to persons using the highway.

(f) Cases involving non-delegable duties of an employer for the safety of his employees.

(g) Cases involving extra-hazardous acts.”[20]

 Tort Liability Immunities:

 The legislature has created a number of exceptions to the general rule that local governments are liable for their torts. This recognizes that, unlike private business, government is expected to undertake some activities and deal with some situations that create a fair amount of unavoidable risk but that cannot be avoided Some of the areas in which towns have protection from liability include:

(1) Assessment and collection of taxes;

(2) Accumulation of snow and ice on roads, sidewalks, or public parking lots;

(3) Acts of officers or employees in executing a statute, ordinance, or resolution;

(4) The condition of unimproved municipal owned real property;

(5) Construction, operation, or maintenance of a water access site;

(6) Construction, operation, or maintenance of parks and recreation areas;

(7) Beach or pool equipment and structures on public land after the beach or pool is closed;

(8) Actions for which immunity is provided elsewhere in the statutes;

(9) Actions resulting in losses other than injury to or loss of property or personal injury or death;

(10) Failure of persons to meet standards needed for a license or permit issued by the municipality;

(11) Condition of unimproved municipal owned property;

(12) Claims for which the state is not liable under Minn. Stat. § 3.736;

(13) Use of non-public logging roads;

(14) Use of geographic information system data; and

(15) Use of road rights-of-way by recreational motor vehicles. Minn. Stat. § 466.03[21].

 Conclusion: 

Where vicarious liability is imposed on an employer, both the employee and employee will be held jointly liable. This operates to allow the employer to claim a contribution from the employee under the Civil Liability (Contribution) Act 1978. It must be noted that in the context of an independent contractor, an employer would be held vicariously liable where he authorised or ratified the tort[22].

It is clear that vicarious liability will continue to operate significantly for an employee’s acts committed within the “course of employment.” However the case of Lister has expanded the approach taken by the courts in determining the circumstances for the applicability of vicarious liability, and has broadened the extent of the “in the course of employment” criteria. Although essential, this criteria has expanded to the point of allowing claims for vicarious liability in cases where liability would not have arguably been imposed. The extension of the liability to statutory duty only highlights this point. In turn, the expansion of vicarious liability will have far-reaching implications for employer’s in the future[23].

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