Having been decided on this, the next thing which needs to be decided is whether the individual who committed the tort is an employee or not. There have been few tests used over the past to determine whether someone is an employee or not. The First of those is the control test which was used in Yewens v Noakes (1880) case. When giving his judgment Lord Justice Bramwell said, a servant is a person who is subject to the command of his master as to the manner in which he shall do his work. So it is clear that, the employer will have control over his employees and also as to how they should do their work too. Due to some of the limitations of the control test a new test, Integration test, to be specific, was used in the case of Stevenson, Jordan & Harrison Ltd v MacDonald and Evans (1952). According this test if the individuals who committed the tort were found to be working as an integral part of the business, then the employer might be held vicariously liable even if they are contractors for the business.
The most recent test used to determine whether an individual is an employee or not, is the economic reality test. This test was used in the case of Mersey Docks and Harbour Board v Coggins and Griffith Ltd (1947), Ready Mixed Concrete v Minister of Pensions (1968) and few more other cases. This test looks in to a much wider area than the previous tests. It looks in to aspects like control, ownership of the tools used in the work, chance of profits, and risks of loss as well. So this test considers a wider aspect before deciding on this matter.
It should also be noted that usually the employers will not be held liable for the tort of any independent contractors, but there are some exceptions to this general rule. For example if the employer has authorized to commit a tort as in the case of Ellis v Sheffield Gas Consumers Co (1853) where A gas company, not authorized to interfere with the streets of Sheffield,directed their contractor to open trenches therein. The contractors servant, in doing so, left a heap of stones, over which the plaintiff fell and was injured. It was held that the defendant company was liable, as the interference with the streets was in itself a wrongful act.
Having being decided on the first two conditions (ie. Tort, Employee), the next and most complex of all to decide is whether the employee committed the tort during the course of employment. Due to the lack of consistence of the judgments by the courts on this matter it is regarded as the most problematic area. It is clear that the employer can be held liable if a wrongful act was done by the employee with the authorization of the employer. But the problem arises when the action committed was not authorized or when it is expressly prohibited by the employer.
If the employer authorizes employees to do a particular task but the employees do the task they were asked to complete in an unauthorized way leading to a tort, it does not prevent employers from been held vicariously liable for the tort committed by employees. For example in the case of Century Insurance v Northern Ireland Transported Board (1942), despite the high degree of negligence by the petrol tank driver, it was decided he was acting in the course of his employment. Similarly, employees maybe held to be acting within the course of employment even when deliberately acting in a way that was expressly prohibited by his employer. In Rose v Plenty (1976) case, when the 13 year old was injured while riding with a milkman on his float to help him deliver milk, despite this was contrary to the employers express prohibition, it was held to be within the course of employment because it was an improper way of doing exactly what the milkman was supposed to do.
On the other hand in Twine v Beans Express (1946) a driver giving a lift in his delivery van to someone, contrary to instruction was held to be outside the course of employment, since the passenger was a trespasser and in no way of contributing to the purpose of the employment. Briefly discussed above are some of the circumstances where an employer can be held liable for the torts committed by his/her employees and sometimes for the torts of the contractors.
But at this point someone might ask why someone else should be held liable for the wrongful act committed by a different person. Rest of this essay will focus on answering to this question. Some of the authors including Michael A.Jones(2000) has proposed some answers to this question. According to his book Textbook on Torts A. Jones said that, the employers have a deeper pocket when compared with that of his employees. So the employers will stand in a better position to pay a compensation for the plaintiff than his employees.
Another reason he highlighted in his book is that, if the employees do their work properly its the employer who benefits and makes money out of it. Therefore the employers should also bear any loss caused by his employees too.
Similarly some authors argue that, by making the employers vicariously liable for the tor of his/her employees it will give them a financial incentive to encourage their employees to take more care of the safety at work. It is because if the employees commit a tort it will be the employer who will have to bear the financial burden. So in placing this obligation up on the employer, they will be more motivated to instruct and remind employees to take more care and to take safety precautions at while at work.
However, it should also be noted that, the Civil Liability(contribution) Act 1978 gives the right for the employers to recover the amount they spend on compensation the plaintiff, from his/her employees. In the case of Lister v Romford Ice and Cold Storage Co (1957), when dad was injured because of the van driven by his own son, father sued the company for the compensation. But later on the company sued against the son and he was asked to pay the same amount which the company was asked to pay to his dad. In conclusion vicarious liability involves the employer being liable to a third party for the torts of his employee.
There are 3 conditions which must be satisfied in vicarious liability: a relationship of employment between the tortfeasor and the defendant, the commission of a tort, and that it occur in the course of employment. Vicarious liability is not dependent on any fault of the employer and maybe imposed even in the case of an express prohibition or a criminal act. Vicarious liability does not remove the employees personal liability and it is possible, but unusual, for the employee to be called upon to indemnify his employer.