(Note that this post is about vicarious liability to pay damages; it is not talking about criminal liability or professional disciplinary matters).
Vicarious liability is the rule that an employer is liable to pay damages to a person injured or who suffers loss due to the negligence of an employee. It is a common myth (and one that has been again repeated to me in the last few days) that an employer can avoid liability – can leave the employee exposed – if they can show that the employee failed to strictly follow the employer’s rules and procedures. That is wrong. It’s a fairy tale used to scare people. It is not the law.
The law says that vicarious liability extends to doing authorised acts in an unauthorised way (New South Wales v Lepore (2003) 212 CLR 511).
Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 22)  NSWSC 1657 is the judgment in the class action against Seqwater and others over the 2011 Brisbane floods. The judgement has been delivered in 15 chapters and will take me quite some time to get through and to provide a detailed report on what it might mean for the EM sector. Even so, the court did issue a summary. The summary says
In conducting flood operations during the January 2011 Flood Event, the flood engineers were effectively obliged to abide by the Dams’ flood mitigation manual (the “Manual”). The Manual required the flood engineers use rainfall forecasts to select flood strategies and to guide releases. It also required the flood engineers to prioritise dam safety and the avoidance of urban flooding over the effects on rural communities of inundating rural bridges. The Court found that the flood engineers failed to comply with the Manual in these and other respects and that this, in turn, meant that by 11 January 2011 they were forced to make large releases of water to ensure Wivenhoe Dam did not fail. The Court found that the impugned actions of the flood engineers during the January 2011 Flood Event were not reasonable mistakes made in the heat of the moment, but systemic failures to apply the Manual that they had drafted.
Even though it was the engineers who failed to follow the manual, the defendants were Queensland Bulk Water Supply Authority trading as Seqwater, SunWater Ltd and the State of Queensland; not the engineers. It is the defendants, and not the engineers that will be liable to pay the damages when they are calculated.
Vicarious liability only applies if the employee is negligent. If, in this case, the engineers had strictly followed the manual they would not have been negligent. If an employer could abandon an employee because they didn’t strictly follow procedures and processes the doctrine would be meaningless.
The justification for vicarious liability is not easy to explain – as the judges of the High Court of Australia noted in Hollis v Vabu (2001) 207 CLR 21 ‘A fully satisfactory rationale for the imposition of vicarious liability in the employment relationship has been slow to appear in the case law’ (, Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ). Some justifications are that the point of liability is to ensure that a person who is injured is compensated. The ‘person’ that can best ensure that happens, either because they have the funds or the insurance policy, will be the business or government, not their employee. Whether the employer is a business or a government delivering government services, they reap the rewards of the person’s labour, they pay the wages granted but the employee is acting in the employer’s interest not their own. As the employer gets the benefit so too, they should take the risk. The employer is also responsible for selecting employees, training them, building the relevant culture that may or may not prioritise safety etc. All things that a person who engages with the business has no control over. So the employer and not the employee is liable even when the employee or employees demonstrated ‘systemic failures to apply the Manual that they had drafted’.
And vicarious liability is a rule of law, not a choice. A defendant like Queensland or Seqwater is not accepting liability on behalf of their employees because they want to, or support their employees (which they might). They are liable because the law says that an employer is liable for the negligence of an employee.
Next time you hear ‘My [Your] employer wear liability but not if they can show that I [you] did not follow every procedure or policy in which case they’ll push me [you] under the bus and I’ll [you’ll] be personally liable’ know that the person saying that is wrong.
That is not how vicariously liability works.
That is an attempt to scare people into compliance.
It is a myth.
Vicarious liability applies when an employee (and I would also say, a volunteer) is negligent. One grounds for being found negligent is failure to properly apply the employer’s policy and procedures. Proof of that failure does not get the employer off the hook, it means they are liable.
And neither the employer, nor their insurer, can turn around and sue the employee for the damages paid out. The common law right of an employer to sue their employee has been abolished see for example the Employees Liability Act 1991 (NSW) s 3 and for national legislation, the Insurance Contracts Act 1984 (Cth) s 66.