Vicarious Liability in the Workplace

It is important for an employer to know that in certain circumstances, they may be held liable for the actions of their employees. This is known as vicarious liability.

What can you be liable for?

Vicarious liability can arise where discrimination or harassment has occurred in the course of, or in connection with, the employee’s employment.

In certain cases, where all reasonable steps are not taken to prevent an employee’s actions, then the liability for those actions will lie with both the employee and employer. Examples of actions which employers can be vicariously liable for include:

  • discrimination, harassment and bullying committed by employees or independent contractors, either in the workplace or on a social media platform; and
  • performance management and dismissal decisions made by human resource management employees.

Prevention

To avoid being held responsible for an employee’s actions, employers must adopt precautionary measures to minimise the risk of any discrimination or harassment occurring. It is good practice to develop a written policy that prohibits discrimination and harassment in the workplace. Practically implementing such a policy is essential.  Ways to do so include:

  • communicating the policies effectively;
  • regularly distributing and promoting the policy;
  • ensuring that the policy is reinforced by management;
  • ensuring that new staff receive the policy as part of their induction;
  • periodically reviewing the policy;
  • educating employees in the areas of diversity, discrimination, harassment and social media;
  • providing clear guidance on workplace behaviour rules outside the workplace or working hours; and
  • resolving any complaints promptly, fairly and effectively.

When making a decision on what would be a reasonable preventative action, employers should consider:

  • the size of their workplace;
  • available resources;
  • possible gender imbalances; and
  • the level of supervision.

To ensure that you as an employer are not held responsible for the actions taken by an employee, it is vital that employers implement preventative measures and deal with any discrimination or harassment issues which arise.

If you would like further advice on preventing vicarious liability in the workplace, contact us on 02 6162 1613.

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