The High Court finds employer liable for employee’s intentional criminal acts

Margaret Miller

14 December, 2016

Commercial Law & Business TransactionsDispute Resolution, Insolvency and LitigationEmployment Law

On 5 October 2016 in Prince Alfred College Incorporated v ADC [2016] HCA 37, the High Court confirmed that, in special cases, employers can be vicariously liable for intentional criminal acts of their employees.

Employers can be vicariously liable for the harmful acts of their employees done within the course of their employment, such as when an employee does their job negligently and causes harm to someone. In such a case, the employer may be liable to pay damages.

In this decision, the court considered whether intentional criminal acts were done in the course of employment for which employers can be vicariously liable for damage suffered by the victim.

The case concerned a school’s vicarious liability for sexual abuse carried out by its boarding master where the performance of the job gave the opportunity for the wrongful, intentional act to be committed.

The High Court found that whether a job gives the opportunity for wrongful conduct may be determined by looking at the employee’s role and the nature of their responsibilities. The court considered the special role that the employee was assigned and the employee’s special position in relation to the victim. Factors included authority, power, trust, control and the ability to achieve intimacy with the victim. If the employee took advantage of that special position, then the vicarious liability of their employer will probably arise.

Given the substantial passage of time since the offences occurred, the High Court cautioned that their consideration of the factors was necessarily general and not an absolute rule for establishing an employer’s vicarious liability.

This decision is a warning for operators of aged care facilities, boarding schools and hospitals whose employees provide care for vulnerable people because the court found employers can have liability in the civil jurisdiction for damage arising from their employee’s criminal conduct. Employers should consider whether their employment contracts, position descriptions and performance reviews are sufficiently detailed to accurately describe an employee’s role and the employer’s expectations to avoid a finding of vicarious liability for criminal conduct.