A host employer was found to be vicariously liable for a worker’s negligence, despite not being the worker’s legal employer.
- A host employer and a labour hire employer were found to be vicariously liable for the negligent actions of a labour hire employee which had resulted in another labour hire worker sustaining personal injury. Both appealed the attribution of liability ascribed at trial. Primarily in issue was whether a host employer can be held vicariously liable for the negligent actions of an employee despite not being the legal employer of the negligent employee.
A labour hire worker, working as part of a nightshift crew at a coal mine, suffered injuries after another worker (Kemp) suddenly dropped a bulldozer blade, causing the track on which the labour hire worker was standing to flick up, crushing his leg. The supervisor of the crew was employed by the proprietor and occupier of the mine (the host employer), whilst all other workers (including Kemp) were tradesmen employed by a labour hire company.
The injured worker claimed damages against both the host employer and the labour hire company. The host employer argued at trial that the labour hire company, as Kemp’s employer, was vicariously liable for his negligence, and had breached its duty of care owed to the injured worker. The labour hire company argued that the host employer was vicariously liable, given the employment of Kemp had been transferred to it pro hac vice (for this occasion only) on account of various factors including the duration over which the worker had been at the mine and the authority the host employer held over the way the worker performed his work.
The decision at trial
At trial, Campbell J ultimately determined that the host employer was vicariously liable for Kemp’s negligence on a pro hac vice basis. In reaching that decision, Campbell J considered the determination was a question of fact rather than dependent upon any contractual arrangements and relied on evidence as to factual findings that Kemp was a long-time worker at the mine, he was subject to supervision by the host employer’s senior employees, and relevant risk assessments and systems of work implemented at the mine were those of the host employer.
The Court accepted that the host employer had breached its duty of care to the injured worker on the basis of a deficient job safety analysis (JSA) which Kemp and the injured worker had signed and were subject to. His Honor then held that the labour hire company was liable on an identical basis with respect to the deficient JSA given that, as an employer of, inter alia, diesel mechanics within the mining industry, it would be aware of the matters relevant to foreseeability, significance of risk and available precautions that were set out by Campbell J when dealing with the liability of the host employer.
Accordingly, Campbell J apportioned liability 60% for the worker’s negligence, for which the host employer was liable, with the remaining 40% to be shared equally by the host employer and the labour hire company.
The issues on appeal
Both the host employer and the labour hire company appealed the findings as to liability. On appeal, the primary issues were whether the trial judge was correct to find that:
- The host employer was vicariously liable for the negligence of the labour hire employee; and
- The labour hire employer, as the injured worker’s legal employer, had breached its duty of care to him.
The decision on appeal
The Court of Appeal dismissed the host employer’s appeal and determined that the trial judge was correct in finding that an entity need not be the legal employer of the worker to be held vicariously liable for the negligent act of a worker undertaken within the scope of their employment. It was determined that when a worker is undertaking work on the premises of, and under direction from, another party, the transfer of control may lead to a shift of liability from the legal employer to the host employer. While such a transfer is considered to only arise under exceptional circumstances, it was observed modern labour hire arrangements may more readily lead to such a finding. In this case, the fact that the host employer had authority to give directions and orders to labour hire workers, and its requirements that labour hire workers adhere to its safety policies, led to the finding that the host employer was the employer pro hac vice.
The host employer was successful on cross-appeal by majority decision. Brereton JA, by way of leading judgment, determined:
- The JSA need not have stipulated any further instructions;
- It was not proven that the accident would have taken place had the JSA been more prescriptive;
- Had the JSA been proven to be deficient, it was found to be the host employer’s document, prepared for a procedure required to be performed by the host employer on the host employer’s site and equipment and under the host employer’s ultimate direction and control.
Accordingly, the liability judgment against the labour hire company was set aside. The Court of Appeal held that the host employer was vicariously liable for the Kemp’s negligence, while the legal employer, the labour hire company, did not breach its duty of care to the injured worker.
Implications for you
This judgment is of particular interest given it considers the ‘exceptional circumstances’ for which the transfer of the service and control of an employee from the actual employer to another entity can occur.