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Vicarious liability at the Xmas party Bellman v Northampton Recruitment25th October 2018 Employment
With the Christmas party season fast approaching, the case of Bellman v Northampton Recruitment Limited provides a timely reminder for employers on vicarious liability for employee’s actions, even outside company time.
In order for an employer to be vicariously liable for the actions of an employee, the action in question must be committed “in the course of employment„. This is a fairly broad test, and a Court will ask whether the action was so closely connected with the employment that it would be fair and just to hold the employer liable.
Mr Major, the managing director of Northampton Recruitment, attended the company Christmas party with around two dozen other employees and their partners. Afterwards, some of the employees, including Mr Major, moved to a hotel, where some were staying overnight, for further drinks. Although this was not strictly a part of the company party, the company did pay for taxis to the hotel and some of the drinks bought there.
After an extensive drinking session, a dispute arose regarding work issues and Mr Major became irate. Major assembled the employees present and began to lecture them on how he owned the company and made the decisions. Mr Bellman, a sales manager for the company, challenged Mr Major’s behaviour, and Major assaulted him. Mr Bellman was knocked to the floor, fracturing his skull and leaving him with severe brain damage. Mr Bellman’s doctors have concluded that he will likely never work again.
Initially, the High Court found that the company was not liable for Mr Major’s actions, as the drinks at the hotel were separate from the company party. However, the Court of Appeal has overturned that decision on appeal. The CoA found that there were two points to determine; what Mr Major’s functions were as an employee, and whether there was sufficient connection between his position and his wrongful conduct.
Regarding the first point, the CoA found that on the facts, Mr Major was the “directing mind and will„ of the company, and essentially had authority for all management decisions. As owner and managing director, his remit was very wide. However, this did not necessarily mean that he was always on duty when he was with other employees, as authority was not the only factor to look at. The CoA directed that a court should look at what an employee is expressly authorised to do, rather than what they might do. Normally, this would act as a limiting factor, but unfortunately for the company this did not limit their liability in this case as Mr Major had very few restrictions placed upon him.
On the second point, the CoA agreed with the High Court that the drinks at the hotel were not a seamless extension of the initial company party, but did state that they had to be seen in the context of the evening’s events. They could not therefore discount entirely the link to a company arranged function, as the High Court had done. The CoA also found that, even if the situation was not a company arranged event, Mr Major had made a deliberate choice to wear his “managing director hat„ when he began to lecture fellow employees. In doing so, he was misusing his authority in the presence of around half the company’s staff. Additionally, the rant had been preceded by a lengthy period of discussion regarding his decisions and company business. Accordingly, Mr Major was acting as managing director of the company at the time he assaulted Mr Bellman.
In the CoA’s judgment, Lord Justice Irwin stressed that this case was unusual and highly fact-specific. Mr Major’s high level of authority and unrestricted role were very unusual and are unlikely to arise in many cases of this kind. As such, this case should not be regarded as carte blanche for employees to hold employers liable for actions outside of work.
The case does however reconfirm the emerging approach to employer liability evidenced by cases such as Mohamud v Morrisons, showing that a broader interpretation of the law on vicarious liability is becoming more and more widespread. As such, employers should take care to make sure that, come the holiday season, their employees don’t end up on the naughty list.
Please do not hesitate to contact myself or the team to discuss this or a related employment law matter by using our contact form or telephone.