Difference between employer vicarious liability and personal liability

Question

The Health and Safety in Employment Act in New Zealand is a criminal provisions act. So employers can be both vicariously and personally liable for actions of their employees. When may an employer be found personally liable for an employee's action, and when might they be vicariously liable?

An example of a case where an employer was found to be personally liable is Linework Ltd v Department of Labour [2001] ERNZ 80. In this case a supervisor didn't pay attention for a moment and an employee was electrocuted while working on power lines.

An example of a case where an employer was found vicariously liable is Department of Labour v Tranz Rail Ltd [2001] DCR 929. In that case the rail company employed an independent contractor to mow the grass. He had the chute towards the footpath, and it shot out a rock which hit a passerby. It was found the contractor should have been supervised.

In both cases, the employer was liable. What factor determines whether the employer is personally or vicariously liable?

Answer 1

According to Wikipedia Vicarious Liability is a type of liability under the doctrine of "Respondeat Superior" (an employer is responsible for the actions of employees performed within the course of their employment).

Now, in the first case that you have mentioned, the employee was on duty and was supposed to be under the supervision of the supervisor. Therefore, any mishap that might happen would be considered to be during the course of employment. Thus, attracting Vicarious Liability for the employer.

While in the second case, an independent contractor (or a third-party) was put to work. This contractor is not an employee of the Rail company, but rather someone who is under a contract to fulfill a particular task. This essentially means that the Rail company cannot have complete control over the actions of the contractor, as it is not governed by the rules of the rail company as set out for its employees. But because both the parties were under some contract, the contracting party (that wanted to have a task accomplished) should have supervised in some manner, which translated to the Rail Company's personal liability.

Answer 2

So the answer was actually not based on whether the person was an employee or a contractor, because under the Health and Safety in Employment Act, employee has a very wide definition and includes contractors.

The answer was that in the contractor case, there were no policies, etc. of the company that the contractor didn't follow to ensure the health and safety of others. So the company was vicariously liable for the damage he caused, because they should have had policies in place. The company didn't directly cause damage, but someone in their place of work did, so his act was attributed to them.

In the case with the employee who was electrocuted, both the company had duties and safety practices in place that the supervisor as the company representative didn't enforce. So it was a direct failure of the company itself. The supervisor was personally liable, and the company was directly liable.