After several checks, the food contamination turned out to be caused by an irresponsible restaurant worker who failed to adhere to food safety practises. So who should you sue? The worker or the restaurant?
In tort law, there is a legal concept called vicarious liability, where the employer becomes responsible or liable for the negligence committed by the employee during the course of work.
However, an employer will be liable if the elements are fulfilled. Want to know more about the elements?
There are 2 elements that need to be fulfilled in order for an employer to be vicariously liable for the tort committed by the employee.
The first element is the relationship between the employer and employee. A person is categorized as an employee when the relationship is one based on a contract of service. To make it simple, that person is an employee who enjoys mandatory benefits like EPF and PERKESO contributions.
On the other hand, a person who is working under the ‘Contract for Services’ is a freelancer who does some specific jobs according to the contract for services. This type of individual is called an independent contractor and does not receive any mandatory contribution like EPF and PERKESO.
As a general rule, an employer is not vicariously liable for the tort committed by those who work under contract for services.
In determining whether a person is considered as an employee in the eyes of the law, the Court has conducted a few tests namely, control test, business integration test and multiple test.
Initially, the test that the Court used to determine the nature of the relationship between the employer and employee was the control test.
In the case of Short v J & W Henderson Ltd, Lord Thankerton said that there were 4 factors to be considered in determining the existence of a contract of service:
1. The power of selection by the employer;
2. The power in determining salary or other remuneration;
3. The power or right of the employer to control the method in which the work was done.
4. The power and right of the employer to terminate the employee’s services.
For example, in the case of Z Sdn Bhd v M Sdn Bhd [2004] 7 MLJ 461, the plaintiff was an independent contractor employed to extract timber from Area 1. The Defendant obtained a license to extract timber from Area 2 and it employed Bawan as an independent contractor to extract timber for it.
In the course of its felling and extracting timber from Area 2 had encroached into Area 1 and had cut and felled over 600 pieces of timber logs. Bawan supplied and maintained all labour, tools, equipment, fuels, machinery and materials in discharging his obligations to the Defendant.
By applying this test, the Court held that Bawan was an independent contractor and so the Defendant was not liable for his tortious acts.
A few years after the control test was laid down, what has been described as the business integration test was developed. In determining whether a person is an employee to the employer, the work that the employee does should be an important part of the employer’s business or integral part of that organization. Thus, those who work in a contract for services even though the work is done for the organisation, it is not integrated into it but is only accessory to it.
For example, in MJD v Sykt JST Sdn Bhd [1982] 2 MLJ 71, the plaintiff who worked as a sawyer at the defendants’ sawmill sustained injuries and as a result lost 3 fingers of his right hand. Because of the injuries, he was refused further employment at the defendants’ sawmill.
He then took an action for damages against the defendants and the defendants contended that the plaintiff was not their employee but an employee of his contractor, Lim.
The Court held that since wages and the number of logs to be sawn was determinable by the defendants, the plaintiff’s work was an integral part of the defendant’s business and he was therefore an employee of the defendants.
The control and business integration test have been criticised for its difficulty to be applied and not being able to present a clear answer in many situations.
Therefore, the dissatisfaction with these two tests has led the courts to prefer a third test called multiple or mixed test. This test is said to be based on the common sense approach.
In the case of RMC Ltd v Minister of Pensions [1968]2 QB 497, the Court held that 3 factors need to be fulfilled before a contract of service is established;
1) The worker agrees to perform a service for a company in exchange for remuneraion;
2) The worker agrees whether impliedly or expressly that he will be bound by the employer’s instructions, which is reflective of the employer-employee relationship;
3) All other conditions in the agreement are consistent with ordinary contracts of service.
Last but not least, the next element to be fulfilled in order to ascertain whether an employer is vicariously liable is the tortious act must occur within the course of employment.
There are 2 conditions for this element:
1) The employee’s work is authorized by the employer; and
2) The employee does something that is authorised in an unauthorised manner.
This situation can be illustrated in the case of LAT v AYC & Anor [1969] 2 MLJ 194, where the plaintiff’s son was killed due to the careless driving of the first defendant, who was on an errand for his employers, second defendant. The Court held that since the journey was undertaken for the benefit of the employers, they were vicariously liable for the negligence of the first defendant.
Do you need answers and solutions in a legal action? Get legal advice from our lawyers at Liyana & Co.
Our lawyers have 10 years of experience in solving complex legal problems.
“Your Legal Savior”
📞📱 Let’s set an appointment and contact us at:
