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Employment Law Update – Employers Can Be Vicariously Liable For Employee Theft

The doctrine of vicarious liability means that an employer can be legally liable for wrongful acts committed by an employee. However, this will only be so if the wrongful act is carried out in the course of the employee’s employment.

Whether an act can be said to be “in the course of an employee’s employment” will be based on the facts of the individual case. Brinks Global Services Inc. transports items worldwide. Igrox Ltd provides fumigation services, including the fumigation of goods packed in containers for carriage abroad. Igrox was contracted by Brinks to fumigate containers containing 627 silver bars.

Two of its employees, B and R were sent to do so. They inspected the containers, which were in a secure fumigation compound, but left without carrying out the fumigation. R returned and stole 15 bars. This activity was seen on CCTV.

R was convicted of the theft but the bars were not recovered and Brinks, who had to reimburse the cargo owners, sought compensation from Igrox claiming that it was vicariously liable for R’s wrongdoing.

The case eventually came before the Court of Appeal who agreed that Igrox was liable. The basis for the decision was that the wrongful conduct was so closely connected with acts that the employee was authorised to do that the wrongful conduct may fairly and properly be regarded as done by the employee while acting in the ordinary course of the employee’s employment.

Igrox was responsible for the contents of the container during the fumigation process. B and R were employed to carry out the fumigation. The Court took the view that the theft was a risk reasonably incidental to the purpose for which R was employed. Thus in this case there was a sufficiently close connection between the theft and the purpose of R’s employment for Igrox to be liable.

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