In recent judgments by the Supreme Court of Appeal and the High Court in Johannesburg, our courts have held that employers may be held liable for the damages caused by the criminal conduct of their employees in spite of the fact that such criminal conduct was clearly not committed in the course and scope of the employees’ duties.
Vicarious liability is the legal principle whereby an employer may be held liable for damages caused by the negligent conduct of an employee. In order to establish vicarious liability, it is usually necessary for the plaintiff to prove that the negligent conduct of the employee which caused the damages took place within the course and scope of the employee’s duties to its employer.
During 1945, the first in a series of cases which have been referred to as “deviation cases” was decided. In the matter of Feldman (Pty) Ltd v Mall 1945 AD 733, the Appellate Division (as it was then) decided that an employer was liable for the damages caused by an employee who, while attending to a delivery for his employer using his employer’s vehicle, stopped to consume alcohol along the way and then caused a collision. The court reasoned that the employee had not entirely abandoned his duties when the collision occurred.
In the matter of Minister of Police v Rabie 1986 (1) SA 117 (A), the Appellate Division (as it was then) found that the Minister of Police was liable to pay damages for an unlawful arrest which had been carried out by an off-duty policeman who had been employed by the South African Police Service as an engineer.
In the case of F v Minister of Safety and Security 2012 (1) SA 536 (CC), Constitutional Court Judge Mogoeng explained: ‘Two tests apply to the determination of vicarious liability. One applies when an employee commits the deed while going about the employer’s business. This is regarded as the “standard test”. The other test finds application where wrongdoing takes place outside the scope of employment. These are known as “deviation cases”.’
On 27 September 2019, the Supreme Court of Appeal handed down judgment in the matter of Stallion Security (Pty) Ltd v Van Staden 2020 (1) SA 64 (SCA). In that matter, Bidvest Panalpina Logistics (Pty) Ltd had contracted Stallion Security to provide access control security services at three of its premises. None of the security officers were issued with firearms. Stallion had appointed a site manager (Mr Khumalo) who was given special security clearances to gain access to the Bidvest premises and the buildings on the premises. Mr Khumalo hired a firearm from one of his colleagues and, while on sick leave, used his access privileges to steal R35 000 from a Bidvest employee at gunpoint in his office. Mr Khumalo thereafter murdered the Bidvest employee. The widow of the Bidvest employee sued Stallion Security for damages.
The Supreme Court of Appeal (SCA) held that the fundamental question has always been whether the wrongful act of the employee is sufficiently related to the conduct authorised by the employer to justify the imposition of vicarious liability. An employer will not be liable where the employee commits the wrongful act while wholly about his own purposes, unless there is a sufficiently close link between the employee’s act and the business of the employer. The extent to which an employer has created or enhanced the risk of wrongful conduct by its employee is a factor which the court will consider in determining whether a sufficiently close link exists.
When deciding whether an employer should be held liable for the intentional wrongful conduct of an employee, the court is likely to take the following factors into consideration:
- the opportunity that the nature of the employment afforded the employee to abuse his or her power;
- the extent to which the wrongful act may have furthered the employer’s aims (and hence be more likely to have been committed by the employee);
- the extent to which the wrongful act was related friction, confrontation or intimacy inherent in the employer’s enterprise;
- the extent of power conferred on the employee in relation to the victim;
- the vulnerability of potential victims to wrongful exercise of the employee’s power.
The Supreme Court of Appeal concluded that a sufficiently close link was established to hold Stallion Security vicariously liable for the theft and murder committed by its employee.
In the matter of Fujitsu Services Core (Pty) Ltd v Schenker South Africa (Pty) Ltd the High Court in Johannesburg handed down judgment on 25 March 2020. The court found that Schenker was liable for the theft of Fujitsu’s computer equipment from a cargo warehouse at OR Tambo International Airport by one of Schenker’s drawing clerks. The clerk’s duties required him to transport goods from the warehouse on behalf of Schenker’s clients and, for this purpose, the employee had been given access to the warehouse and authority to remove goods from the warehouse.
In order to mitigate the risk of being held liable for the wrongful conduct of their employees, employers are advised to:
- Take measures to minimise the risk that employees may engage in unlawful conduct. The measures available will depend on the nature of the employee’s duties, but will entail careful background checks during employee recruitment, closer supervision of employees and the introduction of additional checks and balances to enhance employee accountability.
- Consider their insurance policies and ensure that they have sufficient coverage to mitigate against the risk of claims arising from vicarious liability.