High Court Finds Employer Not Responsible For Urination In Shared Accommodation

An August 2023 decision of the High Court has held that an employer is not responsible for an employee’s act of urinating on a colleague, despite the act occurring in shared staff accommodation provided by the employer where employees were required to live. ¹ 

Background

A food and beverage supervisor (Supervisor) commenced employment at a spa and resort (Resort) on the Whitsunday Islands in late 2016. Under the terms of the employment contract, the Resort required the Supervisor to live in shared accommodation with another employee, being his team leader (Team Leader). On 7 November 2016, the Team Leader had returned to their shared accommodation in an intoxicated state, stood over the Supervisor’s bed and had urinated on the Supervisor.  As a result of the incident, the Supervisor suffered a sudden, temporary loss of voluntary muscle tone, and suffered from PTSD.

The Supervisor claimed that the Resort was vicariously liable as employer for the act of its employee, the Team Leader. In the first instance, the Queensland Supreme Court dismissed the Supervisor’s claim on the basis that the actions of the Team Leader were not committed in the course of his employment. On appeal, the Queensland Court of Appeal held that the requisite connection between the Team Leader’s actions and employment existed by reference to the terms of the Team Leader’s employment, which required him to reside in shared staff accommodation. The Supervisor was therefore awarded $431,739 in damages. The Resort then sought leave to appeal to the High Court.

Decision

The High Court unanimously quashed the Queensland Court of Appeal’s decision, finding that the Resort was not liable for the Team Leader’s conduct.

The High Court rejected the Supervisor’s argument that the compulsory shared accommodation established the requisite connection between the employment and the Team Leader’s actions. The High Court found that the fact that the shared accommodation provided the Team Leader with an opportunity to commit the wrongful act did ‘not provide a proper connection’ with the employment to establish vicarious liability. The High Court stated that, ‘the most that could be said to arise from the circumstances of shared accommodation was that it created physical proximity between the two [employees] ’.

The High Court also rejected the Court of Appeal’s finding that the circumstances of this case were analogous to Bugge v Brown (1919) 26 CLR 110, where an employer was held to be vicariously liable for the actions of the employee in starting a fire during his break from work, which spread and caused damage to a neighbouring property.  Unlike the current case, the employee’s act of lighting the fire to cook his midday meal was ‘a requirement of, and authorised by, the employment ’ and was ‘intimately connected ’ with the employee’s performance of his daily tasks. By contrast, the High Court held that the Team Leader ‘could only be said to be acting in accordance with his employment contract by sharing the accommodation ’ and ‘nothing points to the drunken act in question being authorised, being in any way required by, or being incidental to, the employment ’.

In their joint minority judgment, Justices Edelman and Steward further distinguished this case from Bugge v Brown because the conduct occurred ‘at 3.30am after he had been drinking at the staff bar on his leisure time ’, ‘not at the place at which he was employed to perform work, as a team leader ’ and not ‘at a time and place where his employer was permitted to be present or to monitor him ’.

Lavan Comment

Under the common law principles of vicarious liability, an employer will only be liable for the wrongful acts of employees if the wrongful acts are committed in the course or scope of their employment. Therefore, an employer will not be liable for employees’ wrongful acts if they are not sufficiently or closely connected to the employees’ duties or powers in their employment.

Whether an act falls within the course or scope of employment depends on the circumstances of the particular case. To determine whether an employee’s act was performed within the course or scope of employment, employers should identify what the employee was actually employed and directed to do.

In this decision, the High Court confirmed that an act committed by an employee when the employee is on a ‘frolic of [their] own ’ or an act which is ‘utterly unconnected ’ with anything the employee was employed to do, will not attract liability.

Interestingly, in Justices Edelman and Steward’s minority judgment, they noted that courts have historically conflated different areas of law and have mistakenly treated them all as ‘vicarious liability ’. Their Honours stressed that by doing so, courts have created in vicarious liability an ‘unstable principle ’.

This decision does not give employers any additional latitude or reduce their liability, but does serve to clarify an increasingly complex area of law, particularly where there is some doubt whether there was the requisite connection between the employment and the employee’s conduct.

If you have any questions about employers’ vicarious liability, please do not hesitate to contact Lavan’s Employment, Safety and Education team.