Can an employer be responsible for an employee’s conduct in Queensland?

Imagine a worker is injured because of another employee’s negligence. Or perhaps an employee is subjected to workplace bullying, discrimination or sexual harassment by a colleague. 

While the person responsible for the conduct may be liable, if you run a business in Queensland, you might also be legally responsible for what your staff do when they’re at work. This is called ‘vicarious liability’, and in Queensland you see it come up in both physical and psychological injury claims. 

What is vicarious liability?

Employers have specific duties towards their employees and other workers. One of these is a duty of care to protect employees and workers from the actions of other workers that cause injury or are harmful. 

What does this really look like? If one worker harms another person in the course of their work, the injured person may be able to claim against both the individual and the employer, and the employer could be found vicariously liable for what occurred. This can be a significant risk for businesses, especially where the conduct leads to a serious injury or the long-term loss of income. 

Here’s how vicarious liability works in Queensland and when an employer may be held responsible for the actions of another worker. 

When can an employer be vicariously liable?

An employer being responsible for their employee’s actions is generally ‘switched on’ when:

• The person who caused the harm is an employee (not an independent contractor) of the employer; and
• The wrongful act happens in the course of employment, or has a close connection to the person’s work.

In practice this could include situations like:

• Discriminatory or sexually harassing behaviour between workers
• Bullying, victimisation or other conduct that causes psychiatric injury
• Physical injuries caused by a worker’s negligence, such as the careless use of equipment

The injured worker can usually name both the individual and the employer in their claim. But in reality, most claims focus on the employer because they have deeper pockets in the form of more insurance and resources. 

Types of workers and vicarious liability

Whether someone is an employee or an independent contractor can have an impact on whether their employer might be vicariously liable for their actions. But what is the difference?

Employees are directly employed by the employer. They receive a salary or payment on a commission basis, and in Australia they’ll also be paid superannuation and receive minimum entitlements such as leave under the Fair Work system. Under Fair Work, whether someone is an employee depends on the real substance of the relationship – factors like how regular their hours are, whether the business controls when, where and how they work, whether they can work for other clients, and whether they receive paid leave and other entitlements. 

On the other hand, contractors operate their own business and provide services for a fee. They typically invoice for their work, can work for multiple clients at once, usually have more control over when, where and how the work is done, and may provide their own tools or equipment. 

Unlike employees, genuine contractors generally don’t receive paid leave or other employee entitlements under the Fair Work system, although super can still apply in some cases depending on the arrangement. 

This distinction matters because employers are generally more likely to be held vicariously liable for the actions of employees than for the actions of independent contractors. However, this isn’t an infallible rule, and the label used on the contract won’t be the ultimate decision-making factor. Instead, the court will look at the real substance of the working relationship. Where a ‘contractor’ is treated like staff, tightly controlled and presented to the world as part of the business, a court may still find the company liable. 

What does ‘in the course of employment’ mean?

For an employer to be found to be vicariously liable for the action of an employee or worker, the action that caused the injury must occur ‘in the course of work’. But the phrase is interpreted broadly by the Queensland courts, and it’s certainly not limited to what happens between 9 am and 5 pm or on the shop floor itself. For example, it could include:

• employer-sponsored events like Christmas parties, team-building days and client functions
• conferences, seminars and training sessions paid for by the employer
• work-related travel where the employer covers accommodation or expects the worker to socialise with colleagues or clients
• misuse of work phones, email or messaging platforms to harass or bully someone

Recent High Court guidance (for example, CCIG Investments Pty Ltd v Schokman) confirms that there must still be a real connection between the employment and the wrongdoing. 

What that means is that the employment must provide the ‘occasion’, not just the opportunity, for the act. Where an employee is acting purely as a private individual – ‘on a frolic of their own’ as the court called it – the employer is less likely to be liable.

Defences and risk-reduction for employers

Even if the conduct takes place by an employee (not a contractor) in the ‘course of employment’, this doesn’t mean that employers will automatically be liable for everything their workers do. There are two key ways they can limit this risk and exposure:

Taking reasonable steps

Under section 133 of the Anti-Discrimination Act 1991 (Qld), an employer can avoid liability for discrimination, sexual harassment or vilification if they can prove they took reasonable steps to prevent that kind of conduct. 

The Queensland Human Rights Commission suggests reasonable steps can include:

• clear, well-publicised policies on discrimination, sexual harassment and bullying
• regular training for all staff, especially managers and supervisors
• fair, accessible complaint procedures with prompt investigation and follow-up
• non-discriminatory recruitment, promotion and access to training

Also, what’s ultimately considered reasonable depends on the size and resources of the business – larger businesses generally have more resources than smaller companies and are expected to do more than a small family company.

Conduct outside the scope of employment

If a worker engages in serious, wilful misconduct that caused injury but the conduct was wholly unconnected to their job duties, the employer can argue that the act falls outside the scope of employment. If the court agrees, then vicarious liability won’t apply.

But courts are increasingly willing to find the necessary connection to employment, particularly in cases where the misconduct happens in a work-related setting or involves a worker taking advantage of their position or authority. 

Key Queensland laws

The law around vicarious liability in Queensland is made by both case law and legislation. The main legislation that applies is:

• The Anti-Discrimination Act 1991 – section 133 makes employers vicariously liable for discrimination or sexual harassment carried out by employees, workers or agents in the course of work (subject to a reasonable steps defence).
• The Civil Liability Act 2003 – contains specific provisions relating to child abuse and when institutions or employers may be liable for this.
• The Work Health and Safety Act 2011 – sets out employer duties to provide a safe workplace.

These statutory laws sit alongside common law rules developed through court decisions. For example, over time the courts have clarified when conduct occurs ‘in the course of employment’, when an employer may be responsible for the actions of workers and what steps may be sufficient to avoid liability. 

Some important decisions include decisions like CCIG Investments v Schokman and more recent Queensland Court of Appeal decisions about institutional liability for abuse, such as Robinson v Cape York Hospital and Health Service.

In that case, the Queensland Supreme Court found a health service liable after a District Chief Executive Officer repeatedly bullied and undermined the Director of Nursing, causing her serious psychiatric injury. The employer was held both directly and vicariously liable for the CEO’s conduct, and was ordered to pay more than $1.4 million in damages. 

The case highlights the significant financial and legal consequences that can arise when workplace misconduct by senior employees is not properly addressed.

Understanding your responsibilities as an employer

Vicarious liability can expose employers to significant legal and financial consequences, even when you aren’t directly involved in the conduct that caused the harm. Given the potentially significant consequences of these claims, it is important to obtain legal advice if you are involved in a workplace dispute where vicarious liability may arise.

If you need advice about employer liability, workplace complaints, discrimination or harassment claims, or defending a vicarious liability claim, contact our team at Armstrong Legal. Our employment lawyers can advise you on your rights and obligations and help you respond to workplace disputes before they escalate.