In an article first published by Thomson Reuters Accelus, Managing Associate, Annabel Mackay, considers the Supreme Court's recent decision in Mohamud v Morrison Supermarkets plc on the scope of an employer's liability for its employee's actions.

Many employment statutes impose vicarious liability on employers for wrongdoing by their employees. Under the Equality Act 2010, discriminatory acts and omissions committed in the course of employment are attributed to the employer. From June 25, 2013, employers became vicariously liable for detriments to whistleblowers caused by their employees and workers.

Where liability is not imposed by statute, employers will be vicariously liable for an employee's wrongdoing where there is a sufficiently close connection between the employment and the wrongful conduct. The appropriateness of this test has been challenged due to its breadth and potential ambiguity. However, in the recent case of Mohamud v Morrison Supermarkets plc, the Supreme Court confirmed that the "close connection test" should be followed and must be viewed broadly.

The claim concerned a customer, Mr Mohamud, who had asked whether he could print out some documents from a USB stick at a supermarket petrol station kiosk. One of the employees, Mr Khan, told him to leave, using "foul, racist and threatening language." Mr Mohamud left the kiosk and returned to his car and switched on the engine. Before he drove off, Mr Khan opened the front passenger door and told him never to come back. Mr Mohamud was punched on the temple after telling Mr Khan to get out of his car and shut the passenger door.

When Mr Mohamud switched off the engine and went to shut the passenger door himself, he was subjected to a serious attack by Mr Khan. A supervisor instructed Mr Khan to stop but he continued. Mr Mohamud was left curled up on the petrol station forecourt as he tried to protect his head from Mr Khan’s punches and kicks. The attack was unprovoked; Mr Mohamud had not said or done anything abusive or aggressive.

The trial judge and the Court of Appeal expressed sympathy for the claimant but found that Morrisons was not liable because the claim failed the "close connection test." Mr Khan's role involved keeping the petrol pumps and the kiosk in good working order and serving customers. However, the judgments were influenced by the fact that Mr Khan's duties did not involve a clear possibility of confrontation or place him in a situation where violence was likely to occur.

The claimant argued on appeal that a broader test of whether the employee was acting in the capacity of a representative of his employer should be applied. The Supreme Court considered this argument in the context of the origins and development of the doctrine of vicarious liability. It noted that vicarious liability was based on public policy considerations. An employer should be responsible for the risks created by its business enterprise.

The cases had originally focused on whether the employee was acting in the course of his employment. This test was subsequently divided into two limbs: whether the employee's acts had been authorised by his employer; or whether the employee was performing authorised acts in an unauthorised way. However, the application of this test had led to strained interpretations of what amounted to an unauthorised mode of performing an authorised act.

In Lister v Hesley Hall Ltd, a case involving sexual abuse by a warden at a boarding school, the House of Lords adopted an alternative, broader test of whether the wrongful acts were so closely connected with employment that it would be just to hold the employer liable. This test was "imprecise" but involved the court making an evaluative judgment based on all the circumstances and guidance provided by past cases. It had the advantage that it could address the circumstances in which an employer should be held responsible for unauthorised acts. The Supreme Court was not persuaded that there was anything wrong with the Lister test.

The alternative test put forward by the claimant of being an "authorised representative" was regarded as being "hopelessly vague" whereas the "attraction of the close connection test is that it is firmly rooted in justice."

The Supreme Court confirmed that when determining whether vicarious liability should be imposed, it is necessary to consider the nature of the employee's job and whether there was a sufficient connection between the employee's role and the wrongful conduct. Applying that test, the Supreme Court found that Morrisons was liable for Mr Khan's unprovoked assault on the customer. Mr Khan was employed to serve customers: "his employers entrusted him with that position and it is just that as between them and the claimant, they should be responsible for their employee's abuse of it." Mr Khan's motives were irrelevant.

Although Mr Khan stepped out from behind the counter and followed the claimant to the forecourt this was a "seamless episode." He threatened the claimant and told him never to return to the employer's premises. The Supreme Court concluded that, "this was not something personal between them; it was an order to keep away from his employer's premises which he reinforced by violence."

The decision of the Supreme Court therefore confirms that the "close connection test" remains good law and should be applied broadly to achieve social justice. However, the way in which the Supreme Court applied that test suggests that employers may find it more difficult to defend such claims in the future. The Court of Appeal's decision had been influenced by the fact that Mr Khan was not placed in a position where confrontation or violence was likely to occur (unlike a security guard or bouncer, for example).

In contrast, the Supreme Court looked at the nature of Mr Khan's role broadly and found that his acts were within the "field of his activities." The verbal abuse took place in the context of Mr Khan's customer facing role and, despite ignoring his supervisor's instructions, he had not "metaphorically taken off his uniform from the moment he stepped from behind the counter." The verbal abuse and the physical violence in the forecourt were treated as an unbroken sequence of events. He was not acting in a personal capacity.

The Supreme Court explained that, "the court is not required to conduct a retrospective assessment of the degree to which the employee would have been considered to present a risk." However, employers should conduct an ongoing assessment of the extent to which their business activities, including their employees, create risks to the community and how such risks can be avoided. The doctrine of vicarious liability thereby encourages good practice as well as ensuring that claimants can obtain redress where the "close connection test" is satisfied.

The Supreme Court's application of the "close connection test" will prove influential, particularly in cases where the employee has committed an unauthorised act. As the Supreme Court noted, "the risk of an employee misusing his position is one of life's unavoidable facts." Employers must guard against the risks associated with an employee's abuse of their position through careful recruitment, proper training and supervision. Disciplinary policies should confirm the consequences of such misconduct and be brought to the employee's attention in order to deter wrongful conduct. In addition to having the right policies, employers should monitor customer complaints to identify themes and assess their employees' performance against their policies through an effective appraisal process.

Given the broad approach which the Supreme Court adopted when assessing the scope of the employee's customer-facing role, employers may also wish to give further thought to the definition of an employee's duties.