In Yeung Mei Hoi v Tam Cheuk Shing and Another  HKCA 109, the Court of Appeal reversed the decision from the Court of First Instance and held that the employer was vicariously liable for an assault committed by its employee to another employee.
The Court of Appeal adopted and applied the "close connection test" from Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd  3 HKLRD 884. In Ming An, the Court of Final Appeal adopted the test for vicarious liability as being where a connection between the employee's unauthorised tortious act and his employment is so close as to make it fair and just to hold his employer vicariously liable.
In Yeung Mei Hoi, a security guard of a residential estate assaulted his supervisor when his supervisor inquired about his failure to report promptly the location of a taxi that had improperly entered into the estate and properly wear his uniform. The Court of Appeal held that the First Instance Judge (who found the employer was not vicariously liable for the security guard's assault) adopted too narrow an approach on the scope of employment. The security guard was on duty when he lost his temper and assaulted his supervisor. At that moment of time the security guard's scope of employment required him to be subject to the supervision and discipline of the supervisor. The Court of Appeal held that the security guard's unauthorised act of assault during this moment was closely connected with his employment.
The Court of Appeal held that the system of supervision and discipline of security guards by a supervising officer put in place by the employer carried with it a risk that the subordinate may react in an unauthorised way in the course of being subject to supervision and discipline. The argument advanced on behalf of the employer that what the security guard had done was an act of insubordination which the employer should not be held vicariously liable for was rejected. The Court of Appeal concluded that it was fair and just to hold the employer vicariously liable because this risk can be insured against by the employer.
Employers need to be aware that they can still be vicariously liable for unauthorised acts of an employee. They should take steps to mitigate any foreseeable risks.
Employees Compensation insurers should be mindful of the implications of this decision in that their insured (i.e. employers) could be vicariously liable for unauthorised acts of insubordination of its employees and there is the potential of greater exposure arising from cases of this nature.