There are various situations where employees might consider themselves having two employers: an employee on secondment to another employer, an employee who is hired by another employer to perform services or an employee who provides consultancy services to another employer.
The question of whether both employers can be vicariously liable for the actions of these employees was considered in the landmark ruling in Viasystems v Thermal Transfer, S&P Darwell and CAT. The court in Viasystems introduced the concept of dual vicarious liability after overturning the legal assumption that only one employer could be held vicariously liable for an employee's actions.
In the recent case of Hawley v Luminar Leisure Limited the Court of Appeal found that Luminar, the "temporary deemed employer" was solely vicariously liable for the action of an individual who was employed by another party.
Luminar hired doormen employed by ASE Security (ASE) to provide security at one of its nightclubs. When working at one of Luminar's nightclubs, one of ASE's employees assaulted a member of the public. The doorman was convicted of assault and the victim of the assault commenced civil proceedings against ASE and Luminar claiming they were "each responsible" for the actions of the doorman. The Court of Appeal upheld the High Court's ruling that Luminar was vicariously liable for the doorman's actions and assessed ASE's contribution at nil.
This decision may seem surprising, especially in light of the fact that ASE had failed to confirm the doorman in question was suitable for the job prior to employing him. However, the Court of Appeal considered that Luminar had sufficient control over the doorman to be held vicariously liable for his actions. Although ASE employed, paid and had the power to dismiss the doorman, Luminar held out the doorman as its employee, for example by requiring the employee to wear Luminar uniform. Luminar subjected the doorman to its standards of services and code of conduct and could replace the doorman for whatever reason. In addition, although the doorman reported to the ASE head doorman on duty at the nightclub, his ultimate report was to Luminar's manager.
This case serves as a warning to employers that in certain circumstances they could be held to be the "temporary deemed employer" of another company's employees and be vicariously liable for their actions. What, then, should employers be doing to safeguard their position?
Firstly, employers ought to have a policy or code of conduct for all persons working for them, whether employees or not, communicating the standards of conduct and behaviour that are expected of the persons who work for the employer. Training also has an important role to play in helping manage incidents safely. However, the flipside to this is that actions taken to ensure incidents of this nature do not occur can also be considered as factors pointing to an employment relationship due to the element of control exercised over the individual.
Indeed the Court in Hawley was satisfied that the doorman was a temporary deemed employee of Luminar because of the control exercised by Luminar over the doorman. Employers must strike a balance between managing the individuals under their control effectively and the risk of being deemed their employer.
Employers who use the services of another company's employees should also look to protect themselves in the event that something does go wrong. The best way to do this is through an indemnity from the general employer in relation to actions of their employees whilst "on hire" to the temporary deemed employer. It is important to back up any indemnity with insurance and to ensure that the employer also takes out insurance to cover the indemnity. As was the case in Hawley, it is always possible the employer will go in to liquidation.