A recruitment company was liable for the actions of its managing director, who punched an employee at a party outside office hours and left him brain damaged, the Court of Appeal ruled late last week.
The ruling overturns a previous decision by the high court and clarifies that businesses can be held vicariously liable in some circumstances for the actions of their employees even if they take place outside the workplace.
Clive Bellman was employed as a sales manager by Northampton Recruitment. In 2011, he attended a Christmas party which was organised by the company’s managing director, John Major, along with other staff members and their partners.
Alcohol was supplied at the party on the company tab. At midnight, the party drew to a close, but some members of staff continued to drink at the hotel bar. This was not a pre-planned extension of the party, the court heard.
Around 3am, a few staff members remained at the bar, where the conversation turned to work and Northampton Recruitment’s future. Employees, including Bellman, discussed a new office hire who they felt “was being paid substantially more than anyone else”.
The court heard Major “became annoyed at being questioned” about the hire’s appointment and stated: “I f**king make the decisions in this company, it’s my business.”
He proceeded to strike Bellman twice, the second blow causing him to fall backwards and hit his head on the marble flooring, knocking him unconscious. Bellman sustained traumatic brain damage from the altercation.
In 2016, the high court ruled the recruitment business was not liable for Major’s actions.
Judge Cotter, who presided over the high court hearing, said the after-party at the hotel bar “was, or without any doubt became, an entirely independent, voluntary and discrete early-hours drinking session of a very different nature to the Christmas party and unconnected with the defendant's business”.
He recognised Bellman was “entitled to feel greatly aggrieved” by Major’s assault but “sympathy with his position cannot impact upon the proper application of principle”. He rejected Bellman’s claims.
Bellman appealed, and the Court of Appeal overturned the previous decision. The judges unanimously agreed Northampton Recruitment was liable for the actions taken by Major during the after-party.
Lady Justice Asplin said Major “chose to wear his metaphorical managing director’s hat… to deliver a lecture to his subordinates” and was “exercising the very wide remit” Northampton Recruitment gave him “despite the time and place”.
Sybille Steiner, employment partner at Irwin Mitchell, said the ruling provided significant guidance on the concept of vicarious liability.
“The distinction between office work parties and impromptu after-parties will not be the deciding factor,” Steiner added. “If a senior member of staff uses the after-party to assert their authority and assaults someone, vicarious liability is likely to follow.”
And Paul Holcroft, associate director at Croner, said employers need to be aware “an employee’s field of activities will be looked at broadly”, such as examining the nature of the job and whether the nature of their role was engaged during the incident.
“For example, a manager who assaults an employee as a method of expressing his authority over junior employees may be found to have done this in their field of activities, as the nature of their job is to be in an authoritative position; even though an employer would not expressly authorise such an assault,” Holcroft explained.
Holcroft added employers who arrange social events should remind staff that attendance at these events is voluntary, participants will be treated and choose to attend on an equal basis and discussions regarding work are strongly discouraged.
Neither Bellman nor Northampton Recruitment, which has been listed as insolvent on Companies House, could be reached for comment.