Cases in Law for Business - Case Study Example

Case Study The issues in the first part of the question relates to the possibility of a claim under vicarious liability against Cobend. Moving on the second issues of dismissal by Cobend of a possible employee named Jim will be discussed. The first thing that needs to be pointed out is that there were possible legal issues between Diadum and Cobend but these will not be discussed. Vicarious liability signifies to liability which is imposed upon employer, arising from the tort committed by employee against a third party. The most important aspect of vicarious liability is therefore that a relationship of employer and employee must be existent rather than that of an employer and an independent contractor1. Moving on it needs to be pointed out that this sort of liability is a form of stricter liability, in the sense that employer is held accountable for default,t of employee, even though the employer had not been at fault. There have been various justifications which have been provided for this approach which include the control test, deeper pocket justification etc which have been said to be adopted by judges. (Professor Glanville Williams) 2 The three tier test which needs to be proved in order to hold an employer vicariously liable is a) offender was the employee (of that employer) b) a tort had been committed by the employee c) and it was committed in the course of employment.3 When determining the nature of the relation with the person that is whether he is an employee or an independent contractor the facts as well as the law have to be considered. However if there are written documents on whose construction it can be established then it is purely a question of law. (Davies v. Presbyterian Church of Wales)45 The distinguishing factor has been said to be contract of service or of employment which clearly point out to an employer-employee relationship allowing vicarious liability for torts of others, however if there is a contract for services then no employer-employee relationship will be found and thus no vicarious liability.6 The traditional aspect for determination of employee from independent contractor was the control test which took into account the degree and right of control. It has been said by Bramwell LJ that the employer should be able to determine 'how' works was to be done (Yewens v. Noakes)7 It needs to be pointed out tat the use of the control test has been limited because of difficulties being faced by courts, however it has not been abandoned. 8 The next important aspect which needs to examined it that of mutuality of obligations that is offer of work by employer and acceptance by employee. It needs to be pointed out that these tests are helpful but not conclusive. Therefore there are many factors which have been taken into account and the most important case can be said to be Ready Mixed Concrete (South East) Ltd. V. Minister of Pension and National Insurance9 on the applicability of such factors.10 By looking at the above case it will be presumed that Jim, the software engineer was an employee of Cobend rather than an independent contractor. The second point of the test which requires the commitment of a tort by the employee has clearly led to the employer being vicariously liable (Staveley Iron and Chemical Co. Ltd v. Jones)11 . There had been variations from this approach but it has been restored that an employer will be liable for the tort committed by the employee.12 The final requirement of 'in the course of employment' has been said to b a vexed requirement. There have been found to be many policy reasons for not holding employers liable but it has been said that if an employee has committed a tort which comes under the scope of employment then the employer will be held liable otherwise not. An important point which needs to be regarded with regards to the facts is that it needs to be established that Jim acted carelessly and therefore Cobend should be held accountable. The main points of consideration are the questions of the reason for employment of the employee and if it was, was the task done in a wrong way. The formulation that has been used states that a wrongful act will be in course of employment if has been authorised by master or the act which had been authorised by the master was done in a wrong and unauthorised mode.13 It needs to be pointed out that the employer may be held accountable for acts which he had forbidden unless appropriate instructions had been given so as to escape liability. The case of liability to employers was found in Limpus v. London General Omnibus Co.14where the employer forbid drivers to race but a collision was caused due to racing.15 Finally it needs to be pointed out that where there has been a commitment of tort by the employee for which the employer has been held to be vicariously liable, both of them can be found to be joint tortfeasors.16 Further complete indemnity has been awarded to the employer for the torts of the employee for which they have been held to be vicariously liable. The House of Lords has given indemnity to the employer where the employee commits a tort even though he had undertook n the contract to perform his services with due care. This right is lost where it is found that the employee had not been employed for performance of such services for which he committed a tort.17 In the specific question it needs to be pointed out that Jim can be an independent contractor or an employee. If he is found to be an independent contractor then there would be no liability unless it has been authorised by Cobend. However this seems to be unlikely. If it can be proved that Jim is an employee, then there will be the possibility of proving that he committed a tort with regard to effective repairs. With regards to the specific question it can be said that a reasonable engineer would have fastened the casting properly. The possibility of a tort being committed can be open to arguments but there can be possibilities of negligence on part of Jim. Finally this can be found to be in the course of employment. The possibility of Cobend being liable for damages also depends on the issue of remoteness, the foresee ability of the rug getting damaged as a result of the falling part is an important issue which needs to be determined.18 The main issue with regards to the dismissal of Jim is that of ascertaining whether he provided a contract of service or a contract for service. This is important because an employee is employed within the ambit of contract of service and an independent contractor comes under the head of contract for services.19 There have been facts which have been taken into account when determining whether a person is an employee or not. (Ferguson v. John Dawson & Partners20) The agreement which took place between the parties is also taken into account (Massey v. Crown Life Assurance)21 The control test which has been discussed above is also an important factor but not a decisive one. If it is found that Jim was an employee and his contract has been terminated then there can be possibilities of legal actions. However if he was an independent contractor then there can be no legal actions. There are various situations where the employment can be terminated by breach of contract that is summary dismissal, constructive dismissal, the employer is unable to continue or the employee repudiates the contract. For the purpose of this question only summary dismissal will be discussed as it is relevant to the facts.22 Summary disposal is where the employee is dismissed without notice. Liability can be evaded by employer if it is proved that there was a serious breach of contract which led to dismissal. However if sufficient justification is not provide then the employee can claim for damages at at common law for wrongful dismissal and the employer is liable for a breach of contract. (Pepper v. Webb23) 24The claimant needs to prove in High Court that a dismissal in breach of contract has occurred that is the minimum period of notice was not served and loss was suffered by him. Thus Jim has to argue that the summary dismissal has led to such breach However if the employer can provide justification for such dismissal then there would be no claim. Thus this is the ground on which Cobend has to rely upon. BIBLIOGRAPHY MACKEN, J. J., & MACKEN, J. J. (2002). The law of employment. Sydney, Lawbook Co. NORTH CAROLINA BAR ASSOCIATION FOUNDATION. (2007). 2007 fundamentals of employment law. [Cary, N.C.], North Carolina Bar Association Foundation. MURPHY, J., & STREET, H. (2007). Street on torts. Oxford, Oxford University Press. MARKESINIS, B. S., JOHNSTON, A. C., & DEAKIN, S. F. (2007). Markesinis and Deakin's tort law. Oxford, Oxford University Press. FORD, K. E., NOTESTINE, K. E., & HILL, R. N. (2000). Fundamentals of employment law. Chicago, Ill, Tort and Insurance Practice, American Bar Association. CARMICHAEL. (2000). Employment Rights of Casual Workers. The Industrial Law Journal. 29, 73-78. DAVIES, A. (2006). Casual Workers and Continuity of Employment. Industrial Law Journal. 35, 196-201. LEWIS, D., & SARGEANT, M. (2000).Essentials of employment law. People and organisations. London, Institute of Personnel and Development. SELWYN, N. M. (1988). Law of employment. London, Butterworths. ROGERS, W. V. H., WINFIELD, P. H., JOLOWICZ, J. A., & WINFIELD, P. H. (2006). Winfield and Jolowicz on tort. London, Sweet & Maxwell. Howarth, D. Textbook on Tort. (London: Butterworths, 2004) second edition Weir, T. A Casebook on Tort. (London: Sweet and Maxwell, 2004) tenth edition Giliker, P. and S. Beckwith Tort. (London: Sweet and Maxwell, 2004) second edition. Mullis, A. and K. Oliphant Torts. (Basingstoke: Palgrave Macmillan, 2003) McBride, N. and R. Bagshaw Tort Law. (Harlow: Longman, 2005) second edition Cane, P. Atiyah's Accidents, Compensation and the Law. (Cambridge University Press, 2004) sixth edition Read More