Analysis of Hollis vs Vabu - Case Study Example

Running Header: Hollis v Vabu [2001] HCA 44 Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: PART A Question 1: In this case, who was suing who and why? In particular, on what law/legal principle were the parties relying? In this case it was Hollis who sued Vabu Pty Ltd. Hollis was an ordinary member of public and he used to work for Team Couriers as a courier and Vabu traded as Crisis Courier in the town. Vabu Pty Ltd was sued by Hollis in respect of negligence and illegal acts of one the courier cyclists who acted negligently in his line duty. The case was taken to High Court by Hollis after both the NSW court of appeal and District Court of NSW dismissed his appeal and claim respectively. There was partly overturning of the findings at both the District Court and Court of Appeal. The legal principle that was being used was that of vicarious liability. Vicarious liability is kind of a strict liability which normally arises as a result of association between the actual negligent party and the party which is being sued as being negligent and made vicariously liable (Gleeson, 2001). It normally occurs regardless of the mistake of the employer. Vicarious liability is a very popular theme in many cases of negligence in Court and in many cases is found that the main reason to go to Court is to determine whether the worker is an employee or not. The liability of the employer’s for the torts of its employees can be represented by considerable financial obligations which have been avoided by the employers by making their workers to be like contractors who are independent. The law of tort states clearly that the business or company will be liable for its but will not be liable to its contractors. They used the scope of vicarious liability and issues respecting the nature of the relationship of the employment. Question 2: What was the outcome of this case and what appeared to be the reasoning of the court? Do you agree? The outcome of the case was that Vabu was held liable for the negligence of the courier who was an employee and not a contractor. A majority of the judges did find that Hollis was injured by an employee of Vabu Pty Ltd. The employment basis was used to measure the control that was not taken by Vabu Pty Ltd and the lack of capability of other cyclists as a group or individually to consult how they can improve their positions. It seems that Vabu did assume all the responsibility as to the uniform, discipline, training and direction of the bicycle couriers; also that Vabu did provide the bicycle couriers with radios and they did remain Vabu’s property and it was the only method of communication between bicycle couriers and Vabu; the bicycle couriers were supposed to put on Vabu’s advertising on their clothing during their duties all the time; and this made requirements such as deductions and insurance from their payments to be introduced by Vabu on the bicycle couriers without a chance of negotiation. The measure was not that tight so the couriers used to provide their own bicycle and Vabu had agreed that so majority of them did have their own bicycles and they used them in the course of the duty; the bicycle couriers catered for the expense of maintaining and providing those bicycles; that there was requirement to the bicycle couriers for provision of their own requirement and there was a conclusion that the couriers were real employees of Vabu for the function of assessing vicarious liability (Gleeson, 2001). The Court of Appeal and the District Court found out that the NSW Supreme Court did place much of its emphasis on the couriers having their own bicycles interpreting that this meant them running businesses of their own. I do agree with the judges because for the couriers owning their businesses and not having any other kind of control over their own work environment, the couriers cannot be concluded that the businesses they were running was their own and that they were also independent of Vabu Pty Ltd. The judges argued that if training and greater skill was required and the investment in capital was much significant the conclusion that was reached may have been different. Question 3: Discuss the lessons that might be learnt from this case. (5 marks) There are several reasons learnt from this case concerning the law of tort. The main lessons learnt focuses to the entities that have a wish to avoid vicarious liability that would affect persons. The entities wish would wish as much as possible to keep as independent contractors are supposed to allow a much greater of the control to the situation of work to such parties, for example not to carry any luggage for parties who do not have any authority from company and the alternative solution is to make special arrangement with insurance company for any liability that might occur due to their negligence. The other lesson that is learnt from this case is that having a contract which is in written form in any particular method does not matter that it indicates clearly that a party is an independent contractor because the court will make its judgment beyond the court (Williams, 2007). The other lesson is that if a person relationship to a company is that of servant or employee, then the law will automatically consider that person to a servant or an employee irrespective of the contract the person is having with the other party for vicarious liability purposes. Question 4: The courts made reference to ‘Vicarious Liability’. Discussion of vicarious liability in the context of the mentioned case above The mentioned case was solved under the law of tort under vicarious liability. All the decision that were made and any charges were all referenced from the vicarious liability. The discussion will first help to understand what vicarious liability is and how one can held liable under the same and then the usage of it will be emphasized to give us a clear picture of its importance in court cases. Vicarious liability is kind of a strict liability which normally occurs as a consequence of association between the actual negligent party and the party which is being sued as being negligent and made to be vicariously liable. It normally occurs not considering of the fault of the employer (Adams, 2005). Vicarious liability is a very popular subject matter in many cases of negligence in Court and in many cases is found that the main the reason to go to Court is to conclude whether the worker is an employee or not. The responsibility of the employer’s for the torts of its employees can be represented by substantial financial obligations which have been avoided by the employers by making their workers to be like contractors who are independent. The judges did find that Hollis was injured by an employee of Vabu Pty Ltd and under vicarious liability if an employee of a company injures a third party or commits an offence in the due course of his duty the employer is held liable (Nielsen, 2009). The employment basis was used to assess the control that was taken by Vabu and the lack of ability of other cyclists as a group or individually to consult how they can improve their positions. It seems that Vabu did not presuppose all the accountability as to the uniform, discipline, training and direction of the bicycle couriers; also that Vabu did provide the bicycle couriers with radios and they did remain Vabu’s property and it was the only technique of communication between bicycle couriers and Vabu; the bicycle couriers were supposed to put on Vabu’s advertising on their clothing during when they are performing duties belonging to the company all the time; and this made requirements such as deductions and insurance from their payments to be introduced by Vabu on the bicycle couriers without chance of concession. The vicarious liability applied to Hollis because the couriers were his employees and he did not apply any responsibilities or care to mitigate any liability that could occur (Ronald, 2008). The company should contain a particular provision that would require the company to defend, indemnify and hold the company risk-free from any claims from the outside parties that have a relation of operation of the company business. Indemnification is way of shifting the company’s responsibility for legal penalty but in general terms the provision of indemnification will not be cited as justification to impose vicarious liability to the company. The indemnity agreements are very well constructed and it seems court will no allow and enforce any ambiguous, vague and any burdensome provisions. An example of a vicarious liability case; In Holiday Vs National Telephone Company (1899) The defendant which was the Telephone Company was legally involved in putting the telephone wires along the street. The wires were passed through tubes, which were laid in trench that passed through under the level of the pavement. The defendant, the Telephone Company, had an agreement with a plumber who connected these tubes at the joints with solder and lead to the fulfillment of the defendant foreman. For the connection between the tubes to be made, it was found necessary to get blaze from the benzoline lamb for applying heat to the lamb (Elliot, 2005). The lamb had a safety valve. The plumber did dip the lamp into the caldron of solder that was melted which had been place over a fire near the foot way. The safety valve was not in good working condition and it exploded. The plaintiff who was walking on the highway on that street was injured by the molten solder after it splashed. This is what the court held. The defendant was to bear the liability because he had authorized the performance of work which due to its nature there was a possibility of danger occurring to the persons who were using the highway and that those who were executing the work did not carelessly cause injury to such pedestrians. PART B Question 1: Discussion of the obligation of fidelity and confidentiality of an employee The duty of an employee to confidentiality varies from that of fidelity. Confidentiality in general terms arises as a result of a contract and good faith while that of fidelity is as a result of employment relationship. The law states that there has been an implication that all employment contracts that employees should carry out a faithful service. This will involve a promise from the employee that he will perform his duties well and faithfully as it is contractually agreed. The duties are sub divided into three sub duties that the work should be performed, it will be performed very well and it will be performed faithfully. Fidelity in most of the cases will be there as the long as the relationship of the employment is there (Haykin & Moher, 2009). When the employment relationship ends then the binding terms are no longer there and the employment contract comes to an end then there will no reason for the for the former employee of the company to compete with the former employer as longer as there is no revealing of confidential information that do belong to the former employer. This will not extend to stopping the former employee from the usage of what he has experience or learnt in his future business. Fidelity during employment is a very easy concept and one must not compromise the legitimate or the reasonable interests of the employer (Durkin, 2005). Confidentiality needs to be well elaborated in an employment contract unless it is reasonably important for the performance of it and in this case it will be implied. Much of it will depend on the type of information and in this case being whether is a trade secret and also the range of its uniqueness. Despite the fact that it is an implied term there must be an attempt to bring it to the awareness of the employee. There is also this information that there is an equitable act for the violation of the breach of contract which operates to limit the ex-employee’s capability to draw on her ideas, know-how and stock of knowledge in the service of her own account or a new employer (McKendrick, 209). The best way is to outline the main duties in the employment contract so that there will be fewer disputes because unless the duties are very clear in equity and common law then trying to separate what is confidential and what is not confidential and what is subject to duty of fidelity and not will not be clearly defined. It is by implication terms in the employment relationships that all employees will operate in good faith to her or his employer. The obligation which is called the responsibility of fidelity does apply during the relationship of employment and in some cases it might survive termination (Cooke, 2005). The superseding consideration is that between the employer and the employee there will be an alliance of interest. There are several components that do which support fidelity and they might include; the employee has a duty to a duty to avoid conflict of interest and he is no supposed to compete with his employer or to work for another employer during the working hours; it is also the employee’s obligation to maintain the employer’s confidentiality of proprietary information which may include customer lists and trade secrets and it is presumptive right of the employer for the ownership of any copyrights or ownership which the employee has come up with in the due course of employment. Even if the employee is not competing with employer, if the employee has an outside business interests or employment he is breaching the implied duty of fidelity (Steele, 2007). The court will conclude that there is a breach of contract if such interests in outside interferes with the employee’s line of duty i.e. for example if the employee do spend much of his or her time that should be spent by the employee working for the employer or having an venture on the side. It is concluded that this is a breach of duty of fidelity because the employee is literally stealing time from the employer (Bryman, 2011). In the same case the employee is said to be stealing from the employer if resources from the employer are used to advance the employee enterprise i.e. for example if the employee makes use of the photocopier, email, fax machine or computer for her or his own business. It is not only outside employment or business interests that breach the duty of fidelity. When an employee volunteers to work for a charitable organization also do result to conflict of interests. This is for the reason that employers are allowed to have undivided loyalty and trust of the employee. For example the law courts may tend to discover a conflict a conflict of interest if one of the employees of the company does work for Canadian Health Society and in part time is a volunteer with the alcoholic’s right group. References Adams, W. H.(2005), General Law, Introduction to Law of tort, 6, (4), 125-130. Bryman, A.K. (2011). Principles of law, London: SAGE Publication Ltd. Cooke, J.F. (2005). Law of Tort, London: SAGE Publication Ltd Durkin, D. L. (2009). Law and Assurance, London: Oxford university press. Elliot, J. H. (2005). An Introduction to law, London: Routledge. Gleeson C. J. (2001). High Court of Australia, Retrieved February 20, 2012 from http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2001/44.html Haykin, S. R, & Moher, M. S, (2009). General law Environment: Prentice Hall McKendrick, E. L. (2009). "Vicarious Liability and Independent Contractors: A Re-Examination". The Modern Law Review 53 (6), 88-156. Nielsen, J.J. (2009) Law of contract and tort, Indianapolis: New Riders Ronald, B. E (2008), Response of Law to Negligence, London: oxford university press. Steele, J.C (2007). Tort Law, London: Oxford University Press Williams, G. B. (2007). "Vicarious Liability and the Master's Indemnity". The Modern Law Review, 20 (3), 55-102. Read More