This article is written by Aditya Dubey, student of Indore Institute of Law, Indore. The author in this article has discussed the concept of Vicarious Liability specifically in the case of Principal employer and an Independent Contractor along with the modern view of an independent contractor.

Introduction

A tort is a civil wrong which involves the infringement of an individual’s legal rights and for which the remedy is in terms of unliquidated damages (where the value is not fixed, it changes with respect to the facts of the case and as per the jurisdiction of the court) Common torts include: Negligence, battery, assault, etc. Thus, a tortfeasor is the person who commits a tort. Employers happen to be vicariously responsible for the torts committed by their employees in the course of their employment, hence vicarious liability is the imposition of liability on the principal employer for the negligence of the employee or the person to whom the principal employer has entrusted or delegated the authority to perform a certain task.

What is Vicarious liability?

The principle of vicarious liability is based on the master-servant or principal-agent relationship. The basic idea of vicarious liability is that the master will be the person who is liable for the acts of his servant which are done under the course of the employment of the servant. The principal-agent liability relationship is based on the maxim “respondeat superior” which translates to “let the principal be liable” and hence according to this maxim the master/principal shall be liable for all the acts that his servant does in the course of that servant’s employment, this does not necessarily mean that the servant will not be liable at all, he will be liable but up to a certain extent of the offence committed. The master/principal shall be liable for the acts of the servant or agent as if he himself has done the act, the maxim that represents this statement is “qui facit per alium facit per se” meaning of which is, “he who does an act through another, does the act through himself”. In such cases, the victim or the person against whom a tort has been committed or the plaintiff can sue either of them i.e. he can sue either the master or the agent/servant hence their liability is joint and several which makes them joint tortfeasors under the law of torts.

Common examples:

1. Liability of the principal employer for the torts committed by his or her agent,
2. Liability of partners of a corporation for each other’s torts,
3. Liability of master for the torts committed by his or her servant.

What are the constituents of Vicarious liability?

There are three essential constituents required for vicarious liability.

There must be some kind of relationship between the employee or contractor and the principal employer

• The most important essential is the existence of a relationship between the principal employer and the employee or the contractor.
• The relationship between them must be related to some work given by the principal employer to the employee or the independent contractor.

The wrongful act must be related to the relationship in a certain way

• The wrongful act done by an employee must be done in the course of the employment of the employee or whilst the employee is doing the task given to him or her by the principal employer.
• In the case of an independent contractor, the task given must have the involvement of some kind of “inherently dangerous activity”.

The wrong has to be done within the course of employment

• The wrong committed by the employee must be done under the course of his or her employment. If it is out of the course of the employment then the employer cannot be proved to be vicariously liable for the actions of the employee.

What are the reasons for Vicarious liability?

• A person can be vicariously liable for the negligence of another even if the person had taken reasonable care, it does not matter whether the person was careful in all relevant concerns, such as selecting and supervising others.
• Vicarious liability encourages accident prevention by giving a principal employer financial interest in encouraging his employees to take care of the safety of others.
• As the employer profits from the acts of his employees, he should also bear to any losses that may arise because of those activities.

Who is an independent contractor?

• An independent contractor is an individual who performs or works for another individual (the principal) under an expressed or implied agreement and is one who is not under anyone’s control and is independently responsible for himself and his actions unless certain cases make the person who has hired the contractor responsible.
• An independent contractor is a person who supervises the worker community and compensates them for their work.

What is the relationship between an employer and an independent contractor?

• There’s no direct relationship between the two parties and the principal employer does not have any control over the labours employed by the independent contractor but the principal employer can communicate to the independent contractor about the way in which he/she wants the services that the independent contractor offers.
• it is the independent contractor who ultimately decides the method that will be used to perform the act or job assigned to him or her by the person who is the principal employer.

What are the liabilities of a principal employer?

The Contract Labour (Regulation and Abolition) Act, 1970, imposes several liabilities on both the principal employer as well as the independent contractor, it imposes the duty on the principal employer that he must ensure the independent contractor is doing everything with dignity and honour, and the following must be done also,

1. Under subsection 4 of Section 21, it is stated that the contract labourers can approach the principal employer if any default is found on the part of the independent contractor with respect to the payment of wages,
2. Whilst paying out the wages to the contract labours, it is the duty of the principal employer to ensure that a representative is present at the time of the payment.
3. He has to ensure that the independent contractor has to pay the minimum wages as per the law and must not violate the standard prescribed by the law.
4. In the case of absence of government or the commissioner of labour, the principal employer himself is required to pay the wages to the contract labours.
5. The principal employer is bound to maintain the records and the register of records, display notices, and must maintain the rules and regulations.
6. All the workmen must be provided with employment cards,
7. Other than all of these, the principal employer is bound to provide basic amenities to the workmen, basic amenities include the following,

• Canteen: It is the duty of the employer to provide all the workmen with a canteen if the number of workmen is more than 100 workers at one place and if the work will be going on for the next 6 months or more.

• Restrooms: The employer must provide restrooms to the workmen if the work is going to last for three or more than three months and then the workers will have a place to stay and rest during the night.

• Separate washrooms: Washrooms must be provided by the employer and these washrooms must be separate for both men and women.

• Other basic facilities: Other basic facilities include

1. Drinkable water,
2. First aid,
3. Washing area, etc.

What is meant by the course of employment?

For the liability of the principal employer to arise, two things are to be present in the scenario, firstly, the tort must be committed by the servant, and secondly, the servant must commit the tort in the course of his employment. So what is the course of employment? The legal definition of the course of employment is that it is a legal consideration of all the situations which may occur during the performance of a person’s job especially things done during the period of the time where the employer has to perform specific tasks given to him or her by the employer.

Illustration (where the principal employer will be liable for the acts of his employee)

Connor is the car driver of Ace, hence Connor is Ace’s servant/employee. One day, Ace was getting late for his office, so Ace shouted at Connor and told him to drive faster than normal. Connor drives faster than 130kmph on a highway which has a speed limit of 40kmph. Connor ends up hitting a little boy crossing the road, now Ace will be held liable for the actions of Connor, as Connor did everything under the course of his employment.

Illustration (where the principal employer will not be liable for the acts of his employee):

Connor is the car driver of Ace, hence Connor is Ace’s servant/employee. It is his duty to drive his boss to the office and then submits the keys of the car in the office until Ace returns. One day, Connor after taking his boss Ace to his office, he decides to take Ace’s car for a ride without Ace’s prior permission and without submitting the keys at the office and ends up hitting a little girl on his way to his friend’s apartment. Now Ace will not be liable for the actions of Connor and only Connor will be liable for the wrong he has committed negligently.

How to determine whether the contractor is independent or not?

In order to determine whether a person is an independent contractor or not, the court

• Control of the job: The manner in which the person employed works, if it is in the hands of the principal employer then he is not an independent contractor but an employee but if the manner in which he works is controlled by himself then he is classified to be an independent contractor.

• Nature of the work: An independent contractor brings his own machinery and all the items necessary to fulfil his job whereas, in the case of a normal employee, all the materials and machinery is provided by the principal employer himself.

• Mode of compensation: Payment is done after the completion of the task assigned to the independent contractor whereas, in the case of an employee, payment is given on a regular basis.

• Paid leave from work: An independent contractor has way more benefits in terms of paid leave as he is given a task and a time frame to complete that task in the amount of time assigned to him or her by the principal employer, hence an independent contractor is paid according to his or her performance.

What is meant by “Inherently Dangerous Activity”?

Employers are not liable for the acts of an independent contractor, by contract, unless the work involves some “inherently dangerous activity”. So the question arises, what kind of activities are considered as “inherently dangerous”? The activities such as transporting explosive material, blowing up land for the construction of roads or buildings, and dealing with wild animals. Because of the high chance of risk of an injury in these activities, a principal employer will be found to be liable for these kinds of activities are found to be done by an independent contractor.

Modern View of the relation between an independent contractor and a principal employer

The control test isn’t exclusive anymore:

This test isn’t as exclusive as it used to be in the past, because this was traditionally used to govern work relationships such as that of a householder and a servant or a farmer and an agricultural labourer, etc. The control test becomes irrelevant when applied to skill and professional work, therefore it has lost its position as an exclusive test in recent years.

Case Law: Dharangadhara Chemical Works Ltd. v State of Saurashtra

In this case, the Supreme Court of India laid down that the existence of the master to supervise and control the execution of the work done by the servant is a test which is based on the first impression and that the nature of control of work that is to be performed pr the procedure of the work may vary from business to business and the precise definition of it is not possible and it is not necessary to prove the principal employer’s control over the work that his or her employee is doing and the test of control is not necessarily universally applicable as there are many contracts in which the principal employer has no control in the manner in which the work will be done.

Conclusion

To sum it up, it can now be very well established that with this article that, an independent contractor is one who works for the principal employer with respect to an expressed or implied agreement, the things that he does for the objective shall be performed by him or her or any other individual worker hired by him or her and it will not make the principal employer responsible for the actions or the things that he had done whilst in the course of the employment unless the things that he does, involves something that is inherently dangerous to the society.