Part III: Are Employers Liable for a Drunk Employee’s Behaviour?

In July 2021 and April 2022, we wrote about the rather unfortunate plight of Mr Schokman (the Plaintiff), a food and beverage supervisor who was “living the dream” on Daydream Island when he was urinated on by a fellow employee with whom he was sharing staff accommodation. Such accommodation had been organised by his employer, CCIG Investments Pty Ltd (the Defendant).

The Plaintiff argued the Employer was vicariously liable for the actions of the co-worker, Mr Hewett.

Initially, the trial judge found in favour of the Employer, ruling the Employer was not vicariously liable for the actions of Mr Hewett, as the act of urinating on the Plaintiff occurred outside the course of Mr Hewett’s employment. The Plaintiff appealed that point.

In its judgement delivered on 5 April 2022, the Queensland Court of Appeal took the opposite view, finding that the Employer was vicariously liable for Mr Hewett’s actions. The Court of Appeal determined there was a sufficient connection between Mr Hewett’s employment and the incident due to a number of factors, including that Mr Hewett was occupying the room as an employee and as such was required to take reasonable care to ensure his actions did not adversely affect the health and safety of other persons, including the Plaintiff, with whom he shared the room.

Since writing our last article “Part II: Are Employers Liable for a Drunk Employee’s Behaviour?” in April 2022, the Employer lodged an appeal with the High Court of Australia.

On 2 August 2022, the High Court of Australia delivered its decision in CCIG Investments Pty Ltd v Schokman [2023] HCA 21. Despite providing three separate judgements, the High Court unanimously found in favour of the Employer.

The High Court confirmed that in Australia, an employer can only be vicariously liable for the wrongful actions of its employees if that wrongful action arose ‘in the course of’ or ‘scope of’ employment.

The High Court disagreed that the current case was analogous to the earlier High Court decision of Bugge v Brown [1919] 26 CLR 110. The High Court considered that there was nothing in this case which pointed to the drunken act of Mr Hewett urinating on the Plaintiff “being authorised, being in any way required, or being incidental to” his employment with the Employer.

The High Court found that while the Plaintiff was required to share a room with Mr Hewett, the shared accommodation merely created physical proximity between the two men and provided an opportunity for Mr Hewett’s actions to impact the Plaintiff. Their Honours held that this was not enough to establish that Mr Hewett’s actions were sufficiently connected to his employment.

In their separate judgements, Edelman, Steward and Gleeson JJ all considered Mr Hewett’s act of urinating on Mr Hewett occurred during his ‘leisure time’ (i.e., at 3:30am after he had been drinking at the staff bar), when he was not performing his duties of employment and the Employer was unable to monitor his actions.

The appeal was allowed.

While an employer’s direct liability remains unchanged, the High Court’s decision clarifies an employer’s exposure in respect of vicarious liability for the actions of their employees, particularly those who employ workers in a “fly-in/fly-out” scenario where workers are required to reside in accommodation as part of their employment contract.

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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