CCIG Investments Pty Ltd v Schokman [2023] HCA 21
When is an employer legally responsible for the wrongful conduct of an employee?
In CCIG Investments v Schokman, the High Court confirmed that employment must do more than provide the opportunity for the conduct to occur. There must be a sufficiently strong connection between the wrongful act and what the employee was employed to do.
What happened on Daydream Island?
Mr Schokman worked as a food and beverage supervisor at the Daydream Island Resort and Spa.
Because the position required him to live on the island, his employer provided furnished, shared staff accommodation. Mr Schokman shared a room with another employee, Mr Hewett.
One night, Mr Hewett became intoxicated at the staff bar. At approximately 3.30 am, Mr Schokman woke unable to breathe because Mr Hewett was standing over his bed and urinating on him.
The incident caused Mr Schokman to suffer a cataplectic attack. He had a history of cataplexy and narcolepsy, but those conditions had previously been well managed.
Mr Schokman claimed that the employer was vicariously liable for Mr Hewett’s negligent conduct.
The decision by the Queensland Court of Appeal
The original trial judge dismissed the claim, finding that Mr Hewett’s conduct was not committed in the course of his employment.
The Queensland Court of Appeal reversed that decision.
It considered it significant that Mr Hewett was required by his employment contract to live in the staff accommodation. He occupied the room as an employee rather than as an unrelated private tenant.
On that basis, the Court of Appeal found a sufficient connection between the employment and the incident.
CCIG Investments appealed to the High Court.
What did the High Court decide?
The High Court unanimously allowed the employer’s appeal.
The central question was whether Mr Hewett’s conduct occurred in the course or scope of his employment. Answering that question required close attention to what he was actually employed to do.
Mr Hewett worked as a team leader in a resort restaurant. Urinating on his sleeping colleague was not authorised, required, or incidental to those duties. It had no real connection with his work.
The shared accommodation created physical proximity between the two employees and gave Mr Hewett the opportunity to affect Mr Schokman. However, opportunity alone was not enough to make the employer vicariously liable.
When can an employer be vicariously liable?
An employer can be liable for an employee’s unauthorised, intentional, or even criminal conduct. The conduct does not need to have been approved by the employer.
There must, however, be a sufficiently strong connection between the wrongful act and the employee’s role.
Relevant features may include whether the employment gave the employee:
- Authority or power over another person;
- Trust or control;
- A special role involving the injured person; or
- An ability to create intimacy through the performance of their duties.
Mr Hewett had not been assigned any special role involving Mr Schokman. Nothing he was employed to do was performed in the shared room. The accommodation provided the location of the incident, but it did not bring the conduct within the scope of his employment.
What does the decision mean for workplace injury claims?
The decision draws an important distinction between an employer’s direct liability and its vicarious liability.
Vicarious liability asks whether the wrongful conduct of an employee was sufficiently connected with that employee’s work. It focuses on the role and duties of the person who caused the harm.
A direct negligence claim asks a different question: whether the employer itself failed to take reasonable care to protect an employee from a foreseeable risk.
Mr Schokman had initially pursued both types of claim, but only vicarious liability was considered in the appeals. The High Court did not decide that an employer can never owe duties concerning compulsory staff accommodation.
Each case will depend on matters including:
- What the employee who caused the harm was employed to do;
- Whether their position gave them authority, power, trust, or control;
- Whether the employment merely provided an opportunity for the conduct;
- Whether the employer knew of any relevant risk; and
- Whether there is a separate allegation that the employer’s own conduct was negligent.
The fact that an incident occurs in employer-provided accommodation is therefore relevant, but it does not by itself make the employer vicariously liable.
This case note is a general summary of the decision and does not constitute legal advice.