Vicarious liability – An employer’s worst nightmare

The concept of vicarious liability remains an elusive concept and is not clearly understood my many employers (and lawyers for that matter!). The Courts have over the years developed the concept substantially by extending which acts give rise to such liability. It is not always clear whether an act by an employee is done within the course and scope of employment and this remains the biggest challenge to pursuing or defending such a claim.

Written By of Cowan-Harper-Madikizela Attorneys

Recently the Supreme Court of Appeal was required to determine whether an employer could be held to be liable for an act of murder perpetrated by its employee in Stallion Security v Van Staden (526/2018) [2019] ZASCA 127 (27 September 2019).

The appellant (“Stallion”), a security company, provided security services to Bidvest Panalpina Logistics (Pty) Ltd (“Bidvest”) at two of its warehouses and head office. Stallion primarily regulated access to the premises. While the security guards had access to the premises, they were not authorised to access to offices. The site manager was provided with an override key which granted them unrestricted access to any part of the premises, including the offices of Bidvest.

Mr Ronald Khumalo was initially employed by Stallion as a security guard at Bidvest’s premises. After a short period, Mr Khumalo was promoted to site manager after a recommendation by Bidvest, who were impressed by Mr Khumalo’s performance. Shortly after his promotion Mr Khumalo became tardy, unkempt and ill. It later transpired that he had encountered financial difficulties and borrowed money from ‘the wrong people’. As he was unable to repay his debts, the persons from whom he had borrowed the money ‘started hurting him’. As a consequence of this he was placed on sick leave by Stallion and relieved of his duties at Bidvest.

Mr Khumalo became desperate and knew that Bidvest kept a petty cash box in its head office and that Bidvest’s financial manager, Mr van Staden, often worked late. During October 2014 Mr Khumalo hired a firearm from a fellow employee and decided that he would wait until the cover of darkness before engaging in a robbery of Bidvest’s offices. Two days later he arrived at Bidvest’s offices at midday and observed that Mr van Staden was present. He then waited until 18h00 to access the office by using the override key.

Mr Khumalo approached Mr van Staden and held him at gunpoint, demanding access to the petty cash box. Mr van Staden indicated that he could not access the petty cash box and instead offered Mr Khumalo all of the money in his personal bank account, a sum of R35 000.00. Mr Khumalo then demanded that Mr van Staden make an EFT immediately which Mr van Staden did.

After the EFT was effected, Mr Khumalo escorted Mr van Staden out of the building and demanded that he drive the two of them to the Eastgate Shopping Centre nearby. It then dawned on Mr Khumalo that Mr van Staden would likely report him to the police and, faced with this realisation, he then shot and killed Mr van Staden.

Mrs van Staden, the deceased’s wife, instituted a claim for some R1.6 million for loss of support. Her claim was granted in the High Court and Stallion subsequently appealed to the Supreme Court of Appeal (“SCA”).

The SCA found that South Africa’s law on vicarious liability should be developed to include situations where an employee has contributed to the creation of the risk of harm and that this may constitute a relevant consideration in establishing a link between the harm caused and the business of the employer.

The Court found that even though Mr Khumalo was on sick leave during the time that the harm was caused and that Stallion did not provide him with a firearm, Stallion would nevertheless be liable in the circumstances. The Court found that Mr Khumalo was able to gain access to Mr Van Staden’s office by way of the override key and because, as the site manager, he was required to make unannounced visits to the premises. As a consequence of this, his presence at Bidvest’s offices, even after 18h00, did not raise any suspicion and permitted him unrestricted access to Bidvest, its employees and their property.

Further, his crime was also enabled by his intricate knowledge of Bidvest’s business. These facts created the material risk that Mr Khumalo could abuse his powers, which he did. The SCA also found that Stallion was contracted to provide security services and to protect the constitutional rights of Bidvest and Mr van Staden. While Stallion had entrusted that function to Mr Khumalo, he had failed to exercise this duty.

This judgment has the potential to expose employers to significant risk for in respect of the acts of their employees. It is difficult to imagine, in these circumstances, how Stallion could have intervened to avert the actions of Mr Khumalo and to avoid being held vicariously liable for his acts. Employers will need to reconsider the way in which they allow their employees to perform their duties and which duties they entrust to certain employees. A failure to do so may result in them being held vicariously liable.

Neil Coetzer

Neil Coetzer
Head of Employment

Courtney Wingfield

Courtney Wingfield
Senior Associate of Employment

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