Keenan and Riches’BUSINESS LAW

Chapter 16Employing labour

have only come in on the present scale since the Second
World War.
In times past, therefore, a person, whether employed
or self-employed, would simply receive money from the
employer and it was less easy to distinguish one from the
other.
There was, even so, a need to do so, because an
employer was liable to pay damages to those injured by
his employee if those injuries took place during the
course of the employee’s work. This is called an em-
ployer’s vicarious liability and it is dealt with in greater
detail later in this chapter.
A person was not vicariously liable for injury caused
to others by a self-employed (or independent) contrac-
tor who was doing work for him. Obviously, then it was
necessary to find a test to decide whether A was, or was
not, an employee of B.
The earliest test was called ‘the control test’. Since it is
not normally necessary to use this test today in order to
decide whether A is the employee of B because we have
much more evidence of the relationship now, why should
we bother with it?
The answer is that it is sometimes necessary to decide
whether B, who is truly employed by A, has been tem-
porarily transferred to another person, C, so that C (the
temporary employer) and not A (the general employer)
is liable vicariously for the injuries caused to a person or
persons by B.

Joint vicarious liability

In situations such as Mersey Docks, the possibility of

joint liability between employing parties had never been

considered.

The Court of Appeal did so in the following case

and any principled objection to joint liability has been

removed.

453

Mersey Docks and Harbour Boardv

Coggins & Griffiths (Liverpool) Ltd(1946)

The Board owned and hired out mobile cranes driven

by skilled operators who were employees of the Board.

Coggins & Griffiths, who were stevedores, hired one of

the Board’s cranes and an operator, Mr Newell, to unload

a ship.

In the course of unloading the ship, a person was

injured because of Mr Newell’s negligence and the court

had to decide whether the Board or Coggins & Griffiths

were vicariously liable along with Mr Newell for the lat-

ter’s negligence. The matter was one of control because

the Board was quite clearly the general employer. Actu-

ally, the answers given by Mr Newell to questions put

to him by counsel in court were highly important. At

one point he said: ‘I take no orders from anybody.’ Since

he was not truly employed by Coggins & Griffiths and

since he did not, so he said, take orders from them, there

was no way in which he could be regarded as under

their control. Therefore, his true employer, the Board,

was vicariously liable for Mr Newell’s negligence.

Comment. It is presumed in these cases that the gen-

eral employer continues to be liable and it is up to him to

satisfy the court that control has passed to a temporary

employer. This is a very difficult thing to do and the tem-

porary employer will not be liable very often, though it is

a possibility.

Viasystems Ltdv Thermal Transfer

(Northern) Ltd(2005)

The claimant was having air conditioning installed in

a factory. The main contractor, Thermal, subcontracted

the ducting work to company A which used company B

to supply a fitter and his mate. While working under the

fitter and a supervisor from company A, the fitter’s mate,

C, by what the Court of Appeal described as foolish

negligence, managed to flood the claimant’s factory.

In a claim against Thermal and A and B, the High

Court found that B was liable. In this appeal company B

contended that company A was liable because they had

control of C who was working within the environment of

company A.

The Court of Appeal decided it was time to re-assess

existing law and ruled that company A and company B

were liable for the negligence of C, each bearing 50 per

cent of the damage, thus introducing joint vicarious liab-

ility, a concept hitherto unknown in this country.

Shareholders and directors

In spite of the fact that a majority shareholder and/or a

director of a company are not, strictly speaking, under

the control of the company which, of course, they in large

measure control, it seems from the decision of the Court

of Appeal in Secretary of State for Trade and Industryv

Bottrill(1999) and of the Employment Appeal Tribunal

in Connollyv Sellers Arenascene Ltd(2000) that majority

shareholders and directors will be regarded as employ-

ees of the company where there is a written contract of