Chapter 16Employing labourEmployer’s defences
There are three main defences which an employer may
have if he is sued under the rule of vicarious liability.
These are set out below:
1 An exclusion clause in a contract or notice. As a
result of the Unfair Contract Terms Act 1977, an employer,
like other people, cannot exclude or reduce his liability
for death or bodily injury caused by his own negligence
or that of his employees. As regards other types of dam-
age, such as damage to property, an exemption clause in
a contract or a notice will apply to exclude or reduce the
liability, but only if the court thinks that it is reasonable
that this should happen.
Thus, in the case of a dry-cleaning contract, if by the
negligence of employees cleaning material is not prop-
erly removed so that the owner of the clothing contracts
a skin disease, to which he is not especially susceptible,
no exclusion clause in the contract for cleaning or in a
notice in the shop can remove or restrict the employer’s
liability for this bodily harm.
However, if the clothing is, by reason of an employee’s
negligence, merely damaged and there is no resulting
physical injury, then an exclusion clause or notice might
operate to remove or restrict the liability of the employer
if the judge thought it was reasonable for it to do so in
the circumstances.
Although the Act gives no criteria for what is reason-
able and it is a matter to be decided by the judge in each
case, it would be generally true to say that the device
of an exclusion clause in a contract or notice has lost a
lot of its force as an employer’s defence. (See further,
Chapter 9 .)
As regards the position of the employee where the
employer has taken an exemption clause in the contract,
e.g. for damage to the other party’s property while in
the course of transit, then although such a clause may be
effective to exempt the employer, it has not protected
the employee who is not in privity of contract with the
third party. Reference should now be made to the Con-
tracts (Rights of Third Parties) Act 1999 under which
the parties to the contract, i.e. the employer and the third
party, may if they wish extend the exemption clause to
the employee or the court may infer that this has been
done unless the original parties have expressly excluded
third party (i.e. the employee’s) rights.
2 Voluntary assumption of risk. This defence is also
referred to as volenti non fit injuria (to one who is will-
ing no harm is done). This defence is most often tried in
employment cases when employees sue their employers
for injuries received at work. We will have a look at
these cases later in this chapter. However, the defence is
available to an employer when an outsider sues him on
the basis of vicarious liability for injury caused by his
employees.499
the erection of the stand was probably ultra vires, since
there was no specific power in the Council’s charter to
put one up, did not matter. There had been authorisation
by the Council resolution.
(ii)So far as registered companies are concerned, the
Companies Act 1989 made amendments to the Com-
panies Act 1985 (see now Companies Act 2006) under
which a company may alter its objects by special reso-
lution, or be registered with objects, which state merely
that it is to carry on business as a general commercial
company so that it may carry on any trade or business
whatsoever. The company also has power to do all such
things as are incidental or conducive to that end without
listing those powers.
Such a company will have effectively opted out of
the ultra viresrule so that its employees are likely always
to be engaged on intra viresactivities so long as they
are within the scope of their employment. The company
will of course continue to escape liability where the em-
ployee is doing something he is not employed to do, as
in HeasmansvClarity Cleaning(1987) (above).
In addition, companies formed under the Companies
Act 2006 need not state their objects on registration.
They may do so voluntarily in the articles (not the mem-
orandum as before) and so for business or commercial
companies the matter of ultra viresdoes not arise.
The old principles of ultra vireswill continue to apply
to charter and statutory companies.Cutlerv United Dairies (London) Ltd
(1923)
The defendants’ employee left the defendants’ horse
and van, two wheels only being properly chained, while
he delivered milk. The horse, being startled by the noise
coming from a river steamer, bolted down the road and
into a meadow. It stopped in the meadow and was fol-
lowed there by the employee who, being in an excited
state, began to shout for help. The claimant, who had
seen all of this, went to the employee’s assistance and
tried to hold the horse’s head. The horse lunged and the
claimant was injured. The claimant sued the defendants,
alleging negligence because apparently the horse was