When an employee commits wrongful conduct while doing his duties, the doctrine of vicarious liability kicks in. The courts have lately enlarged the definition of this term and have concluded that it includes activities closely related to the accomplishment of such obligations created by employment.
In the absence of an exemption provision or agreement between the parties, an employer would be liable by the operation of law. It is common practice for some employment contracts to include exemption clauses that exclude the employer from liability as a result of wrongful acts performed by its employees. Traditionally, these clauses have been interpreted narrowly, and they would not be enforced if they were against public policy.
In Fujitsu Services Core (Pty) Limited v Schenker South Africa (Pty) Limited (21830/2014)  ZAGPJHC 111 (25 March 2020), the High Court had to decide on a claim for damages as a result of theft. The Respondent employee was responsible for the importation of laptops and computers from Germany for the applicant. In terms of the National Distribution Agreement between the parties, Schenker would be exempted from any claim whatsoever arising out of any negligent act or omission.
Immediately after the precious cargo arrived at OR Tambo, it was loaded onto the Respondent’s employee’s truck, which disappeared, never to be seen again.
It was common cause that when the goods got stolen, the employee was not acting within the scope of their duties. The court referred in its judgement to the Supreme Court of Appeal’s finding in Stallion Security (Pty) Ltd v Van Staden 2020 (1) SA 64 (SCA), where it was established that an employer’s enhancement of risk is a factor that should be considered in terms of vicarious liability.
The court applied the facts of Stallion to the case at hand and established that Schenker had not done enough to secure the safety of its client’s products. The employee had unlimited access to cargo and clearance documentation, and there were no checks and balances to ensure that the employee did not abuse his power. Therefore, an Exemption agreement or clause would be of no value where an employer does not take reasonable care to ensure his client’s property is protected from its employees.
Article By: CEO Training Division