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8 - Transferring the burden: the employer's right of indemnity

Published online by Cambridge University Press:  17 November 2010

Douglas Brodie
Affiliation:
University of Edinburgh
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Summary

The manner in which risk is allocated by the contract of employment will obviously vary depending upon the express terms in question. However, there is a conventional allocation sanctioned by the standardised implied terms of the employment contract. Unless the parties indicate to the contrary this default position will apply. In all of this a key implied obligation requires the employee to take reasonable care in the performance of his/her duties. At present if the employee breaks that obligation and the employer suffers loss as a result then the employee will be liable in damages. The third party who is injured may also bring an action directly against the employee. The most famous instance of this dimension of the employment relationship is the decision of the House of Lords in Lister v Romford Ice and Cold Storage. There the defendant employee injured his father, a fellow employee, in the course of his employment. The father brought an action against the company and recovered damages in respect of the son's negligent act. The employer, in turn, brought an action against the employee claiming that it was entitled to indemnification by way of damages for breach of an implied term that he would use reasonable skill and care in driving. It was held that the driver was under a contractual obligation of care to his employers in the performance of his duty as a driver and that the company was entitled to recover damages.

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Publisher: Cambridge University Press
Print publication year: 2010

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