1. VICARIOUS LIABILITY and the Recruitment Industry Paul McNally Towergate Insurance 5 March 2013

2. Introduction What is Vicarious Liability? How does it affect you? What can you do about it?

3. Vicarious Liability Simplified definition in this context ‖The liability of an Employer arising from the actions of their Employees that are committed during the course of their employment.

4. Vicarious Liability This can be liability for injury, damage or errors and omissions in the course of the work. Employer does not need to be at fault themselves, just deemed to have authority.

5. Implications Responsibility for actions of the temp workers, including Damage to third party property Injury to third party persons Errors and omissions In addition to the traditional risks of their own mistakes Not usually applicable to Permanent placements.

6. Employment Status The employment status of temporary agency staff is unclear in the law. Temporary worker can be deemed an employee of agency despite no control or supervision. Certain factors can affect the likelihood of temporary worker being deemed an employee o the agency.

7. Agency Worker Regulations 2010 Came into effect 1 October 2011. Giving agency workers the same basic employment conditions as directly employed staff. Subject to 12 weeks continuous work in the same role. Does not clarify employments status. May increase likelihood of temporary worker being deemed as employee of the agency.

8. Standard Contract Conditions REC model can be used by member agencies. Seeks to make end client the employer of the temporary worker. Employment status still not 100% clear and could be challenged. Contingent liability could still arise.

9. Non-standard Contract Conditions Larger clients may insist Onerous clauses, not just for insurance/indemnity. Employment status can be passed back to agency. May expressly make agency responsible for errors and omissions of temporary worker. Must be disclosed to insurance underwriters. Broker/insurer contract vetting services.

10. Insurance – Standard Non Vicarious May only cover acts of negligence, errors and omissions by the agency itself. Errors and omissions committed by the temporary worker would not be covered.

11. Insurance - Vicarious Extended specialist recruitment policies. Rating and exposure. Not an off the shelf solution. Do you have the correct cover?

12. Examples of liability Standard Non Vicarious Agency own staff negligent in checking qualifications, experience of references. Vicarious Breach of Covenant committed by a temporary worker. Software engineer produces a faulty system. Medical professional administered incorrect treatment.

13. Summary Employer can be liable for actions of employees. This can include Employment Agencies. AWR and Terms of Business can affect this. Protect with insurance. Cover must be correctly advised.