Vicarious Liability: Employer’s Liability for Acts of its Employees

I. CONCEPT

GENERAL RULE: Whoever committed the act or omission causing damage to another is liable for such damage to the injured person.

EXCEPTION: In the doctrine of vicarious liability, another person is made responsible for the acts or omissions of another. The essence is the relationship between the person responsible and the one who committed the act or omission. Under this doctrine, the employer is presumed negligent, thus, the employer must prove that it had exercised due diligence in the selection and supervision of its employees in order to avoid liability.

II. DEFINITION

1. Vicarious Liability – refers to a situation where someone is held responsible for the acts or omissions of another person.

• It comes from the word vicarius or “vicar.” It means representative, deputy or substitute; anyone acting “in the person of” or agent of a superior.
• In the context of the workplace, the employer can be held responsible for the acts or omission of its employees, provided it can be shown that it took place in the course of their employment.

2. RELATED TERMS
3. Tort – the unlawful violation of a private right, not created by contract, and which gives rise to an action for damages; it is an act or omission producing an injury to another, without any previous existing lawful relation, of which the said act may be said to be a natural outgrowth or incident; under common law, it embraces not only unintentional acts but also those that are intentional and criminal
4. Quasi-Delict (or Culpa-Aquiliana) – an act or omission that causes damage to another, there being fault or negligence and there is no pre-existing contractual relation between the parties

III. LEGAL BASIS

 1. LEGAL MAXIM

1. Respondeat Superior – an American doctrine which means that the negligence of the employee is conclusively presumed the negligence of the employer.
2. Bonus Pater Familias – Civil law concept which lays down the standard of care required, which is that of a good father of the family; applied to negligence cases, the negligence may be rebutted by proof that ordinary diligence or the diligence of a good father of the family was taken to prevent damage.

2. LEGAL PROVISIONS

1. Article 2176, New Civil Code – “Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.”
2. Article 2180, New Civil Code – “The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible.

x x x

The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

x x x

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage.

– This article provides for the solidary liability of an employer for the quasi-delict committed by an employee. The responsibility of employers for the negligence of their employees in the performance of their duties is primary and, therefore, the injured party may recover from the employers directly, regardless of the solvency of their employees. (Victory Liner, GR 154278, December 27, 2002)

3. RATIONALE

What has emerged as the modern justification for vicarious liability is a rule of policy, a deliberate allocation of a risk. The losses caused by the torts of employees, which as a practical matter are sure to occur in the conduct of the employers’ enterprise, are placed upon that enterprise itself, as a required cost of doing business. They are placed upon the employer because, having engaged in an enterprise, which will on the basis of all past experience involve harm to others through the tort of employees, and sought to profit by it, it is just that he, rather than the innocent injured plaintiff, should bear them; and because he is better able to absorb them and to distribute them, through prices, rates or liability insurance, to the public, and so to shift them to society, to the community at large. Added to this is the makeweight argument that an employer who is held strictly liable is under the greatest incentive to be careful in the selection, instruction and supervision of his servants, and to take every precaution to see that the enterprise is conducted safely. (Victory Liner, GR 154278, December 27, 2002)

1. Allocation of risk – as the employer derives some advantage from the employee’s activity, it is fair that the risk of that activity should be allocated to the employer as part of the overall cost of doing business
2. As a matter of policy – as incentive for employers to exercise care in the selection, training and supervision of all employees
3. Just and practical remedy – most employers have “deeper pockets” than their employees due to their superior economic position which will help ensure that the injured party will be properly compensated and deter future harm

4. WHO IS LIABLE

1. TORTFEASOR – refers to the person who committed the act or omission causing damage to another
2. PERSONS WHO ARE RESPONSIBLE FOR THE TORTFEASOR – parents over their minor children, guardians over their ward, employers over their employees, the State over its special agent, teachers or heads of establishments of arts and trades over their pupils and students or apprentices

• These persons are liable for the negligence of those for whom they are responsible because of the relationship between them. The liability contemplated is primary and direct and not subsidiary so that the aggrieved party may directly sue the person responsible without need of a court decision convicting the one acting and proof of such person’s insolvency. This, however, is subject to the defense of due diligence of a good father of the family.

5. EMPLOYER-EMPLOYEE RELATIONSHIP AS BASIS

1. TWO KINDS OF EMPLOYERS

1. Those engaged in business – for the employer to be held vicariously liable, the negligent act must be done while in the service of the branches where he is employed or on the occasion of his functions or within the scope of his assigned task

1. Those not engaged in business – for the employer to be held vicariously liable, the negligent act of the employee must be done within the scope of his assigned task

2. SCOPE OF LIABILITY

The employer is vicariously liable for the negligence of his employees when such negligence is committed:

1. While in the service of the branches where he is employed or on the occasion of his functions
2. Within the scope of his assigned task

Both provisions apply to employers: the first, to owners and managers of an establishment or enterprise; and the second, to employers in general, whether or not engaged in any business or industry. The first covers negligent acts of employees  committed either in the service of the branches or on the occasion of their functions, while the second encompasses negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the former in both employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged in a business or industry, are covered so long as they were acting within the scope of their assigned task, even though committed neither in the service of the branches nor on the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They perform functions which are beyond their office, title or designation but which, nevertheless, are still within the call of duty. (Castilex Industrial Corporation, GR 132266, December 21, 1999)

1. The employer is vicariously liable for negligence of the employee committed during the whole time that the employee is suffered to work in the branch office where he is employed but not the time it takes for him to go from home to work or work to home.
2. If there is some special benefit to the employer, including “special errands” or “roving commission” rule (where the employee is allowed to use the employer’s vehicle in the performance of his functions), then the employer is still liable.

• If the employee left the direct route or pursuing a personal errand, then the employer is not vicariously liable for his negligent acts while pursuing such personal errand.

1. If the employee is performing an activity in furtherance of the employer’s interest, then the employer is vicariously liable for his negligent acts.
2. In Francis High School vs. CA, G.R. No. 82465, February 25, 1991, the Court absolved the employer-school from liability for a freshman student who drowned during a school picnic while trying to rescue a female teacher who was apparently drowning on the ground that the teachers were not in the actual performance of their assigned task, not in the school premises, not on a school day, not sanctioned by the school principal.
3. In Castilex Industrial Corporation vs. Vicente Vasquez, Jr., et al., G.R. No. 132266, December 21, 1999, the Court absolved the employer of liability for damages due to an accident caused by its manager, who was driving his company-provided vehicle, on the ground that the manager was not acting within the scope of the functions entrusted to him.
4. NO STRICT INTERPRETATION OF EMPLOYER-EMPLOYEE RELATIONSHIP

Although Article 2180 speaks of employer and employee, this is not to mean the same as the technical term employer-employee relationship as defined under the Labor Code. Thus, even though there is no employer-employee relationship, strictly speaking, for purposes of vicarious liability there can be a finding of employer-employee relationship.

However, this employer-employee relationship cannot be presumed. The plaintiff must still prove its existence through the presence of all the following requisites:

1. That the employee was chosen by the employer personally or through another
2. That the service to be rendered is in accordance with orders which the employer has the authority to give at all times

• That the illicit act of the employee was on the occasion or by reason of the functions entrusted to him

1. Working scholar of a school is considered an employee for purposes of vicarious liability

In Filamer Christian Institute v. IAC, G.R. No. 75112, August 17, 1992, the school was held vicariously liable for the negligence of a working student, assigned as part-time janitor, who was driving the school car when it got into a vehicular accident. Although the working student was not strictly an employee of the school, as defined by labor laws, the Court found it sufficient that the act of driving at the time of the incident was for the benefit of the school.

1. Registered owner of a motor vehicle is conclusively presumed the employer of the driver

In Filcar Transport Services vs. Jose A. Espinas, G.R. No. 174156, June 20, 2012, the registered owner was held vicariously liable for the personal driver of its corporate secretary, to whom the vehicle was assigned. Although the actual employer of the driver was the corporate secretary, under the motor vehicle registration law, the registered owner is presumed the employer.

In Mariano C. Mendoza & Elvira Lim vs. Spouses Gomez, G.R. No. 160110, June 18, 2014, between the actual owner and the registered owner of the vehicle, the vicarious liability lies with the registered owner. The registered owner cannot rely on the defenses available under Article 2180, such as that the act complained of was beyond the scope of the employee’s assigned task or that it exercised the diligence of a good father of a family. His only recourse is to sue the actual owner and/or the driver later on the basis of unjust enrichment.