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EMPLOYEES LIABILITY BILL 1990
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
This Bill deals with the liability for the payment of damages by employees for
negligence or other wrongful acts ("torts") committed by them in the course of their
employment.
At common law, an employer is vicariously liable for the torts committed by his
or her employees. That vicarious liability does not displace the personal liability of
the employee if the employee is sued directly by the tort victim. Furthermore, in
Lister v. Romford Ice (1957) A.C. 555 the House of Lords held that an employer who
has incurred any vicarious liability has a contractual right to a complete indemnity
from the employee who committed the tort. The Employee's Liability
(Indemnification of Employer) Act 1982 was enacted to overcome the decision in
that case. It was ultimately decided by the High Court in McGrath v. Fairfield
Municipal Council (1985) 59 ALR 18 that the Act also removed any right of the
employer to claim a contribution from the employee under the Law Reform
(Miscellaneous Provisions) Act 1946 as a joint tortfeasor.
The objects of this Bill are:
(a) to re-enact the Employee's Liability (Indemnification of Employer) Act
1982 to confirm the decision of the High Court that an employer is not
entitled to seek from an employee an indemnity in contract or a contribution
as joint tortfeasor, and
(b) to provide that, where the tort victim recovers damages directly from an
employee, the employee is entitled to an indemnity from the employer, and
to abolish any action in tort that an employer may have to recover damages
from an employee based on the loss of the services of any injured fellow
employee; and
Employees Liability 1990
(d) to enact consequential and ancillary provisions..
Clause 1 specifies the short title of the proposed Act.
Clause 2 provides that the proposed Act is to commence on a day or days to be
proclaimed.
Clause 3 (1) (a) re-enacts the prohibition on the employer seeking an indemnity
or contribution from an employee.
Clause 3 (1) (b) provides that, where the tort victim recovers damages directly
from an employee, the employee is entitled to an indemnity from the employer. The
employee is not entitled to an indemnity from the employer if the employee is
entitled to indemnity from some other person (e.g. the employee may have an
insurance policy which covers the relevant liability).
Clause 3 (2) confirms the High Court decision that an employer is prohibited from
seeking a contribution from the employee as joint tortfeasor. Other forms of
contribution that would be prohibited include contributions under section 151Z of
the Workers Compensation Act 1987.
Clause 4 abolishes any action in tort that an employer may have to recover
damages from an employee based on the loss of the services of any injured fellow
employee
Clause 5 continues the provision in the Employee's Liability (Indemnification of
Employer) Act 1982 that an employee is not protected if the conduct of the employee
constitutes serious and wilful misconduct or is not related to the person's
employment.
Clause 6 provides that an employer who becomes vicariously liable for the tort of
an employee may claim under any policy of insurance obtained by the employee
which covers the liability of the employee for the tort concerned.
Clause 7 ensures that the proposed Act prevails over any inconsistent Act or law
or any contract or agreement.
Clause 8 provides that the proposed Act binds the Crown.
Clause 9 ensures that the proposed Act applies even though the liability arose
before its commencement.
Clause 10 repeals the Employee's Liability (Indemnification of Employer) Act
1982
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