When is a company liable for its staff’s actions

This extract from a recent Federal Court case contains a statement of the law which renders the actions of employees, officers and agents of a company the legal responsibility of the company.

“THE LIABILITY OF FTM:  SOME GENERAL MATTERS

At all relevant times s 793 provided that:

Liability of bodies corporate

Conduct of a body corporate

(1)      Any conduct engaged in on behalf of a body corporate:

(a)          by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or

(b)          by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;

is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.

State of mind of a body corporate

(2)          If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:

(a)          that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and

(b)          that the person had that state of mind.

Meaning of state of mind

(3)      The state of mind of a person includes:

(a)          the knowledge, intention, opinion, belief or purpose of the person; and

(b)          the person’s reasons for the intention, opinion, belief or purpose.

(5)      In this section, employee has its ordinary meaning.

The effect of s 793 is that the conduct and state of mind of an official, employee or agent is attributed to the body corporate: Director of the Fair Work Building Industry Inspectorate v Robinson (2016) 241 FCR 338 at [48]–[50] (Charlesworth J).

This means that if either or both of Mr Elvin or Mr Puerto engaged in the conduct with which the contraventions are concerned and the conduct was within the scope of their actual or apparent authority, FTM also engaged in that conduct and their state of mind is taken to be the state of mind of FTM.”

 

Fair Work Ombudsman v Foot and Thai Massage Pty Ltd (in liquidation) (No 4) [2021] FCA 1242 delivered 14 October 2021 per Katzmann J