Company-sponsored charities and vicarious liability

Corporate social responsibility is an integral part of a company’s outward operations. It is continually evolving, with CSR teams researching and implementing new ways to meaningfully contribute to a wider society.

A recent CSR trend has seen employers incentivising their employees to volunteer at worthwhile organisations by authorising their request(s) for leave of absence whilst still paying them their normal rate of pay. However, employers may need to take a step back and consider their exposure to claims of vicarious liability in this context, specifically when their employees volunteer with organisations that their employers sponsor.

At the risk of oversimplification, vicarious liability can be defined as one person being held accountable for the unlawful actions of another. In the context of charities, the general position is that where a volunteer agrees to carry out duties to deliver a charity’s services, the charity is responsible for the actions of that volunteer.

However, does the burden of liability shift where employees volunteer at organisations which are sponsored by their employer? The principle of vicarious liability also applies to employers who are liable for the unlawful and/or wrongful conduct of their employees, when such conduct arises during the course of the employee’s employment.

Would an employer be vicariously liable if the following situation was in play?

An employee requests to volunteer at a charity which is sponsored by their employer;

Their employer authorises this request and the employee undertakes their volunteering duties; and

While doing so, commits an act of harassment against another.

If the victim of the abuse raised a claim, the employer is likely to say that they are not liable, and that the responsibility lies with the charity.  After all, the general position is that charities are responsible for their volunteers.  Inevitably the charity will claim the opposite and is likely to argue that employee was volunteering during the course of his employment.

In practice, and given the murkiness of liability in this situation, the victim might hedge their bets and sue both but more likely than not, they will go after the more solvent defendant (i.e., the employer). Therefore, companies should assess their workplace policies and carefully consider how they are implemented to protect their business and reputation. Furthermore, an employer sponsor should perhaps negotiate a clear position with the charity when it enters into any sponsorship agreement/arrangement to protect its position.

If you are thinking about implementing a volunteering policy and need advice in drafting it, SMB are happy to help. Please contact Joe Hennessy at joe.hennessy@smb.london