Employer's liability for Employee's acts
Written by:
Hein Kernkamp
Employer's liability
The employer's liability for employee's acts is laid down in Article 6: 170 DCC. This article makes the employer liable for errors of his subordinate. The employer is therefore liable regardless of whether the employer has made a mistake himself and also if the subordinate acted contrary to an instruction. A requirement is that the damage must have been caused by an error of the subordinate. An error is an attributable tort. The subordinate must therefore also be directly liable on the basis of tort law. If this is not the case, the employer is also not liable on the grounds of Article 6: 170 DCC.
The law formulates it as follows. The employer is liable:
- if the chance of the error is increased by the order to perform this task; and
- the person in whose service he was employed had control over the conduct in which the error was committed under their respective legal relationship.
Employer's liability for borrowing and lending
In loan situations where a company contracts for the services of an employee, the question may be raised which parties can be held liable under Article 6: 170 of the Dutch Civil Code, liability for subordinates. Is that only the formal employer (the lender) or also the material employer (the hirer) and possibly even an intermediary?
On July 14, 2017, the Netherlands Supreme Court ruled that in principle the existence of control by the party held liable is sufficient for the application of Art. 6: 170 (1) DCC required subordination. This means that every employer with control, which will often be both the hirer and the lender and possibly even the intermediary. The party that suffers damage does not have to find out who entered into what agreement relating to the hire. So several employers may be held liable, if they all had a certain form of control.
Examples of employer liability
A mistake made by a teacher causing burns to a child renders the school employing the teacher liable (Netherlands Supreme Court 28 May 1999, NJ 1999/564 (Municipality Losser / Johanna Kruidhof)). Employed doctors and senior government officials are also covered by the subordination description and the employer is therefore liable for mistakes made.
Extra requirement for employer in the private sphere
Article 6: 170 (2) of the Dutch Civil Code gives employers in the private sphere a slightly less extensive liability. The employer in the private sphere is only liable if the subordinate acted in fulfilling the task assigned to him when committing the error. So there is an extra requirement here.
Mutual recourse
As described above, both the employer and the employee are always liable and can therefore both be held liable for the damage. Article 6: 170 paragraph 3 of the Dutch Civil Code provides the recourse rule. The subordinate does not contribute to the compensation in the mutual relationship with the employer, unless the damage is the result of his intent or deliberate recklessness. However, the circumstances of the case and the nature of their relationship must also be taken into account. The latter will not be dealt with quickly, so that the employer bears a liability risk here. That's not too bad when it's considered that most employers have company liability insurance, which covers these types of claims.
Contractual limitation of liability
An employer can contractually limit or exclude his liability, which often also occurs in general terms and conditions or agreements. If the employer has excluded his liability, the person who suffered damage could still obtain his right by holding the employee liable, who after all committed an unlawful act. This so-called horse jump is blocked by Article 6: 257 BW.
Horse Jump Block
If a party to an agreement to repudiate liability for the conduct of a subordinate under the agreement derives a defense against its other party, then the subordinate can also do so under article 6: 257 of the Dutch Civil Code, as if he were party to the agreement. This prevents the exclusion of liability from being reversed through a detour.
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