It can extend beyond obvious cases like sexual harassment to include behaviours such as physical assault, discriminatory acts, or even something as seemingly minor as smoking in prohibited areas—provided these occur in ‘close connection’ with work.
The decision in Tse Chi Wai v. Chan Kwan Ho and Others [2025] HKCU 3531 confirms the close connection test and the two-stage test for vicarious liability, highlighting the importance of clear safety policies, regular training and active monitoring to mitigate risks and reduce legal exposure.
The facts
The case arose from a workplace quarrel at a warehouse. The Plaintiff, Mr Tse Chi Wai, was employed by the 2nd Defendant, Juhang International Holding Limited, as a warehouse supervisor. The 1st Defendant, Mr Chan Kwan Ho, was also employed by the 2nd Defendant as a senior supervisor who supervised the Plaintiff. The 3rd Defendant, Lianhong International Holding Limited, was a company affiliated with the 2nd Defendant.
On 23 February 2017, the 1st Defendant had a dispute with the Plaintiff and another subordinate over their work attitude on the loading platform. The quarrel soon escalated into a fight. During the fight, the Plaintiff hit the 1st Defendant in the face. The 1st Defendant then punched the Plaintiff in the stomach whilst he was standing on the edge of the loading platform, causing him to fall off it (“the Accident”). As a result of the Accident, the Plaintiff sustained injuries, including fractures to his right wrist.
In 2020, the Plaintiff commenced a High Court action against the 1st, 2nd, and 3rd Defendants for damages for the personal injuries he suffered as a result of the Accident. The claims against the 2nd and 3rd Defendants were based on (a) negligence, (b) breach of the implied terms of the contract of employment, and (c) their vicarious liability for the damages caused by the 1st Defendant’s assault.
At trial, a key issue was whether the 2nd or 3rd Defendants could be held vicariously liable for the 1st Defendant’s assault on the Plaintiff.
The Court’s ruling and the tests applied to establish vicarious liability
To determine vicarious liability, the Court first had to decide who employed the Plaintiff.
On this issue, the Court adopted a holistic approach as in Poon Chau Nam v Yim Siu Cheung t/a Yat Cheung Airconditioning & Electric Co (2007) 10 HKCFAR 156, weighing all indicia of employment against the contemporaneous evidence. Having considered evidence such as the parties to the Plaintiff’s employment contract, the Court held that the 2nd Defendant was the Plaintiff’s employer. As the 1st Defendant was the Plaintiff’s supervisor, he was also an employee of the 2nd Defendant.
In determining vicarious liability, the court applied the well-established two-stage analysis:
- Stage 1 concerns the relationship between the defendant and the tortfeasor or person who commits a wrongful act causing injury. The question is whether the relationship is one of employment or akin to employment; and
- Stage 2, the “close connection test”, asks whether the wrongful conduct was so closely connected with acts that the tortfeasor was authorised to do that it can fairly and properly be regarded as done by the tortfeasor while acting in the course of the tortfeasor’s employment.
The Court emphasised that the close connection test is fact-sensitive, and the wrongful act must involve a risk sufficiently inherent in or characteristic of the employer’s business such that it is fair and just to impose liability.
In the present case:
- The 1st Defendant was tasked with supervising the Plaintiff and his work performance.
- The 1st Defendant was acting within the scope of his duties and engaged in managing the Plaintiff’s work performance and giving instructions at the time of the quarrel.
- The 1st Defendant’s supervision of the Plaintiff was part of the 2nd Defendant’s business activity, and the 1st Defendant was acting in the company’s interest in doing so.
- The 2nd Defendant, by tasking the 1st Defendant with supervisory responsibilities, created the risk of the tort committed by him.
Having considered the above, the Court held that the 1st Defendant’s act of assaulting the Plaintiff, although unauthorised and wrongful, was so closely connected with his employment that it was fair to make the 2nd Defendant vicariously liable.
The implications for employers
As seen from the above, employers can be held vicariously liable for their employees’ wrongful conduct when the wrongdoing is closely connected with what they are authorised to do while acting in the course of the employment.
To minimise the risk of improper conduct in the workplace, employers should develop and implement clear and comprehensive workplace policies that set out the standards of behaviour expected from all employees. These policies should be communicated to all employees. In addition, employers should provide regular training sessions to reinforce these standards, with particular emphasis on conflict management, respectful communication, and procedures for reporting and addressing incidents of misconduct. By taking these proactive steps, employers not only foster a positive and respectful working environment but also reduce the likelihood of being held vicariously liable for the wrongful acts of their employees.
