Can An Employee Be Personally Liable for Workplace Mistakes

By Paul McKaysmith

The High Court has found that employees can be personally liable for misleading and deceptive conduct undertaken in the course of their employment.

The decision in Houghton v Arms [2006]HCA 59;BC200610333 was based on an appeal by two employees who claimed that s9 of the Victorian Fair Trading Act 1999 did not apply to them as the word "person" did not apply to them as employees,. They contended that the offence for which the lower courts had found them guilty of engaging in the misleading and deceptive conduct was not engaged in "for themselves" acting in trade or commerce. The High Court said the offences were made in that context and even though they were undertaken in the course of employment they were persobnally liable as the reference to "person" in the At was not limited to the principal of the business.

Fair trading laws operate in each jurisdiction in Australia so the decision has broad implications and could effect many employees.

(Employment Law Bulletin Vol. 13, no. 5: from LexisNexis Butterworths)