Working Life > Employee > Employees Liability

Employees Liability

Definition, Explanation

The issue of employees liability comes up when an employee causes a damage, and the damage is related to the employee's work. Legal regulation of employees liability is § 276 Abs 1 Satz 1 BGB according to which every causer of damage has to answer for mens rea and negligence. The damage may be on the company's assets, the person of the employer, a colleague of the employee or some third party.

Different cases of employees liability are distinguished:

• The damage has been caused by slight negligence, e.g. when products are tossed and thus damaged, or a PC keyboard is wrecked by a spilled drink. Employees liability is impossible in this case. The employer must compensate for the damage in this case
• The damage has resulted from medium/regular negligence, i.e. the necessary care has not been exercised, e.g. when the copying machine is fed with paper having paper-clips or staples on it and is thus damaged. In such cases, the damage compensation payment is divided between the employer and the employee. The ratio of division is determined by the circumstances of the individual case, the amount of the damage, the position of the employee, the degree of hazard in the work, the age, income etc. Factors on the side of the employer taken into account for the ratio are: business risk, degree of accountability for the business organization and the design of working conditions. For the employee, the mentioned criteria result in a certain right of recourse in relation to the employer. The right of recourse will be void, though, when the company goes bankrupt. Then, the employer is fully liable
• The damage has resulted from gross negligence, e.g. from drunken driving, or professional incompetence or fault. The employee must have committed a “subjectively inexcusable” breach of duty, to be fully liable. In this case, the employee is liable, whereas limitation of liability is possible if the damage exceeds a certain multiple of the monthly income (3 to 4 monthly incomes)
• The damage was done on purpose, e.g. deliberate virus-infection of a computer program in order to retaliate for not being advanced and to consciously harm the employer. The employee is liable unlimitedly
• For personal injury that has not been done on purpose, the employee is fully excluded from liability. The damage compensation is paid by statutory accident insurance

The guiding idea for the limitation of liability and the right of recourse of the employee in relation to the employer is to not endanger the employee's economical existence. Also, they restrict possibilities for the employer to put the responsibility on the employees.

The burden of proof is generally carried by the employer. The employer must prove that the employee has caused the damage. If the employer cannot prove this, then the employer will be liable for the damage.

If an employee ignores orders of the employer, this does not automatically mean a mens rea or gross negligence.

Claims made basis for employees liability can be:

• The employment contract
• Legal entitlement

What counts as damage?

For property damage and financial damage:

• Recovery and replacement expenses
• Repair expenses
• Loss in value
• Missed profit
• Reserve and storing expenses
• Expenses for processing of claims
• Trial and attorney expenses
• for cars: loss of use, loss of no-claim bonus

For personal injury:

• Treatment and nursing expenses
• Compensation for pain and suffering

Tips, Checklist

For employers:

• Set up rules of behaviour in employment contracts or in a company agreement, e.g. for the use of email and the web as well as for the use of working material
• Contract a business liability insurance, to secure your business risk
• Give necessary orders
• Make your personnel aware about potential hazards and damages
• Perform necessary controls and surveillance
• Ensure good organization of work
• Provide suitable working equipment and devices and ensure regular checks and maintenance
• Ensure compliance with legal maximum working hours

For employees:

• Never sign an acknowledgement of debt
• Report all occurring malfunctions and made mistakes
• When you have caused a damage, involve a legal adviser
• Your private liability insurance will normally not compensate for occupational damages. Usually, private liability insurance is restricted to non-occupational damages (see general liability conditions in your insurance policy)

For the injured party:

• Claim your damage against the employee and the employer

Last update: 04/07/2010