Home » Who Is Liable for Property Damage Caused by Employees?

In Australia, the responsibility for workplace damage depends on the individual situation. Employers are usually held responsible for damage caused by their employees during the course of their employment.

However, in some situations, employees may be held responsible directly. This article explains when and how different parties can be held accountable for workplace damage.

What is Property Damage in the Workplace?

Workplace property damage encompasses harm to physical assets belonging to the employer, clients, or co-workers. This includes damage to company property such as vehicles, machinery, and office supplies, as well as client property entrusted to employees.

Damage to the workplace premises itself, including the building and its contents, also falls under this category. Whether accidental, negligent, or intentional, the cause of the damage is pivotal in determining liability for repairs or replacements.

Understanding Vicarious Liability

Vicarious liability is a crucial legal concept that holds employers accountable for their employees’ harmful actions or negligence, irrespective of direct fault. Employers must exercise duty of care to protect workers from harm caused by fellow employees, encompassing physical injury, discrimination, or harassment.

While employers are more likely to be liable for employees than independent contractors, certain defences exist, such as demonstrating reasonable preventative measures or proving actions occurred outside the scope of employment.

When Employees May Be Liable

Employees can be held personally liable for damage or mistakes if:

  • Serious or wilful misconduct occurs: Intentional violation of workplace policies leading to damage.
  • Gross negligence leads to substantial damage: Failing to exercise even basic care, resulting in significant consequences. Examples include causing a major accident due to reckless equipment operation or ignoring obvious safety hazards leading to property damage.
  • The employment contract is breached: Violation of specific clauses responsible regarding equipment, conduct, or confidentiality.
  • Professional Negligence: Providing improper or misleading advice or services causing harm or financial loss.
  • Confidential Information/IP Misuse: Unauthorised use or disclosure of company secrets or intellectual property.
  • Workplace Safety Violations: Reckless behaviour leading to injury or damage.

The Importance of Workplace Policies

Employers should have clear policies that abide by relevant legislation regarding the use of company property, safe practices, reporting hazards, and consequences for violations.

Legislation such as the Anti-Discrimination Act 1991 and the Work Health and Safety Act 2011 in Queensland address employer liability for discrimination, harassment, and worker safety.

Protecting Yourself

  • Employees: Review your employment contract carefully, potentially with a lawyer, to understand your liability protections. Adhere strictly to workplace policies.
  • Employers: Implement thorough training programs and safety guidelines. Consider public liability insurance.

Employee Mistakes

If an employee makes a mistake, then employers must determine the extent of their liability. The employer may need to respond to claims, or the employee might be personally liable. Joint liability is also possible.


What to Do If Damage Occurs

In the event of damage, it is crucial to report to a supervisor as soon as possible. Transparent and timely reporting is not only essential in controlling the damage but also demonstrates honesty and responsibility and ensure appropriate measures are taken to rectify the situation.


Contact Greenhalgh Pickard for advice today!

Understanding how liability works in the workplace is essential for both employers and employees in Australia. By following best practices, employers can minimise the risk of being held liable for employee actions. This includes providing clear policies, proper training, and having strong safety protocols in place. Employees should familiarise themselves with their contracts and workplace policies, act professionally, and prioritise safety. If you are unsure about your rights or responsibilities, contact Greenhalgh Pickard today for further advice on employment law.




The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.