directors counsel

Without doubt, the worst nightmare for any director of a non-government organisation (NGO) working with vulnerable people is that someone under their organisation’s care is abused by one of its employees. The recently announced Royal Commission into Aged Care Quality and Safety will likely bring community focus back to the accountability of the thousands of NGOs now contracted or funded by governments to provide human services, including aged care, disability support services, child care, and family and community services.

After three decades of the “marketisation” of human services by successive governments, NGOs now do the bulk of the human services work in Australia. These NGOs include for-profit and not-for-profit (NFP) entities that take a variety of legal forms, from large listed entities and privately held corporate groups, to companies limited by guarantee, incorporated associations and Indigenous corporations. Many of the NFP entities are registered with the Australian Charities and Not-for-profits Commission (ACNC). All operate under service accreditation or contracting frameworks with government, intended to safeguard the people entitled to access the services and the billions expended by taxpayers across the system.

This creates a complex web of accountability, compounded by the fact that whether any entity is liable for an individual employee’s unauthorised and unlawful acts has always been a difficult question of law. Legal principles of vicarious liability determine whether an NGO should be liable, even if the entity is not itself at fault. This is separate from the question of whether the NGO’s own acts or omissions caused or contributed to the harm, for example through poor screening or training of employees, or inadequate supervision.

In 2016, the High Court faced the difficult question in a case involving the abuse of a student by a boarding school housemaster in Prince Alfred College Inc v ADC (2016) 258 CLR 134. In this case, the plurality said that the “relevant approach” in deciding whether the employer is vicariously liable for the employee’s act is: “to consider any special role that the employer has assigned to the employee and the position in which the employee is thereby placed vis-à-vis the victim. In determining whether the apparent performance of such a role may be said to give the “occasion” for the wrongful act, particular features may be taken into account. They include authority, power, trust, control and the ability to achieve intimacy with the victim. The latter feature may be especially important. Where, in such circumstances, the employee takes advantage of his or her position with respect to the victim, that may suffice to determine that the wrongful act should be regarded as committed in the course or scope of employment and as such render the employer vicariously liable”.

The provision of human services often involves employees of NGOs — in both institutional and non-institutional settings — being put in a position where they have “authority, power, trust, control and the ability to achieve intimacy with the victim”. Several recommendations made by the recent Royal Commission into Institutional Responses to Child Sexual Abuse (2013–15) related to NGOs’ civil liability for deliberate abuse by employees and others, including volunteers. These included changing the law to include a non-delegable duty of care on certain institutions, and to reverse the onus of proof to impose liability for child sexual abuse on the institution unless it can prove it took reasonable steps to prevent it. Some states and territories are already acting on these recommendations.

NGOs, and the individuals who serve on their governing boards and committees, accept a heavy burden when contracting with government to provide human services to vulnerable people. Given the difficult legal position, the basis on which NGOs should be legally accountable when employees commit offences against the people they are charged to protect will likely be an important part of the upcoming aged care Royal Commission’s deliberations.