Parent companies may have a duty of care to employees of subsidiaries

The Court of Appeal has recently held in the case of Chandler v Cape Plc [2012] EWCA Civ 525 that parent companies are capable of owing a duty of care to the employees of their subsidiaries.  Where a subsidiary incurs liability to an employee, it is that subsidiary (rather than the parent company) that would ordinarily have to defend the employee’s claim.  However, where the parent company has sufficient understanding of the risks caused by the practices of the subsidiary, the parent may be said to have assumed responsibility for the employee’s health and safety.  Under such circumstances, an employee may be successful in a claim against the parent company where it is unable to bring an action against the subsidiary.

This decision makes it all the more sensible to ensure that, where possible, policies and practices are standardised across the whole of a group of companies.  The use of a group-wide office manual can help to achieve this effect.  At SRB, we can advise on the most effective ways of standardising policies across your group.  For further information, please contact John Andrews on 020 891 6141.