UK Employment Hub 

In Bellman v Northampton Recruitment Limited (NRL), the Court of Appeal decided that NRL was liable for its Managing Director drunkenly assaulting another employee at an “impromptu” drinks event after a work Christmas party. There was a sufficient connection between the Managing Director’s employment and the assault. This is an important case for employers to be aware of in the run-up to the Christmas party season.

Facts

Mr Bellman was a Sales Manager at NRL. After the NRL Christmas party, he and a number of colleagues went to a hotel bar for an “impromptu” drink. At the hotel, the employees discussed a work matter. The Managing Director lost his temper and told the employees that it was he who owned the company and made the decisions. Mr Bellman verbally challenged the Managing Director, who punched him twice. As a result of this, Mr Bellman suffered severe brain damage.

Mr Bellman sued NRL for damages, on the basis that NRL was vicariously liable for the assault.

Decision

The High Court dismissed Mr Bellman’s claim, holding that the Managing Director was not acting in the course of his employment when he assaulted Mr Bellman. The drinks were impromptu and each employee had a personal choice as to whether or not to attend. The fact that work topics were discussed at the drinks did not mean that there was a sufficient connection between the Managing Director’s employment and his wrongful conduct in assaulting Mr Bellman.

The Court of Appeal overruled the High Court’s decision, finding that there was a sufficient connection. The Court of Appeal noted that it was important to look at the level of authority of the Managing Director – in this case it was very wide, as he had no set working hours, he controlled the way he worked and he made all management decisions. In the Court of Appeal’s view, at the hotel he had exerted his authority over the employees when telling them that he made the decisions in relation to NRL.

Comment

The outcome of this case turned on its (very specific) facts. The “close connection” test for vicarious liability gives the courts a broad discretion and employers should be aware that they will not always be vicariously liable for the conduct of employees in arguments outside the workplace that relate to work matters. The key differentiating factor in this instance was that the Managing Director had a significant amount of management responsibility and authority which he exerted over the employees at the after party.

As we approach the Christmas party period, employers should remind their employees (and in particular, senior management) about behaving appropriately. This can include communicating with employees about what is expected of them at office parties as well as the policy for coming into work the following day. This will assist in reducing the potential risks that employers face in the festive season.

As UK companies with more than 250 employees are now required to publish gender pay gap information, the government has turned its attention to the ethnicity pay gap.

On 11 October 2018, the government launched a consultation seeking views on ethnicity pay reporting by employers to inform future government policy. The consultation, which closes on 11 January 2019, asks what ethnicity pay information should be reported by employers to facilitate meaningful action, without unduly burdening businesses.

The consultation focuses on what ethnic pay reporting should look like and how it should be introduced. It outlines different approaches to reporting, ranging from the average hourly earnings of different ethnic groups to reporting ethnicity pay information by pay band or quartile. The government is also seeking views on whether any contextual factors, such as gender or age, should form part of the reported information.

Alongside its consultation, the government has also announced a new “Race at Work Charter”. Employers who adopt the charter (which is voluntary) will commit themselves to a set of principles that aim to improve recruitment and progression for employees from ethnic minority backgrounds.

Although ethnic pay gap reporting is currently not mandatory, employers who want to be seen as serious about diversity and equality may want to consider reporting. Hopefully many will have a positive tale to tell, helping them attract top talent from all ethnic backgrounds; those who find that they do have a material ethnic pay gap will be able to take action to tackle it and report their progress in doing so.

Recent research published by the British Medical Journal suggests that senior doctors from black or minority ethnic (‘BME’) backgrounds earn approximately 4.9% (or £5,000) less in mean basic pay than their colleagues from a white ethnic background within the NHS.

The findings of the study also demonstrate that:

• BME doctors feel discriminated against in relation to clinical excellence awards, interviews and promotions which is perhaps supported by the fact that only 7% of senior managers in the NHS are from a BME origin; and
• a high number of BME doctors (when compared to their colleagues from a white ethnic background) work in unpopular specialities within the NHS, such as psychiatry or rehab medicine, and in remote districts.

The Director of Research and Chief Economist at the Nuffield Trust thinktank, John Appleby, has questioned whether the pay gap could be due to consultants working in the NHS from a white ethnic background typically being older and more experienced than their BME colleagues. However the disparity between salaries is too large to go unnoticed and requires further investigation. The BMA chair, Dr. Chaand Nagpaul, has insisted that the government and NHS address this suspected disparity and, in response, the NHS has commissioned its own study and confirmed its intentions to tackle the issue.  It remains to be seen how its will achieve this. In the meantime, an ongoing inquiry into the gender pay gap within the NHS should also help identify the reasons behind the gap and workable solutions for reducing it.

New legislation is expected to be implemented to ban restaurants from keeping tips from their employees. The intention is restaurant owners will not be able to make deductions from tips which are paid by card in order to fund administration costs.

It is reported that High Street chains regularly take up to 10% of tips paid by credit or debit cards from employees. The issue was initially addressed two years ago in an official review led by the then business secretary, Sajid Javid, although nothing concrete had materialised.

The government is now re-addressing the issue, announcing that UK legislation will not only ensure workers get the tips they deserve, but will also give customers reassurance that the tips they leave are for the service they receive.

The announcement of new legislation is a timely reminder to employers of the protections that employees are entitled to during the course of their employment. Employers should adopt a proactive approach and re-evaluate their tipping procedure in order to avoid non-compliance and reputational risks.

For those with an interest in pensions and, in particular, the practicalities of auto-enrolment, this week has brought some interesting suggestions on making the whole thing work a little more smoothly. One of the main stumbling blocks to truly integrated pension saving has been that the current auto-enrolment system treats workplace pensions as just that. They are something put in place by your employer and when you change employers your pension pot can be stranded or at the very least difficult to move from place to place. This is inefficient and means that many employees have small savings pots scattered around multiple employers given the way the employment market works in the real world.

Previous suggestions to deal with this have included variants of ‘pot follows member’ whereby there would be an automatic transfer when an employee changes employment, but this runs into immediate issues around member choice and comparative management charges. Why be forced to move to a scheme with a higher annual management charge or one that doesn’t offer the investment choices you want – plus costs!

The new suggestion would be to make what scheme you use for auto-enrolment an employee rather than employer decision. The employee would pick a personal pension plan (that met basic AE requirements) and the employer’s duties would be to pay into that. When the employee moves – the pension moves.

This could potentially kill two birds with one stone. However, as with most pensions issues, this is unlikely to be top of the government’s agenda and there may well be unanticipated wrinkles in the application of the proposal – for example, how will an individual employee pick a good personal pension scheme without financial advice?

Something to watch for.