In the courts

Vicarious liability

Employers can sometimes be found liable for the acts of their employees, even when the employee acts in a way that is explicitly prohibited by the employer. The harsh rules of vicarious liability are there to ensure that innocent victims have an effective remedy for their mistreatment. In recent years the courts have extended the principles to cover some categories of non-employee, such as an occupational health doctor who sexually assaulted candidates for employment with a major bank, and a number of religious officials who abused children in their care. The High Court has looked at these rules afresh in the context of an office party, at which one guest picked up, and then dropped, another guest whilst drunk, causing serious injury. The drunken guest was not an employee, but worked closely with the host organisation. Seemingly because of that more remote relationship, the court declined to impose liability on the victim's employer.

In an interesting parallel development, the Supreme Court has granted Morrisons permission to appeal in a data breach case. A member of Morrisons' IT department, with a grudge against his employer, deliberately downloaded large volumes of employee data and posted it online, taking a number of steps to try to conceal his guilt. Despite the acts being in obvious contravention of Morrisons' policies and procedures, the High Court and Court of Appeal imposed vicarious liability. The Supreme Court's approach to this will be closely watched by employment and data protection experts alike.

Discrimination and whistleblowing awards

Many readers will be familiar with the two key differences between awards for successful unfair dismissal claims on the one hand, and for discrimination and whistlebowing claims on the other: (i) there is a statutory cap for unfair dismissal awards; and (ii) injury to feelings can only be awarded in discrimination and whistleblowing cases. Injury to feelings awards are typically made to reflect the seriousness of the misconduct in question, using three broad bands. Only in "the most exceptional case" should an award exceed the top band. The president of the tribunals has recently increased the amounts in each band to reflect inflation - so the new bands are as follows.

  • Lower band (less serious cases, one-offs or isolated occurrences): £900 - £8,800
  • Middle band (serious cases, but which do not merit an award in the highest band): £8,800 - £26,300
  • Top band (most serious cases, e.g. lengthy campaigns of discriminatory harassment): £26,300 - £44,000

In the news

Executive pay

The UK has relatively high levels of executive pay, inevitably drawing attention from pressure groups, institutional investors and, intermittently, parliamentarians. The Department for Business and Energy Industrial Strategy (BEIS) Select Committee has recently published a report setting out a number of proposals which, in the Committee's view, would strengthen the voices of employees and shareholders, better align pay with long-term corporate performance and drive down the levels of executive pay in general. The report is focused on large listed companies, but some ideas would also affect larger private companies. The most eye-catching proposals are:

  • a new stronger regulator to replace the Financial Reporting Council with a remit to exert downward pressure on pay, monitor compliance, consider whether additional pay disclosure ought to be mandated and draft rules to ensure bonuses are for exceptional performance rather than a routine part of pay;
  • companies should be required to appoint at least one employee representative to their remuneration committees; and
  • all large companies (over 250 employees) should be required to publish the pay ratio of the CEO compared to the lowest quartile. The 250-employee threshold would mirror the gender pay reporting regime.

Some of those proposals are very interesting. The idea of giving employees a greater say in executive remuneration was first raised by Theresa May in 2016, in one of her first speeches as Prime Minister - readers may be interested by our note examining her proposals, particularly the comparison with the German model of employee engagement.