National Minimum Wage

[icde]

Just a reminder that the national minimum wage rate goes up from 1st October 2003. The adult rate increases from £4.20 to £4.50 (£5.15 for adult agricultural workers) and to £3.60 for 18 to 21 year olds. Employers need to think carefully about this if (for example) you employ commission-only sales people. If they have a bad month you will probably still have to pay them the NMW.

When Is The Employer Liable For the Acts Of The Employee?

Employers are liable for the acts of their employees done 'in the ordinary course of employment'.

In the Dubai Aluminium Co Ltd v Salaam 2003 the House of Lords held that liability depends on whether the employee is authorised to do acts of the kind in question. It is not dependent upon the employee's authority to do the particular act which turns out to be wrong.

Deliberate and dishonest conduct committed by an employee for his sole benefit can make the employer liable. It all depends apparently 'on the closeness of the connection between the duties which, in broad terms, the employee was engaged to perform and his wrongdoing.' Plenty of room for dispute there then.

Applying these principles; a nightclub owner was liable when the doorman he employed went home, got himself a knife, then attacked a customer outside the club. The doorman was employed to keep order and had been encouraged to perform his duties in an aggressive and intimidatory manner (Mattis v Pollock CA 2003).

[Business Brian]

Thanks for the articles - and welcome to business-talk, icde.

[altyfc]

"if (for example) you employ commission-only sales people. If they have a bad month you will probably still have to pay them the NMW."  
I find the best solution to this is to let them be self-employed in the first instance...
 
Aaron

[Suzanne]

Commission-only is almost always self-employment. Probably why.

[Business Brian]

I have to admit to disliking commission-only services. It's like the parent company has no faith in the ability to sell its own products/services. Perhaps that's just my cynical consumer position. On the other hand, it's a position of least risk for the parent company - at least, in paper terms. I'm not convinced that commission-only by itself is necessarily a good strategy when other things are taken into consideration. I'm thinking of high-staff turnover, and the lack of staff support, for starters. Commission-only seems to be for those between jobs, rather than a very real and reasonable opportunity for a career. Plus, in the UK, note the after-effects of mis-selling in the financial products sector - endowments for a start.

[altyfc]

When I employed someone on this basis, it wasn't because I had little faith in the product/service, it was because I wasn't convinced in his ability to sell it.  His CV was great, though, and he said all the right things, so I thought that working on this basis I had nothing to lose (bar the cost of a few phone calls, since he worked from our office).  4 days later, he didn't deliver and, because he wasn't earning, he decided to call it a day.  The product does sell - it's just he couldn't sell it.
 
Aaron

[Business Brian]

Very good point. I guess my outlook is a little soured by a little experience selling insurance and pension plans for a certain company of certain practices. Let's just say that most of their customers will be suffering from endowment shortfalls and savings plans that will not mature as promised.