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Employment Law in the UK - Case Study Example

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Summary
"Employment Law in the UK" paper critically evaluates the statement that "Employers have numerous legal means of ensuring that their employees do not disclose confidential information about their business either during the employment relationship or after it has ended"…
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Employment Law in the UK
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Extract of sample "Employment Law in the UK"

1. It seems that whenever the ECJ scrutinises the provisions of the Equal Pay Act 1970, the Act is found wanting. Critically evaluate the above ment. In addition to the case law the codes of practice are also important in Modern employment legislation, which do not have a directly binding legal effect. Nevertheless, the codes of practice issued by the Equal Opportunities Commission or the EOC under the Sex Discrimination Act or the SDA1 are admissible as evidence in any proceedings in an employment tribunal or the ET under the SDA or the Equal Pay Act 1970. The EOC has issued two codes of practice, the first issued in 1985, is the Code of Practice for the Elimination of Discrimination on the Grounds of Sex and Marriage and the Promotion of Equality of Opportunity in Employment. Its objectives are elimination of discrimination in employment; giving guidance in respect of the steps employers have to take to ensure that their employees do not act contrary to the SDA and to promote equality of opportunity between men and women in employment. Since, the European law prevails over the domestic law, the domestic courts and tribunals have to apply relevant principles of the European law, which in this context refers to the EC Treaty and directives2. Sometimes, a court or tribunal directly applies the European law and sometimes, where there seems to be a conflict between domestic and European law, the European Court of Justice or the ECJ is asked to decide on the correct interpretation of the law. The ECJ's objective is to ensure the uniform interpretation and effective application of European law. In case of a conflict between domestic legislation and European law, an important consideration is whether the law concerned has direct effect in the UK. Article 141 of the EC Treaty3 has direct effect between private citizens or the horizontal effect and between private citizens and the state or the vertical effect. As per the provisions of the European Communities Act 1972, the European Community law forms part of UK domestic law. The foundation of EC law is the Treaty of Rome as amended and consolidated by the Treaty of Amsterdam4. Article 1415 of this Treaty specifies that men and women should receive equal pay for equal work. Since, the Equal Pay Act with its limited provisions has dismally failed to implement Article 141 and in this respect the EC Treaty has proved invaluable. In respect of appellant claims, Section 2(4) of the 1970 Act is relevant and in order to be admissible in an employment tribunal, these claims have to be filed within the statutory time limit. In such cases the employment tribunal is empowered to grant a successful applicant the right to retrospective access to the scheme, subject to the payment of appropriate contributions, wherever the periods of employment were not earlier than the 8th of April 1976. The significance of this date is that from this date direct effect was given to the judgment of the European Court of Justice in Defrenne v Sabena6 and in this case the court held that article 119 of the EC Treaty7 provided for equal treatment in the right to join an occupational pension scheme. In Alabaster -v- Barclays Bank Plc8 Mrs. Alabaster pleaded that her employer's failure to incorporate her pay rise into her SMP was contrary to the Equal Pay Act 1970 and Article 141 of the EC Treaty. The ECJ ruled in her favour and held that there was a breach of EU law, resulting in the UK Government amending the SMP rules. The Employment Appeal Tribunal or EAT has ruled that the Equal Pay Act 1970 is not infringed by a pay system wherein employees with more service and experience were paid more than those with lesser service and experience even though most of the latter are female and most of the former are male. The argument that the ECJ decision in Nimz v Frie und Hansestadt Hamburg9 is not good law because of Handels- og Kontorfunktionrernes Forbund I Danmark v Dansk Arbejdsgiverforening10, is untenable, because the first case was concerned with part time employees whereas the second with full time employees and in this manner they were not directly comparable. In this manner it is evident that whenever the European Court of Justice intervenes in cases involving the Equal Pay Act it finds several lacunae in it, which it makes all attempts to rectify. 2. Employers have numerous legal means of ensuring that their employees do not disclose confidential information about their business either during the employment relationship or after it has ended. Critically evaluate the above statement. Confidential information is a vital and valuable asset of a business and often a competitive edge in the marketplace depends on the possession of information which the competitors do not have. Unless such information can be classified as intellectual property rights or IPR, the law will not automatically prevent others from taking or using such information. Confidential information is stored in many ways, e.g. filing cabinets, PC hard drives and in peoples' minds. It is imperative to implement security measures appropriate to the method of storage and relative value of the information being stored. Confidential information is usually disclosed in business dealings with clients, while employees carry out work, if third party contractors are hired and while transmitting business information to suppliers. The various means by which such disclosures take place are in direct conversations, in telephonic conversations, by fax, by email or over the internet. One of the methods of maintaining the secrecy of information is by the imposition of specific confidentiality obligations on its intended recipients. These obligations can be set out in confidentiality letters/agreements and notices (on documents, faxes, emails, etc.). These obligations have to unambiguous and suitable to the information concerned and the purposes for which they are to be used. With respect to particularly valuable information, express prior agreement to such obligations by the intended recipient is essential. Employees are duty bound not to knowingly or wrongfully disclose their employer's secret information and in general, such obligations are expressly incorporated in the employment contracts. Whenever employees leave a business its protection is reduced. The courts in general afford protection to the more important trade secrets, while displaying reluctance to restrict ex-employees from using less critical information. To increase the probability of restricting the use of confidential information by ex-employees, a business has to prove that, the ex-employees were aware of the fact that this information was highly confidential and that suitable measures were taken to protect the information11. In Spycatcher12, it was held that if confidential information is purposely sent by e-mail to a competitor by an employee, the status of the recipient will be dependent upon whether the recipient is aware of the fact that the information received constituted a breach of confidence.In R v. Dept of Health Ex parte Source Informatics Ltd13, it had to be decided whether, a company which collected information about doctor's prescribing habits could sell that information to pharmaceutical companies to help them market their products.This information was sold in a form which made it impossible to identify the individual patients. The Court therefore held that there was no unauthorised use of confidential information. In Lilly Icos Limited v. Pfizer Limited14, protection for the confidentiality of a commercially sensitive document containing information about advertising expenditure was sought.The parties to the dispute had entered into a confidentiality agreement but it only lasted for the duration of the trial. In AT Poeton (Gloucester Plating) Limited and ANOR v Michael Ikem Horton15, a company specializing in electroplating, sought to restrain an ex-employee from using allegedly confidential information in setting up a competing business. The Court, while dismissing the plea observed that the company had not obtained any restrictive covenant or patent and hence it was unseemly for the court to be asked to impose such a restraint.In ABK Ltd v. John Foxwell and Others16 there was a business plan based on a training program and as the constituent parts of the information being alleged to be a trade secret were all available on the internet was sufficient to prevent the information being categorized as a trade secret. In Mars UK Limited vs. Techknowledge Limited17, Mars the leading designer and manufacturer of coin discriminators, which were utilized to determine the authenticity and denomination of coins fed into a vending machine. Techknowledge admitted that it had successfully reverse engineered one of Mars' most sophisticated discriminators. Mars alleged that Techknowledge's activities by way of reverse engineering amounted to a breach of confidence. The Court rejected Mars' claims and held that the owner of the machine had a full right of ownership, which included the entitlement to "dismantle the machine to find out how it works and tell anyone it pleases". The above discussion indicates and elaborates on the various legal means at the disposal of Employers, to ensure that their employees maintain the confidentiality of information relating to their business either during the employment relationship or after it has ended. 3. Sarah manages a pub and after the pub had closed, she interrupted a fight between Tracy and Wendy, two bar staff. Sarah saw Tracy punch Wendy in the stomach. Wendy then violently pushed Tracy, Sarah suspended both the employees immediately. She checked the money taken against the till receipts and discovered the till was 10 short. Sarah interviewed both employees as part of an investigation. Tracy denied that she had stolen money, Tracy accepted that she punched Wendy, but said she was provoked by Wendy. Wendy said that she saw Tracy take a 10 note from the till. She said she pushed Tracy in self defence. Sarah checked the pub's CCTV recordings and she could identify Tracy taking a note from the till. She also checked the personnel records and discovered that both Wendy and Tracy have been employed for over one year and that Tracy was on a final written warning. Sarah cannot condone fighting in the pub and is considering dismissing both employees. Advise Sarah of her legal obligation and how best to discharge them in order to avoid successful claims being brought against the pub. The Employment Rights Act18 and the Trade Union and Labour Relations Act19 apply only to employees, where "an employee means an individual who has entered into or works under a contract of employment"20, and a contract of employment means a contract of service or apprenticeship, whether express or implied, and if it is express whether oral or in writing. In accordance with the employment status, it can be determined, whether protection from unfair dismissal and eligibility for redundancy payment, leave pay, etc., are to be granted. The various statutory provisions, in this regard are contained in the ERA, which states that "contract of employment means a contract of services or apprenticeship, whether expressed or implied and (if it is express) whether oral or in writing21." In this connection the Trade Union Act, states that "employment means employment under a contract of employment, and related expressions shall be construed accordingly22." Reason or reasons for dismissal of an employee have to be specified by an employer and these reasons have to be those available in the ERA, must be contained within the Employment Rights Act, namely, capability or qualifications, conduct, redundancy or where to continue to employ would be in contravention of an enactment23. If this is not the case then the reason for dismissal has to be for "some other substantial reason of a kind such as to justify the dismissal"24. In Perkin v St Georges Healthcare NHS Trust25, the Court of Appeal had to decide whether a manager's personality and his inability to work constructively with colleagues, amounted to conduct, capability or SOSR. The Court's findings were that Mr. Perkin was almost impossible to work with. The Court of Appeal held that dismissal because of personality clashes with colleagues and approach to them amounted to SOSR, entitling the employer to dismiss without prior warning. For a valid dismissal of an employee by an employer, the relevant legislation has specified five reasons, one inappropriate conduct, two, the employee is incompetent or unqualified for the job, three, the employer has no work or insufficient work for the employee to do, four, there is a statutory requirement, which prevents the continuance of employment and finally there is some other important reason26. The employer has to implement an appropriate disciplinary procedure. Misconduct offences are of two types, first, those that justify instant dismissal without notice or payment in lieu the so called gross misconduct cases and secondly, offences which lead to dismissal with notice if repeated. The following procedure should be adopted in cases of minor misconduct: Oral Warning, First Written Warning, Final Written Warning, and Dismissal. Gross misconduct includes theft, physical assault, breach of duty of confidentiality, etc. A formal oral warning has to be given for minor infringements. This warning should give the reasons for the warning, steps to improve the situation and information regarding future disciplinary action if the infringement continues or improvements are not forthcoming. A record of such a warning has to be maintained. If a minor infringement recurs or continues or a major infringement occurs, then a formal written warning has to be issued. It should contain the details of the complaint, as well as what action is necessary to remedy the situation. It should also give the time within which the change has to take place and it should also give details of the right of appeal. The employee should be informed very clearly that failure to improve the situation or behaviour will result in a final written warning and further disciplinary action. A copy of the formal written warning has to be maintained for a year. If an infringement continues or a serious and damaging infringement takes place, then a final written warning has to be issued. It should contain the details of the complaint and should specify the necessary actions and timescale for change. It should give details of the right for appeal, and also state that if the correct action is not taken; the result could be demotion, disciplinary suspension without pay, disciplinary transfer, or dismissal. A copy of the final written warning has to be maintained on record for a satisfactory period of time. The first task to be performed is to determine whether Tracy and Wendy are employees or workers, because The Employment Rights Act 1996 and the Trade Union and Labour Relations Act27 apply only to employees. In general, for determining the status of employment, the following tests are prescribed by the provisions of the Employment Relations Act. They are the control test, provision of equipment, Financial Risk, Basis of Payment, Opportunity to profit from Sound Management, Part and Parcel of the Organization, Right of Dismissal, Employee Benefits, Length of Engagement and Intention. These are illustrated in Casidy v. Ministry of Health and Yewens v Noakes.28 From the above it can be deduced that both Wendy and Tracy are employees. In order for an employer to successfully justify a dismissal, it must be shown that there was substantive justification, i.e. good reason and was carried out in a procedurally fair way. Tracy has already been issued a final warning notice, she punched Wendy in the stomach and the CCTV recording shows her removing a currency note. Therefore, her conduct is tantamount to major misconduct and as per the procedure for dealing with it she can be dismissed. In respect of Wendy, she states that she did not fight with Tracy but only pushed Tracy in self defence. In case Sarah wants to dismiss her, she can do so only on the grounds of indulging in violence. Wendy is vehemently insisting that she pushed Tracy, who was punching her in the stomach, in self defence. If even then, Sarah dismisses her, then the courses open to her are that since, she had been working for Sarah for more than a year, she can approach the employment tribunal. She will have to submit form ET1(E/W) to the tribunal as soon as Sarah gives her the notice of dismissal and should normally be submitted within three months of the dismissal date. Subsequently, the tribunal will send Sarah form ET3 or Notice of appearance, wherein she will have to indicate whether she wants to contest the case or not. After the hearing is over the tribunal will give its decision, which can be reviewed by Sarah as well as Wendy. Since, Wendy's dismissal will be unfair, the tribunal will order Sarah to reinstate her in the same job, re - engage her in a different job, or pay a sum of money as compensation. Bibliography. 1. Addison, John. T, Grossot, Jean - Luc, Teixeira, Pauline. 2000. The Effect of Dismissals Protection on Employment: More on a Vexed Theme. Southern Economic Journal. Volume: 67. Issue: 1. Page Number: 105. 2. Brown, William. Wadhwani Sushil. 1990. The Economic Effects of Industrial Relations Legislation since 1979. National Institute Economic Review. Issue: 131.Page Number: 57. 3. Bacon, Harold. J, Highet Keith, Kahale III George, Lord, Herbert M, Semmelman Jacques, Witten, Samuel M. 1993. Certain Phosphate Lands in Nauru. The American Journal of International Law. Volume: 87. Issue: 2. Page Number: 282. 4.Brown, William. Deakin, Simon. Ryan Paul. 1997. The Effects of British Industrial RelationsLegislation 1979-97. National Institute Economic Review. Issue: 161. Page Number: 69. 5. Fredman Sandra. (1997). Women and the Law. Oxford University Press. Oxford. Read More
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