Employment Law and Plan for Redundancy - Essay Example

?Swarna1 Word count 3003 Order 530816 d 11th May Employment Law Part Advise Tom as to whether or not he may be able to claim unfair dismissal from Unfit. Tom has to analyze the conditions of the contract made between him and Unifit Ltd. Before proceeding for further action. If the contract law is violated due to his dismissal from the job, the claim for unfair dismissal holds more relevant, otherwise, it would be defeated in the court of law. For analyzing this more specifically, one has to ascertain whether Tom enjoys the regular employee status in Unfit Ltd. or not? If it is proven that he is a regular or permanent employee, his right for continuing in the job would be very genuine unless he is indulged in illegal activity or unethical practice at work place. Various tests have to be applied for determining the nature of job performed by Tom. In the contract, it was mentioned that he was not able to avail the sick leave and pension benefits which suggests that he is not a regular employee. Moreover, Tom was assured of at least 20 training sessions which also indicates that his job is more of a contractual in nature. In case of his inability to attend the sessions due to his sickness, there is a clause for substituting him with another personal trainer with the permission of the company. This also indicates the intention of the company to utilize the services of the personal trainers on contractual basis. If one trainer fails, the other one should take care and as long as this process continues, the company will not have to bother about the job of any personal trainer. Hence, in this context, the company has to clarify on which specific grounds, Tom was terminated and it has to explain the reasons for its conclusion on poor job performance. According to the contract law, once the agreement was made, the terms and conditions should be accurately followed and in cases of minor exceptions sufficient justification has to be provided. If it is not based on the proper justification, Tom should file case against Unfit Ltd. For removing him which comes under unfair practice. The case can be filed against the Unfit Ltd. as it violated both English contract law and unfair contract terms act (1977) (Ole Lando et al., 2003 ). The length of service is not in favor of Tom as it is very short i.e. one year and hence his nature of job may not be considered as regular and hence he will not be entitled to pension and other retirement benefits as declared by the company in its regulations. In addition, he was made responsible for his tax payment and insurance payment and he rather agreed to work on self employed basis to get tax benefits which indicates that he is not a regular employee in the company. His working conditions would be completely guided by the contract made between him and the Unfit Ltd. However, it doesn’t give any right to company to remove an employee with out quoting proper and logical reason. In the present case study, the company abuses that Tom terminated with immediate effect due to persistent poor job performance. However, more specific details are not available and there is a need for the company to prove this and then only the termination of Tom may be considered as fair. Hence, Tom may file a case against Unfit Ltd. As it violated the principles of European contract law (The commission on European contract law, 1999) In addition, the removal process must be in conformity with the contract clauses made between the Unfit Ltd. and Tom. There are different clauses like requirement of wearing an uniform supplied by the company, requirement of utilizing the company’s equipment and support staff, allocation of atleast 20 sessions for personal training of the company’s employees. In the present case, there is no evidence that Tom violated any one of these clauses and hence his termination is illogical and he can claim in court of law against the Unfit Ltd. for unfair dismissal. The company dismissed Tom with out any notice which is also not fair and violation of the contract made between him and Unfit Ltd. This is to be viewed as clear violation of contract law and the affected persons must be provided enough justice. In some of the contract law violation cases, the innocent people were provided with sufficient justice (Hugh Beal, 1978 ; Friedmann, 1972). The violation of terms and conditions and clauses signed at the time of contract is legally punishable and hence both the parties have to bind themselves to the contract strictly as in the case of L.Estrange V Graucob (1934). Hence, Tom has to proceed to the court seeking the justice as he has fair chance of winning the same. This is because of the following reasons: 1. Tom has not violated any contractual clauses as such. No proof also is available for any allegations of the company Unfit Ltd. In terms of violation of contract law. 2. He was dismissed with out serving proper notice and he has no chance of representing him self in the court of law which is incorrect. 3. There is no proof or record for indiscipline of Tom while delivering his job. In addition, there is no grievance reported against him as per the available records and hence h can’t be terminated suddenly. 4. The main reason quoted by the company for his removal is poor job performance, but there is no proportionate supporting evidence or document about this. Unless he is involved in any mistake regularly while performing his job and irregular timing and lack of reaching the target provided to him, the poor job performance cannot be justified. In the present case, Tom has no record of any of these irregularities and hence the company will lose the case in court of law and Tom may be compensated for his job loss. 5. Moreover, it is certainly violated the principles of contract law which states that a valid contract requires: (a) an agreement; (b) an intention to create legal relations; and (c) consideration (Pollock, 1952). It is strongly needed to monitor all the three requirements along with the follow up actions from both parties. Once, the performance of Tom is compared with the above mentioned requirements of the contract, it is clear that he is not involved in any breaching of the terms of the contract and hence any negative action in the form of termination form the job should be condemned. Keeping this in view, Tom must be taken back to the job by Unfit Ltd. And he should also be provided necessary compensation for the losses incurred during the period of non employment. 6. The company may argue that the status of Tom is not regular or permanent in nature and hence he may not have the right to challenge the dismissal. But it is not acceptable because Tom has been given a job with some terms and conditions under contract law. Once, a contract is signed, both the parties are bound to follow the terms of the contract and the company violated the norms of the contract law by issuing a termination order with out any prior notice or intimation which is unfair. At the same time, Tom was denied of proving his innocence against the allegations made by the company. Once the clauses of the contract are violated by one party, the other party has every right to file a case in court of law and hence Tom should represent his case in court of law and there is high possibility for getting the necessary compensation. 7. The length of service may be interpreted negatively for deciding the status of Tom in the company. But Tom served for the period of one year and he has no record of any involvement in irregularities. Hence, his contractual job status cannot be questioned. Though he declared himself as self employment category under the scheme of human resource ministry, his contribution of services to Unfit Ltd. would be treated as per the terms and conditions of contract. Hence he would be highly safeguarded against the allegations of the company and he will have his full right to claim compensation from Unfit Ltd. 8. Lastly, the ACAS code of practice on disciplinary and grievance procedures which came in to effect from 2009 clearly mentions that the employers and employees must settle the issues or disputes that arise during process of working in any organization. According to ACAS code of practice on disciplinary and grievance procedures, necessary investigations have to be made to establish the facts or prove the allegations made by the organization, then only the said practice will be considered as fair. In the present case, the company Unfit Ltd. didn’t make any investigation for proving the poor job performance of Tom and hence it comes under unethical practice and lack of professional ethics. At the same time, ACAS code of practice on disciplinary and grievance procedures was also violated by Unfit Ltd. by not giving the opportunity to Tom to represent his views and hence Tom has no option except to challenge the decision of Unfit Ltd. in the court of law and he has sound chance of winning the case. Part 2 : Plan for redundancy to be produced before the next senior management meeting The human resource manager has to facilitate efficient human resource utilization in any firm or an organization by strategic planning from time to time (Mathis and Jackson, 2004). If a company is expanding its operation with increasing business outlay, there will be demand for higher number of employees to be recruited for which human resource manager provides the specifications of the eligibility conditions and skills. At the same time, if a company is facing some market challenges which may result in lower output capacity, the human resource manager has to chalk out the plan for reducing the employee number after deciding the optimum size of the company, other wise, the cost of production would be increased enormously leading to losses (Nkomo et al., 2007). In the present case, the manufacturing company faced severe problem due to decreased demand for its spare parts and also due to economic recession and hence it has to reduce the employee number by around 20 % to reduce the losses to be incurred. However, the process of redundancy must be operated very carefully and it should meet the legal requirements. Redundancy means the process of dismissal or removal of the employees from any organization as their services are no longer required (Suter, 2005). In the present case, redundancy by 20% is required which is very crucial. One basic principle is that the company management must make a list of the employees based on their work experience, skills, attitude and efficiency. The redundancy should not be based on the age of the employees and it should consider the regulations mentioned under DDA (Disability Discrimination Act, 1995). If any employee makes a complaint against the employer on grounds of discrimination in terms of employment or redundancy and the employee tribunal finds it correct, then huge compensation will have to be paid to the employees in proportion of the losses incurred due to loss of their job (A v. B and C, 2010). After the list is made, identify the employees with less potential and poor efficiency and put them in the list of redundancy. The employees who were punished earlier on disciplinary grounds must be included in the list of redundant employees. At the same time, the employees who were recognized for their outstanding performance in any past events must not be included in the redundancy list. Generally, the employees show resistance to the process of redundancy and hence the management must take the steps systematically so that no legal problems would arise in future. In some of the cases, the issues can be solved by providing some compensation and by explaining the plight of the company. Identify the employees who are facing sever health problems and on the basis of medical fitness, they can be convinced about their removal with some reasonable amount of compensation which can be used for their future medical and other expenses. Similarly, the employees who are in deep financial crisis may also be identified and they can be convinced about their removal with the payment of compensation amount which can be utilized for clearing their debts. In all the cases of redundancy, they can be assured about the job once the company comes back in to the profit zone once the economy becomes normal. Most important thing here is that the confidence of the employees on the company’s ethics has to be enhanced and they should be provided with some alternate avenues in its sister organizations. These steps would certainly help us in solving the redundancy problem with out any legal complications. The process of redundancy must satisfy the ACAS code of practice on disciplinary and grievance procedures (ACAS, 2009). The grievances of the employees must be attended by the company while implementing the process of renundancy. The employees who are about to be removed must be served the notices with reasonable time period and they should be given representation about their grievances before the removal process. At the same time, the employer and employee interaction or consultation meetings should happen at frequent intervals so that the transparency would be maintained. The employees must be convinced about the ill financial health of the company in the event of economic recession and they should cooperate with the management. The trade union organization has to be involved in facilitating this process of redundancy. The sessions of ACAS may be helpful in softening the relations among the employers and employees and trade unions (ACAS, 2011). As the Managing Director has indicated to reduce the number of employees to be removed in case of other cost saving measures, the company may concentrate on the following economic measures: 1. Use of latest machinery with higher efficiency and the old machinery may be disposed gradually, this will save considerable amount of money because of faster processing. 2. By reducing the middlemen in the transactions and involving the employees directly, cost component can be reduced significantly. 3. By utilizing electronic media, the marketing process can be fastened and customers can be directly reached with out any problem and it saves considerable amount of monetary resources of the company. The contract law shouldn’t be violated by the company during the process of redundancy. Whatever the terms and conditions mentioned in the initial contract between the workers / worker unions and the management of the organization must be implemented strictly to avoid the legal complications. In all the important meetings in which redundancy decisions are taken, the trade union representative must be invited and his formal agreement must be recorded. Other wise, it would be treated as violation of the contract law and company may be asked to take back their employees. Another important point to be remembered is that one shouldn’t allow the situation to go in to the hands of the employment tribunals where it is very expensive and time consuming for the final settlement. In addition, the employment tribunal cases result in negative publicity and damaged employer employee relationship. The existing employees may feel insecure on noting down the proceedings of the tribunal which should be avoided. There is a possibility of facing a civil case in case the employees file a case in the civil court for their reemployment (Slocombe, 2010). Hence, the legislation clauses of the employment must be satisfied before taking the redundancy of the employees. Care must be taken to see that the redundancy process will not be treated as a breach of contract between the employer and the employees. However, in cases of getting notice from employment tribunals, the steps for defending the case must be well taken. For this, the procedure must be well for identifying the employees based on their job performance. The paper work or file work must be well supporting the administrative decision. This will help us in defending the case in employment tribunal. In addition, the employee or trade unions must be well consulted before finalizing the list and after getting their nod, the final list can be prepared. This will certainly make the redundancy process less complicated from legal angle. The majority employees who would be retained must be well communicated about the potential reason and urgency of the redundancy in sustaining the balance sheet of the company and they should be provided a sense of job security as long as they are efficient in their duty. Their support in removing the other employees based on the performance levels would be highly needed to smoothen the redundancy process. Moreover, the removed employees would be helped in finding their alternative jobs in the market so that they may e convinced peacefully. Their entitlements which are due till date of redundancy must be paid immediately. Once an employee is removed with payment of compensation, he cannot bring a further unfair dismissal complaint on other grounds as in case of Bari v. Aspen Windows Group Ltd. (2001). Overall, the process of redundancy is very painful for the employees and it takes longer time for them to digest. Hence, strategic planning is needed for the successful redundancy in our organization. However, with good communication between the management and employees, the process of redundancy can be completed with minimum pain and legal complications. As the redundancy involves more than 20 people in present case, the individual employee consultation is also mandatory along with the interaction with the trade unions. The employees are entitled to redundancy payments as the company is removing them not based on their capability but due to its financial problems. The amount of compensation must be decided by mutual consultation and the employees must be assured about their alternate employment with in specific period of time. The above mentioned plan would certainly help our organization to operate the process of redundancy. References Cases A v. (1) B and (2) C. [2010]. EWCA. Civ. 1378. ACAS. (2011). Case study on Repairing the relationships between the trade unions and the executive and non-executive teams in a public sector organization. P:3. http://www.acas.org.uk/media/pdf/a/k/Repairing_relationships_between_the_trade_unions_and_the_executive_and_non-executive_teams_in_a_publ.pdf. Bari v. Aspen Windows Grop Ltd. [2001]. EAT/ 0412/01. L.Estrange V Graucob, 1934, 2 K.B. 394. Statutes Disability Discrimination Act. (1995). 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