Business Law - Contents of Employment Contracts, Legal Liabilities of Managers and Directors - Essay Example

Business Law Code + Course by Student Name Professor’s Name University Name City Date Business Law Contents of Employment Contracts Employment contracts are essential for both the organization and its employees. They provide legal protection platform hence cultivates mutual understanding between the two parties. There are obligations that must be observed by both organization’s management team and the employees. They include duties and with legal liabilities. A complete employment contract should define job position, state the length of the agreement and specify performance terms, (Guest, Isaksson & Witte, 2010, p.13). It should also clearly show the compensation terms, benefits of both parties and format of termination. Defining the position requires that you clearly avail information for the employee to understand fully the job requirements, (Media, 2012, p.23). It includes stating the name of the post to be held and all duties to be done. Inform the employee on the place of operation and hours to be on work. When stating the length of the contract, show the starting and ending dates. Provide conditions and steps to be followed where extension, reduction and abrupt termination of the duration are necessary. For performance, it is better to show necessary skills that you might want upgraded during the term of the contract. State the production goals to be achieved and revenue advancements. State all performance measurement barometers that the employee will be held accountable. Every employee will automatically be interested in the compensation plan. It is better when to come out clearly and specify the basic salary to the employee and show the method and mode of payment. In addition, outline the process and terms of operation in case of overtime. Furthermore, state the incentives on top of the normal salary and how you will be handling draws against the salary, wages or commissions. Show the employee the effect of termination of the contract both at the right time and before the expiry of the duration. Moreover, show the employee the importance and benefits he gains by working at your firm. They can be personal, or family-related in terms of health, insurances, education, security, check-ups and diagnosis. Declare the premium percentage benefits the employee has to pay. Show the legal requirements and demands from the government that the employee will be held liable. Explain how the employee will be treated where holidays, vacations, profit sharing and stock options are involved. Inform the employee about the retirement plan available for him and the right process of engagement and where necessary, some covenants might be incorporated. It is necessary to inform the employee what will happen when the contract is terminated. The move is mostly important where the employee opts to leave before the end of the stipulated time. State the scenarios and severance terms applying in each case. Legal Liabilities of Managers and Directors On the other hand, the company managers and directors must fulfill must meet certain legal requirements as stipulated by the law. Failure to adhere to them leads to being held liable and responsible on behave of the company. The director must represent interests of members of the organization when directing business affairs but ensure he does this within the law requirements. The duties include diligence, loyalty, and obedience. The duty of care requires that the one acts reasonably, in good faith and prudently. The duty of loyalty demands that one puts the organization’s interest first. It means that you don’t have the position to further your private interest. On the other hand, the duty of obedience needs one to act within the stipulated scope of governing policies. The policies can be organizational based or based on laws, rules and regulations of other bodies. As stated earlier, failure to fulfill the above leads to one facing certain disciplinary measures that might neither favor nor be pleasing to him. The legal liabilities will be imposed on a director when the law is broken, a contract violated, or damage is caused to another person, (Monks & Minow, 2011, p.15). When the law is broken, it leads to paying an excellent, rise of restrictions on one’s rights and privileges or being imprisoned. The statutory obligations of the directors might be related to; officer appointments, tax payment, environmental pollution and conservation, meeting and minutes, disclosure of information, salary payment and safety at work. When a contract is breached, it results in either correction through the extra service or financial compensation paid. The contracts might be between the company and employees, contractors or other bodies interested in the company’s activities. Whether intentional or unintentional, the damage done to somebody else requires that a financial compensation is made to pay for the remedy. The damage can be physical or mental effects to the person or their property. It as well incorporates some aspects of errors, omissions and decisions that interfere with other people’s rights, opportunities, and privileges. All these elements depend on how directors govern the company, manage funds, supervise the staff and make decisions. It is, therefore, important to assess situations first and identify protective measures to prevent the occurrence of what is not right according to the law. In cases where it can’t be avoided, don’t be resistant to cooperate and take the appropriate measure. The director must ensure employees are familiar with the offenses, and they are trained to be effective and efficient. How European Union Law Business in the United Kingdom The European Union (EU) was started in 1957 during signing a treaty of the Rome, (Sauter & Schepel, 2009, p.34). Its primary goal was the create a common market in the region. The six founding countries were Belgium, France, Italy, Luxembourg, Netherlands and West Germany. Up to date, the EU has twenty-seven countries United Kingdom being one of them. However, the UK has not subscribed to the use of the euro as its motherland currency. The EU has put in place various laws, rules and regulations that govern member states and control their operations. Among them is the employment law. The EU employment law protects workers’ rights in all its member countries. The directives must be implemented within the specified time though they are flexible. The employment law deals with, employment terms and conditions e.g. equal payment, working timetable, discrimination, part time and protection of vulnerable people like pregnant women. It also demands that workers be provided with information during business transfers and redundancy. It as well states the protection of personal date of all workers. UK’s working conditions have been significantly influenced by the EU legislation. The effects have been achieved through regulations, directives, and decision framework agreements. Regulations have been perceived as national laws but applicable in all EU states. Directives are general rules but are transferred into national law by each country at its own appropriate time. Decisions are employed in particular issues where they name a specific organization. The social charter of EU consecrates fundamental rights of association, information, and collective bargaining. Other subsidiary bodies are also in place to help in decision-making and implement the laws. The UK tribunals always consider the relevance of directives that are established in the EU. The UK business sector is greatly influenced by the EU law because the UK employment law was obtained from the EU law. This is specifically in the areas of equal pay and equal treatment of workers alongside statutory rights in the employment law, (Lockton, 2013, p.26). Employer and employees’ rights are from the common law that governs all contracts between employer and employee. The UK legislation and ECJ also contribute to these rights. They allow the employer and employee to agree on precise terms of their choice provide they are within the set minimum statutory rights. The common law states general terms of employment contracts. They include workplace safety, discrimination and harassment, unfair and constructive dismissal, redundancy, employment tribunals and employment rights, for example, working hours, maternity rights. The following shows the way through which the EU law affects contributes to business conduct in the UK; The EU is a free trade bloc hence no quotas and tariffs for exporting companies. This helps UK businesses reach wider markets at fair operational costs. The effect of this is high returns to the company and more investment avenues. The common commercial policy helps protect the UK businesses from import completions from countries that are not members of the EU. Cushioning this competition opens high market share and favorable environment for businesses. The EU competition law helps small firms in the UK invest across the EU. It eliminates the dominance of large firms hence no monopoly and cartels. The internal market is essential for the UK citizens. The UK labor force can live and work in any state within the EU and get education there as well. These acts earn UK foreign currency that can be used to acquire easily what is not available. Trans-European networks are essential for infrastructural development hence easy to do business. The EU law is the base of anti-discrimination at the workplace on grounds of religion, race, ethnicity, age, sex, disability. The law states clearly occupational requirements, accommodation for disabled. They finalize with stating the remedies and enforcement of the statutes. The effect of this is that people from other countries can come to the UK and invest like any other citizen. They also have the right to be given the job than the UK citizens. There is a need for equality when handling all employees. It requires equal value and equal pay for both men and women and accorded same social security among others. The move is good for employees working at the same level. It eliminates discrimination hence cultivates good working relationships between and among people whose effect is high performance. The EU law also contributes to the UK’s working hour laws in contracts. It states the amount of hours people should work per week. They also state maximum hours of working at night and special conditions necessary. It as well protects workers’ health and safety. The law is necessary because it helps UK employees have enough time to do personal duties. They are also not overworked hence stay active and productive every day. It enables everybody set goals and program on how to achieve them through mutual understanding. Generally, the EU law is the essential tool for business operations in the UK hence the entire economy, (Hartley & Hartley, 2010, p.44). There are more positive aspects of its contribution to the UK engagement. Sources of Law Affecting Businesses and Policies For sound business operations and justice in the society, there must be a set of rules, regulations, policies and the law that states the scope of activities. There are various sources of these regulatory terms and conditions to be followed, (Morgan, 2012, p.37). They might be internal or external, mandatory or optional, governmental or privately administered. Internal sources are made within the company by major stakeholders. External rules are set by other organizations that protect the public’s interest. Mandatory rules are regulations that the company must comply with. For optional rules, they might choose not to practice them. Most rules regulating business operations are set by the government of the country. However, some of the rules are set by no governmental organizations that might be within the country or operate on the international scale. These rules are aimed at protecting the company, customers, employees and all people who face the danger of being affected by the company’s operations. Primary sources of the laws and policies pertaining businesses and their services are; constitutions, judiciaries, legislatures, administrative agencies, executives and international organizations. The constitution is the fundamental law that forms the supreme law of the land. Every country, organization, and business must have a constitution. The Constitution guides the operations and states what to do and what not to do. It allocates powers and duties among all levels of management and administration. The judiciary comprises of courts with judges who preside over cases to solve disputes. They provide laws through judicial reviews and common law. Judicial review is where the court decides basing on the constitutionality or government’s action. Common law is where the judge resolves the dispute using rational thoughts basing on the evidence emerging from both involved parties. Legislature is the body of ruling people that makes and passes laws. They set operational standards that must be made by any business operating in the country. Administrative agencies are authorities put in place especially by the legislature to oversee specific statutes on a day to day basis. They enact, enforce and adjudicate any violation of rules and regulations. The Executive is the highest body of an organization. They are central decision makers and are tasked with the duty to assign responsibilities and give orders to what to be done. International organizations recognized globally are essential sources of law, (Pease, 2012 p. 55). Their operations and area of jurisdiction are on a global scale. Among many of them some are European Union, United Nations, general agreement tariffs, and trade. Consumers must be protected against greedy business owners. They can achieve this through governments help or consumer based organizations. The government regulations might require companies to give full information about the use of their products. The government will mostly protect consumers’ health and safety. Consumer organizations are formed to help consumers make good decisions when choosing products. They also provide room for customers to deliver their opinions, views, and complaints. Other nongovernmental organizations can be formed to protect the entire public interest. They in turn incorporate the well-being of consumers of any given product. They serve as activists where the consumer is innocent or legal representatives in case the consumer cannot afford to hire an advocate. The competition law is another avenue through which consumer interest can be served. It helps in stabilizing the market and hence the prices and other economically related issues. The country’s constitution and leadership are essential for advocating for the rights of its citizens, (Jasper, 2007, p.67). International organizations are also viable where the country leadership is dormant. Companies attain their operation rules after a survey of various regulatory aspects. The bodies can be government requirements, nongovernmental departments or just improvised within the firm. The company owners, managers, and directors, decide to sit and make the firm’s constitution. They state the goals to be achieved and the roadmap to be followed to attain them. They state the code of conduct, dress code and customer service practices company workers should depict. The government set rules to be followed by the firm in a given sector. There are also legal requirements that a company must undergo in order to qualify for permission to operate in a given country. The government also set operation charges to be done by the business. They control environmental degradation through the operations of the company. On the other hand, nongovernmental organizations also affect the operations of the firm. They set rules that must be adhered to for the well being of the entire global society. These organizations are usually attracted by the environment and the health of people across the world. Employees are not an exception in this case as they are also part of the society. The company management and directors will always set rules to be adhered to by their employees. Employee organizations also exist to guide them on how to do their job, (Werhane, Radin & Bowie, 2004, p.74). The organizations also enable them present crevices and views. The government also requires employees to fulfill certain legal obligations. Nongovernmental organizations also provide guidelines on how employees should conduct themselves in safety. Conclusion It is important for the government to encourage employment contracts in every country. They should be considered as one of the primary legal requirement tools. They make it easier to solve arguments between employer and the employee. They also ensure every participating party is satisfied with whatever they do. Contracts should be initiated in all sectors and at all levels. Fulfilling legal requirements is the best way of cultivating mutuality. Providing clear guidelines to be followed is the best way to ensure no one falls on the wrong side of the law. They also help to the save time where a breach has been done because no explanation will be sort. The EU statute laws have the significant influence on the operations in the UK. It is an essential part because it deals with issues directly related to the economy. On the other the business must identify some governing policies and ensure they operate within the limits. It is important to recognize all regulatory bodies and comply with the specifications. Bibiliography Guest, D., Isaksson, K. and Witte, H. (2010). Employment contracts, psychological contracts, and employee well-being. Oxford: Oxford University Press.pp.13 Hartley, T. and Hartley, T. (2010). The foundations of European Union law. Oxford: Oxford University Press.pp.44 Jasper, M. (2007). Consumer rights law. New York: Oxford University Press.pp.67 Lockton, D. (2013). Employment law. Abingdon, Oxon [UK]: Routledge.pp.26 Media, B. (2012). Employement Law Explained. London: BPP Learning Media.pp.23 Monks, R. and Minow, N. (2011). Corporate governance, fifth edition. Chichester, West Sussex, U.K.: John Wiley & Sons.pp.15 Morgan, J. (2012). Business law. Redding, CA: BVT Publishing.pp.37 Sauter, W. and Schepel, H. (2009). State and market in European Union law. Cambridge [U.K.]: Cambridge University Press.pp.34 Werhane, P., Radin, T. and Bowie, N. (2004). Employment and employee rights. Malden, MA: Blackwell Publishing.pp.74 Read More