Foundation of Law concerning Employment - Assignment Example

Bhl4010 Foundations of Law Part a Introduction Employers are held responsible for the conduct of their employees. The employer is held liable even if he/she had no intention to cause harm or even when he/she played no role in the harm. Negligence in employment involves numerous causes of action in tort law that come up where the employer is held responsible for the tortious actions on the employee for the reason that the employee was negligent in providing the employee with the required ability to engage in particular acts. The employee is taken as a director of the employees’ behaviors and must accordingly; share in the good and in the bad results of every behavior. In the same way that the employer is legally entitled the profits of an employee’s work, the employer has also a legal liability if the same work results in harm. On the other hand, is someone is injured and needs to be compensated; the legal system makes the victim whole and assigns liability to the employer and not the employee. The employer is therefore liable for any harm caused by their servants acting within the scope of employment. There are various legal theories which the employer may be held responsible for the actions of their employee. Vicarious Liability The master can be held liable for any harm caused by the employee acting in the scope of occupation. This applies to both employees and to the independent contractors for as log as there is an agency relationship. According to the plaintiff’s attorney, the employer should know that the employee might cause harm. If the employee cause the harm while acting within the scope of employment, his/her employer is liable for damages incurred by the victim. This means that irrespective of the employer’s good intentions, or policies, I the employee cause an injury or harm to anybody within and without the company, while performing within the scope of the employment, the responsibility traces back to the employer (Marson, 2013, pg. 43). Negligent Hiring, Retention, and Supervision Unlike the vicarious liability, the negligent hiring, retention and supervision arises from actions performed by an employee outside the scope of his/her employment. An example of this liability occurs when the employer is held responsible for criminal conducts of the employee. The bases of this liability are upon the carelessness of the employer on hiring a criminal for a piece of work that he expected would endanger the lives of others. This is now recognized as a cause of action by many nations. There elements are required for liability to attach to the master (employer). Firstly, employers who employ individuals must train them in every sector of their job responsibilities, if failing to do so would result to injuries. For example, employees who operate a vehicle should be adequately trained to do so to avoid destructed driving because the risk is foreseeable. Secondly, the employer is responsible for hiring, training and supervising employees. Failure to do so is described as a breach of that duty. Lastly, there must be causation between the injury and the conduct. By virtual of employees using some unnecessary devices at work such as the mobile devices while driving company’s vehicle, the employer is said to have breached his/her duty to supervise his/her employees and is thus held liable to the accident victims. Harassment Employees’ harassment by other employees in their workplace has become a problematic source of business liability for employees. This liability violates federal law upon its involvement to discriminatory treatment based on issues of color, race, sex, religion, age, nationality, genetic information, disability or the employee’s opposition discrimination of job or their participation in an investigation. Workplace harassment does not mean simple teasing or incidents that are not extremely serious (Pozgar and Santucci, 2009, pg. 87). The type of harassment must be sufficiently severe or frequent to create a hostile work environment or bring about a tangible employment action like firing, demotion or hiring. Even of the harassment does not lead to a tangible employment action, the employer can still be held responsible unless it proves that: the employer performed some reasonable care to promptly correct and prevent any harassment and, The victim of harassment failed to report or complain to the management or to avoid harm. The employer can be held liable for any harassment occurring within the workplace if he/she did not enforce a policy that prohibit harassment or set out a procedure for reporting or making complaints in writing. Such liabilities can be avoided in small businesses through less formal means for example if the owners can maintain a regular conduct with all the employees. The owner can inform all the employees in a staff meeting that harassment is prohibited and that victims should promptly report the matter and provide the procedure for reporting. Lastly, it is not enough to create a harassment policy. A company must also conduct thorough, prompt and independent investigations into any complaint that arises (Pozgar and Pozgar, 1992, pg. 23). Negligent Entrustment This tort is commonly found in cases of vehicle accidents. In a commercial automobile task, an issue of negligent entrustment arises when the manager gives an opportunity to the employee to use a vehicle knowing or with a reason to know that using the vehicle may create a risk or harm to others. The main focus on this liability is the employer’s reason to know or to have known that the employer was likely to cause a risk in his/her destructed driving. Lack of adequate supervision to the employee may be evidenced in the employee’s calls with other employees or customers, or responding to calls or texts while driving during business hours. Since this principle is very much straightforward, some plaintiff’s attorneys make this claim since there are no requirements that the driving is within the scope of employment, but on operating a company vehicle. Dangerous Instrumentality This doctrine is an outgrowth of negligent entrustment. The liability has currently become a strict liability. The plaintiff is not required to demonstrate either real knowledge or a constructive knowledge on the employer’s par that the employee would likely have a distracted driving. For as long as the employee caused the accident, the employer would be held liable (International Association of Fire Chiefs, & National Fire Protection Association, 2012, pg. 90). Employer responsibility exists even during unexpected circumstances. Taking the example of a vehicle accident, various ways can hold the employer responsible. Many companies and their insurers have paid large amounts of money in lawsuit settlements for these accidents. Accountability is found even in cases where employers have had cell phone guidelines in place, for example when company drivers were on personal errands or when they were making personal calls on phones supplied by companies, or even when employees were using personal phones or driving personal cars when it was a business-related destruction. Examples of such incidents; In 2012, in Texas, the Coca-Cola Company was charged 24 million dollars to a woman injured by a sales person from the company driving a Coca-Cola company car while using a hands-free device. It was held that, although the Coca-Cola Company had a functioning policy, the policy alone was not enough and sufficient as a defense and that the company was negligent. On another occasion, still in Texas, a Cable One technician was driving his work truck towards a stopped vehicle. As a result of this incident, the truck killed a mother and an old woman while the technician was admitted. Evidence to this matter was that the technician was texting before the accident had occurred. Cable One Company settled the case for a private amount. However, it is assumed to have been a large amount of money. In another occasion, Robert, a stock broker and an employee of Salomon Smith Barney, was driving to an out-of-business event when he stuck and killed a twenty-four year old motorcyclist. This driver was on personal time and in a personal car using his own cell phone. Upon investigations, the broker agreed to have been making phone calls while driving. In this case, the company policy was deemed negligent and the company was forced to settle the case. Companies should enact laws that prevent any risks caused by employees. The establishment of the policies and laws should not only be left out for employees to observe. Employers should keep watch on the performances of their employees. Other employees may assume the laws and go out to perform their activities. Workers may cause a great damage while working in the field for a certain company. Careless driving of company vehicles as well as the misuse of other commodities from a certain company may bring the company too much risks or hazards to consumers. If employees cause damages or injuries to other people while at the scope of employment. The e employer is held responsible for any action performed by the employee and pays for all compensation due. In many businesses where employees use mobile phones and other gargets, there is a more likeliness to occur some accidents. If the employee injures another person in an accident, the employer involved in the business is held reasonable for the occurrence of the bad action. It is claimed that the employer should know. Part b The choice of legal status for someone’s business is a complex one and may be depended on the number of tax , legal considerations an commercial that impact on the business for a number of years to come. Getting it wrong may bring in many negative consequences that are not just costly in tax form but in many practical difficulties regarding future succession and sale of the business. It is sometimes good to take time and consider the pros and cons of every option as the time invested at business planning stage will be of benefit in the future. Should Jane and Cherry operate as a limited company or operate as partnership? Or even go for the limited liability partnership status that some people believe offers the best of the words? Selecting an appropriate status of one’s business is an essential factor, as this determines numerous issues such as tax, the company’s future succession and many other issues (Barclay and Barrow, 2011, pg. 54). It is commonly assumed that incorporation brings substantial tax benefits and improved financial protection to directors. However, this is not always the case. For some businesses, in fact, running a partnership can be the most resourceful and rewarding rout. Each firm must evaluate its specific ambitions in consideration of current circumstances and decide the most appropriate strategy. Indeed, the selection of the most effective strategy for a company is one part of the business plan. Nonetheless, it is good to understand what it means by limited companies and partnership. A limited company, to begin with, is a legal entity, which is run by directors and is owned by stakeholders, who are mostly the same people. In this case, every company must publish its annual accounts. Small businesses are only required to provide a basic financial summary and in the case of the ones who have a turnover under 5.6 million dollars per annum, no audit is require. On the other hand, partnerships are run and owned by individual partners who are jointly and personally responsible for actions of their fellow partners that in one way or the other account for the importance of a partnership or audit the accounts, despite how large they may get, although there is a move towards improved transparency. Some actions perfo0rmed under the limited liability takes, for example, some few clients in a company may set up a limited liability company to run together with the partnership to which different types of tasks are directed. This may afford the maximum flexibility and may help the business to protect it self. This action may also be a useful means of ensuring succession as partners. Leaving a partnership can result to dissolution whereas a company may continue, even with the retirement of the directors. Limited liability partnerships may bring the benefits of limited liability while maintain a traditional partnership. In this regard, an increased number of businesses of varied sizes have optioned for this. Because members have limited liability, protecting the ones who deal with a limited liability partnership may require that the limited liability partnership maintain accounting records, formulate and convey reviewed annual accounts. These should be delivered to the registrar of companies, ad also submit an annual return in the same way as companies do. The exemptions and limits available to companies with respect to delivering abbreviated accounts and exemption form audit also applies to the limited liability partnerships (Canwell, 2005, pg. 109). The type of work that an organization undertakes often dictates whether or not the limited liability is required. If an organization has regular overseas projects or offer services for quite large clients like for the case of Jane and Cherry’s Enjoy Spa, incorporation may be most appropriate from a commercial perspective. But limited liability does not entirely protect the proprietors. For example, individual guarantees may be required if loans or any other form of cash is required (Good small business guide 2013, pg. 90). Insurance should constantly be considered to cover potential liabilities in any event. If Jane or Cherry plans to re-invest or leave money in the business, incorporation can offer advantages since the profits left in the company attract corporation tax at a lower arte than income tax. Highest corporation tax rates of 30% is paid on profits gong beyond 1.5 million dollars. Centrally, partners pay an income tax of up to 40% of their total profits whether they draw the profits or not. Income tax rates for directors and partners are the same. However, directors of limited companies pay national insurance contributions at a much higher rate than individuals from partnership organization which significantly adds to both the company’s and personal tax bill. Indeed, paying the director of a company and a member of the partnership 65,030 dollars net, the company will be required to make 14.3% extra profit than the comparable partnership. In such a case, the limited company pays up to 50,000 dollars to the company while the partnership pays 35,000 dollar. Jane and Cherry should be brought together through partnership to contribute capital and skills for the expansion of their business (Bloomsbury, 2012, pg. 26). Main Features of Partnership Agreement: partners can not be formed without agreements which could either be written or oral. It is commonly written for settlement of disputes Number of partners: there should be at least two partners in a partnership. In an ordinary business, the partners should not exceed twenty while in cases of banking, not more than ten members are required. Profit and loss distribution: the main aim of partnership is to earn profits. Profits are distributed among partners according to their agreement. In case of loses, all partners share it. No one is liable for loses or higher profits than any other. All members equally participate sharing loses and profits with equity. Unlimited liability: the partner’s liability is not limited to his/her invested amount. If the company incurs loses, the private property of the member is also used to pay the business obligations. Equity: any legal entity to equity has been granted by the law. While this is not in depended from the partners, it has got no separate entity from the partners. Overall Recommendation Partnerships are comparatively easy to establish. With more than owner of the business, the ability to raise money may be increased. This is because two or more partners are able to contribute more funds since their borrowing capacity is greater. Jane and Cherry should bring their minds together and combine their resources to come up with an improved business. Partnership entails coming together and sharing all aspect of business development. This includes sharing ideas and having an opportunity to give out opinions on the company modification. Two heads are better than one. If the two entrepreneurs join together, the company management shall be improved and thus business shall flourish. This structure brings in much benefit from the combination of complimentary skills of two or more individuals. In this situation, there is a wider pool of knowledge, contacts and skills. This structure would also be cost effective. This is because each partner will specialize in certain aspects of his/her business. Lastly, partnerships provide moral support and allows for more creative brainstorming. This is very significant and may help to identify and correct mistakes of the company. Conclusion Business and employment are two aspects which lead to a common goal. Individuals in both aspects are bound to some challenges. Employers and employees may face day to day risks due some negligent or other legal actions. In the same way, business people are faced with challenges on which way is the best for running their business. People in both aspects have common expectations, profits or loses. Bibliography (2013). Good small business guide 2013: how to start and grow your own business. London, A. & C. Black. BARCLAY, L., & BARROW, C. (2011). Starting & running a business all-in-one for dummies. Chichester, West Sussex, John Wiley & Sons. BLOOMSBURY. (2012). Good small business guide 2013 how to start and grow your own business. London, Bloomsbury. CANWELL, D. (2005). BTEC First Diploma in Business. Cheltenham, Nelson Thornes. MARSON, J. (2013). Business law. NTERNATIONAL ASSOCIATION OF FIRE CHIEFS, & NATIONAL FIRE PROTECTION ASSOCIATION. (2012). Chief officer: principles and practice. Boston, MA, Jones & Bartlett Learning. POZGAR, G. D., & POZGAR, G. D. (1992). 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