The Complex Area of Employment Law - Coursework Example

PART A The continuous development of different working structures to accommo the modern business environment has rendered the complex area of employment law a legal minefield. The significant variances in contemporary working relationship structures have compounded the need for legal certainty whilst simultaneously ensuring that justice is served in individual cases (Honeyball & Bowers, 2006). For both employer and worker, the legal status as employee is vital to determining employer liability in respect of tax and insurance on the one hand and employee rights guaranteed by the common law and statute on the other (Pitt, 2007). With regard to employee status, section 230 of the Employment Rights Act 1996 (ERA) defines an employee as “an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment”. The section 230 definition has been criticised for being ambiguous and it is also necessary to refer to the common law test for defining the status of an employee (Pitt, 2007). The starting point for determining whether an individual is an employee is the “control” test, which was established in Yewens v Noakes (1880 6 Q.B.D. 530). This was further acknowledged by the Court of Appeal in Walker v Crystal Palace FC [1910] 1 KB 87, where the control test was given a different slant by focusing on whether the employer had the right to control the background arrangements for the work such as when and where the work was done, payments and holiday entitlements. The Walker extension of the control test was further developed into the “integration” in the case of Stevenson Jordan and Harrison v MacDonald & Evans (([1952] 1 TLR 101) where the relevant factors was whether “a man is employed as part of the business and his work is done as an integral part of the business” (p11). This area of law is inherently complex, compounded by the difficulty of applying established legal principles to what Pitt refers to as the “shamrock organisation,” where firms have different types of workers including permanent full time workers, supply workers, and the flexible workforce (Pitt, 2007). As such the integrated test is difficult in reality to apply to the modern labour market. Therefore, in recent years, courts and employment tribunals (whilst taking account of the integrated test) now lean towards a multifactor approach, taking into account all possible relevant factors and weighing them against each in order to determine if an individual is an employee (Pitt, 2007). The judicial preference for a multifactor approach was asserted in the case of Market Investigations v Minister of Social Security [1969] 2 WLR where the following non-exhaustive factors were held to be relevant to determining whether or not an individual was an employee 1. Provision of personal service, 2. Whether the employer or the worker provides the tools and equipment, 3. The degree of financial risk the worker takes; 4. The responsibility for investment and management the worker has, and 5. If the worker directly profits from good work. Additionally, regardless of whether a worker is labelled as being self-employed, the definition of employee status is dependent on the reality of the working arrangement. Accordingly, establishing a worker’s legal status is vital at the outset of any working arrangement, due to the rights and liabilities implied into employment relationships under the law. PART B 1. Working hours and Rest Period Rights The legal provisions regulating working hours and rest periods are the Working Time Regulations (the Regulations) came into force in October 1998. Under the Regulations, the main legal influences impacting working hours and rest periods are employee status, the type of work involved and the extent to which employers have not opted out of the Regulations. The basic rights under the Regulations are as follows: 1) A limit of an average of 48 hours a week which a worker can be required to work (an employee can agree to opt out); a limit of an average shift of 8 hours work in a 24hr period which night workers can be required to work; A right for night workers to receive free health assessments; A right to 11 hours rest a day; A right to a day off each week; A right to an in-work rest break if the working day is longer than 6 hours; and A right to four weeks paid leave per year. The enforcement of the Regulations in the workplace is split between various authorities: Additionally, further guidance and recommended procedure to ensure employer compliance with the Regulations are provided by ACAS and can be accessed directly at www.acas.org.uk Under Section 1 of the Regulations a “worker” is an individual: 1) Who has a contract of employment; or 2) Someone who is paid a regular salary or wage and works for an organisation, business or individual. Their employer provides them with regular work and is responsible for tax and national insurance. Section 1 applies to both part time and full time workers, and the rights under the Regulations are applicable to part time employees on a pro-rata basis (Painter & Holmes, 2006). However, the Regulations do not apply to self-employed individuals and freelancers; therefore it is vital that the contractual arrangement between company and worker specifies the employment status of the individual in light of the Regulation provisions. The average weekly working time is calculated by dividing number of hours worked by number of weeks in the reference period. Account must also be taken of time taken off for sick leave. Furthermore, whilst employees can agree to an opt-out, it must be concluded in writing. It is recommended that such agreements include an express clause regarding notice periods for cancellation. 2. Areas of employer support that can impact your conditions of employment as a family member. The Work and Families Act 2006 and the Employment Rights Act 1996 provide carers with the right to request flexible working hours and the right to time off in emergencies. If an employee has at least one year’s continuous service with an employer and has a child under the age of 5, or alternatively a child that is entitled to disability living allowance, the law enables the employee to take parental leave on the following basis: 13 weeks (unpaid) per child to look after child; and 18 weeks per child for a disabled child. As a mother, there are also additional rights regarding maternity leave and maternity pay. 3. Two reasons to provide equal pay It is imperative to ensure equal pay for equal work in order to comply with employer obligations under the Equal Pay Act 1970 and to avoid potential litigation for sex discrimination. 4. Organisational Policies and good practice In implementing a structured organisational policy with full access and disclosure to employees not only serves to ensure compliance with legal obligations, it also encourages the channels of communication between employers and employees. This is vital to ensure open dialogue, fosters a good working environment and works towards preserving the implied mutual duty of good faith and confidence in the employment contract. PART C 1. Handling of the disciplinary procedure As the case involves an alleged theft this points to misconduct and in judging misconduct cases, courts and tribunals must refer to the ACAS Code of Practice on Disciplinary Practices and Procedures in Employment, although its guidance does not have the force of law. As such, any failure to follow the ACAS codes will count against the Company in determining the reasonableness of the dismissal but will not necessarily lead to determination that the dismissal was unfair (Pitt, G. 2007). In order to prevent a successful claim for unfair dismissal, the ACAS Code recommends that disciplinary rules must be stated clearly in writing with a copy given to every employee. Additionally, the ACAS Code provides that all employers must establish a procedure for dealing with disciplinary matters, which is recommended to be in writing, indicate to whom they apply, provide for prompt disposal of issues, indicate the range of possible sanctions and who may impose them and ensure that no decision is made before matters are properly investigated. Moreover, the Code provides that employees should have sufficient notice of any charges, the right to state their side of the story and the right to be represented by a trade union official or fellow employee, and that they should be given a reason for the decision. Moreover, there should be a right of appeal against any disciplinary action. The Code sets out a three stage procedure and apart from gross misconduct, recommends that no-one should be dismissed for a first breach of discipline. The three stage procedure provides for an oral warning for minor misconduct, or a first written warning for serious misconduct, a final written warning in the event of a further offence and finally disciplinary action (which could be dismissal or suspension without pay). Therefore in the current scenario, as the case involves theft, dismissal will be related to gross misconduct and therefore even if it is employee’s first breach of discipline, the employer may nevertheless have a defence for her unfair dismissal claim. However, in order to avoid a successful unfair dismissal claim, the employer would have to comply with recommendations of the ACAS Code that there should be no dismissal for a first breach of discipline unless there is proof of misconduct. Additionally, the employee concerned should also be given an opportunity to answer the allegations against them and be given a copy of an up to date disciplinary procedure that complies with the ACAS Codes of Practice recommendations. Additionally, a right to appeal should be given and failure to do so will prejudice the ability of the Company to rely on gross misconduct as a defence to any potential unfair dismissal claim. Moreover failure to adhere to proper procedure in dismissal will trigger section 98A of the ERA, which provides that procedural fairness must be complied with and that: “An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if……. One of the procedures set out in Part 1 of Schedule 2 to the Employment Act 2002…..has not been completed, and is attributable to failure by the employer to comply with its requirements.” With regard to failure to follow procedure, in Polkey v Dayton Services ([1988] ICR 142) Lord Bridge asserted that “in the case of misconduct, the employer will normally not act reasonably unless he investigates the complaint of misconduct fully and fairly and hears whatever the employee wishes to say in his defence or in explanation or mitigation” (at p. 162). 2. Redundancy Procedure The law imposes strict requirements for redundancy, which must be complied with to avoid employee claims. The main legislation governing redundancy procedure is the Trade Union and Labour Relations (Consolidation) Act 1992 and the ERA. Firstly, when considering redundancy, employers should consider whether there is an alternative option such as job share, retraining or redeployment. Secondly, a company should have a proper redundancy procedure in place that covers the following: 1. Statement of intent assuring job security where possible, 2. Details of consultation arrangements with trade union or employee representatives 3. The measures for minimising or avoiding compulsory redundancies 4. General guidance on selection criteria for redundancy 5. Details of severance pay, relocation expenses and appeals procedures, 6. Assistance with training and search for alternative work Employees should be informed about possible redundancies and ensure consultation with employee representatives. When undertaking consultation, employees must be told in writing the following: 1. Reasons for proposed redundancies; 2. The numbers and job roles of those impacted; 3. The selection procedure for redundancy; 4. The period over which redundancies will take effect; 5. How redundancy payments will be calculated. In addition to the consultation requirements, employers have an implied duty to act in good faith towards employees when undertaking redundancy consultation. BIBLIOGRAPHY Jeffery Jupp (2005). Agency Work: A Black Hole. New Law Journal Honeyball & Bowers (2006). Textbook on Labour Law. 9th Edition Oxford University Press. Painter and Holmes., (2006). Cases and Materials on Employment Law. 6th Edition Oxford University Press. Pitt, Gwyneth., (2007). Employment Law. 6th Edition Sweet & Maxwell. Selwyn’s Law of Employment (2006). 14th Edition Oxford University Publishing. Legislation & Websites Equal Pay Act 1970 Trade Union and Labour Relations (Consolidation) Act 1992 Employment Rights Act 1996 Working Time Regulations 1998 Work and Families Act 2006 www.acas.org.uk www.opsi.gov.uk Read More