Core Statutes That Offer Employee Protection from Subjection to Unfair Working Terms and Conditions - Case Study Example

Employment Law Introduction UK employment law has been constituted by several statutes that all attempt to represent the interests and safeguard the rights of employees. To ultimately do this, a specified definition of whom and what defines an employee was important (Burchell et al., 1999, p.10). The Employment Rights Act 1996 defines an employee as an individual who has entered to a contract of employment. This statute only identifies the interests of only those persons that are currently engaged in contractual terms with an employer. On the contrary, another statute, the ERA 1996 represents in general the interests of employees, ex-employees and other individuals that are not incorporated under the Employment Rights Act 1996. These statutes give provisions to employees in contract either written or unwritten. ERA 1996 identifies persons working on casual basis as employees. Such individuals are therefore protected by the provisions of the act (Bell & La Valle, 2003). Issue 1 Redundancy payment Over a significant period of time, employee protection by UK employment law faced radical criticism about its general provisions and the right that have been granted to employees by the law. The definition and differentiation between an independent worker and an employee was critical if refining these provisions was anything to go by (Weir, 2003). It was argued that there stands minimal difference between independent employee and employees regarding the contributions to the country’s economy and therefore they should be subjected to equal rights and protection (Weir, 2003). This argument was fortified by the fact that the statutes that had been put in place imposed different income taxes on these two different groups of workers. The court system had a hard time in determining who is to be identified as an employee and who is not. This ideally led to the creation o the “Test Table” that helps in defining and differentiating these two groups of workers. The table appears as below: Table 1: Tests showing differences between self employed and employed used’ Test Factors Control – defines who is controls different tasks Has to obey orders, discretion made supervisory mode of working or hours of work Integration – defines the integration between work and business Presence of disciplinary procedures in occupational benefit schemes. Economic Reality – shows any financial risk that exist. The mode of payment used, right to hire others and provision of own equipments including coverage of holiday and sick pay. Mutuality of Obligation: does any evidence showing formal subordination to contract terms exists? The terms and condition of employment including the duration of employment. Burchell et al (1999, p.11) To define an employee, the courts used the test table to outline and substantiate the dependency level of the worker to the employer. The judiciary held the discretion and thereof the decision was subject to personalization by the judge. As Janice (2011) identifies, the applicability of the test however remained questionable and as per say, the mutuality of obligation tests more or less classifies temporary employees as self-employed. It also exemplifies inconsistency between employment law and tax law. This is because, many of the times the tests are gratified by employment law than tax laws and this tends to align legal framework directed against tax regulations (Lockton, 2010). In the matters, that defines this issue and as per the provisions outlined in the employment law statutes, the drivers have a stand to plead for compensation and redundancy payment. Despite the fact that the companies views them as self-employed and therefore have no right to request for redundancy payment, the degree of dependency is quite significant and that can grant them favour before a tribunal against the company (Janice, 2011). The main issue here stands that the driver’s dependence on the employer is significant, for instance, the drivers do not drive their own vehicles rather, the vehicles are owned solely by the company. In addition, the company services the vans and has as well insured them in block. It is the company that can only decide to replace the vans by selling the old ones and bringing in new ones and this again the company does at its own convenience without intervention from these drivers. Lockton (2010) explains that, the employment law statutes and in specific the ERA 1996 recognizes a worker as employed regarding the applicability of the Test Table and it doesn’t have to be necessarily written contractual terms. This argument therefore holds that these drivers will be identified as employees of the company irrespective of the company policy. The company will therefore be held responsible of dismissing the employees and will b required to compensate them. A similar redundancy case was filed following company failure of compensation to the employees i.e. Johnson v Shamrock Franchise Management Ltd (2010). In this case the employment tribunal ruled that the employer had bleached the contract as provided under the ACAS code of practice and disciplinary and grievance procedure. Following this line of argument, the tribunal is going to recommend a redundancy payment according to the laid out schemes of compensation. If the company is unwilling to compensate the drivers as per its scheme of redundancy payment, the tribunal has established a payment scheme which provides that the dismissed employee should receive: Half of what he was getting weekly for each year under 22. The pay one was getting weekly for each year in which they were over 22, but under 41 One and a half of the pay one was getting weekly for each year in which the employee was over 41 years of age; (Law on the Web, 2011). Regarding all these factual matters, I do believe that the company may incur losses bearing in mind that its policy does not allow for redundancy payment for the drivers since they are taken as self-employed contractors. My advice would be that the company resolves the underlying misunderstandings that have currently emerged so that the company will not have to dismiss these drivers. Secondly, I would advise the company management to review the company policies and clearly outline the roles and obligations of the drivers taking into consideration the legal reforms that have been put in place (Weir, 2003). The policy should coincide with the interests of the company so that the issue of redundancy payment may be clearly defined as to which employees will be compensated. This is because the employment tribunal will overrule the company’s policy once the person in question is identified as an employee based on the dependence of this worker on the employer (Pitt, 2009). This will help the company’s management to include in the budget any compensation that they may be required to make on their employees. Issue 3 Unfair dismissal UK employment law continually discourages employers from dismissing employees unfairly. The statutes have identified relevant provisions that protect employees from such uncouth behavior by some employers (Weir, 2003). It is required that if an employer for whatever reason has to dismiss an employee, this has to be done systematically and should be in line with the provisions that has been established by employment law (Pitt, 2009). Constructive dismissal which is said to be a bleach of contract is illegal as evidenced by the following phenomenon: Falsely accusing an employee of misconduct. changing the job location at short notice harassment or victimization of particular members of staff alteration of the employee’s job specification or contract terms without consultation excessive disciplinary actions such as demotion (Law on the Web, 2011). Employment tribunal once they identify a dismissal claim by an employee as unfair, the employer is liable for compensating the employee a maximum compensatory reward of up to £65, 000 plus a basic award of up to £11, 400 (Law on the Web, 2011). Regarding the three warehouse operators, am going to refer to a case i.e. Cogger v Nationwide Building Society (2010). Employment tribunal ruled over the matter and identified that the company failed to conclusively investigate over the alleged theft case by the employees. This led to the employees filing a case against the company as per the provisions of the Employment Relation Act 1999 (TUC, 2000a). The employment tribunal identified the action of the company as unfair dismissal as they did not follow the laid procedure of investigating the matter and filling enough evidence that the employees were responsible for the alleged theft (Taylor & Astra 2009). Categorically, as far as this issue is concerned, I believe that the three warehouse operatives had some information about the losses that had been on the increase lately. It is either that they were involved in the loss directly or they facilitated the loss. However, there remains substantial ground that the company has done less than it should have done in investigating this whole issue (Taylor & Astra 2009). A mere interview by Sarfraz is not enough and there is speculation of the three involvement regarding the losses as per the information that Stewart gives. If the company felt that they needed to look into the matter, they should have suspended all the warehouse operatives. Suspending Stewart and allowing both Pavel and Graham to continue with work is unfair to one party. More often than not, it is to be expected that many suspects of such issues like theft are not ready to own up the allegations. In this regard, the company actions depending on the first information received from the suspect is somehow biased and subjective (Taylor & Astra 2009). The company realistically knows that Steward could not have been responsible for all the losses but they continue to dismiss him while they retain Pavel and Graham. Based on the information they have about the three employees and the fact that Stewart has by far attained the best performance record, the company should have known better. I don’t want to sideline with any of these three workers but I would advise the company to set up an investigative council that will coherently look into the matter. This will protect the company against subjection of compensating the employees on the basis of unfair dismissal (Weir, 2003). Once the investigation have identified the grounds of the theft allegations, then the company can dismiss the employees because the law identifies that dismissal of employee for law breaking as fair and so they are not entitled to any compensation (Taylor & Astra 2009). If the three employees are found guilty of the allegations, the law requires the company to dismiss the employee and retaining them will be considered illegal. However, since the company wants to retain Stewart, they can hire him on completely different contractual terms. Otherwise, if the company goes ahead and dismisses Pavel and Graham on the current standings and without conducting a clearly developed investigation, then the two employees can file a claim for unfair dismissal and the company may be held liable to compensate the two as per the provisions of employment law (Janice, 2011). If this happens, and it is important to mention here that it is very likely, then the company may be subjected to compensatory awards amounting up to £76, 400 per employee (Law on the Web, 2011). Therefore the company should consider the consequences of the actions and comply with this advice or else they may incur unfair dismissal claims in an employment tribunal if it has to go on with the proposed disciplinary/dismissal actions. Conclusion UK employment law represents core statutes that offer employee protection from subjection into unfair working terms and conditions. The achievements that have been accorded to these statutes cannot be overemphasized. Employee’s interests have effectively been described and better working environment and remuneration terms have been achieved. Considering that many employers earlier on subjected employee to very unfavorable payment and working terms, we cannot fail to acknowledge what the employment tribunal have brought forth (Janice, 2011). Employee representation has continually been refined by the various established statutes whish all aim at presenting the best working environment for employees in UK. Such statutes include the National Minimum Wage Act 1998, Working Time Regulations Act 1998, The Employment Relation Act 1999, Sex Discrimination Act 1975, The Equal Pay Act 1970, Employment Equality Regulations 2003, Employment Rights Act 1996, Protection from Harassment Act 1997, EC Equal Treatment Directive 76/207 and The Race Relations Act 1976 (TUC, 2000a). References Bell, A. and La Valle, I 2003, Combining self-employment and family life, The Policy Press. [Online] Available at: [Accessed 17 December 2011]. Burchell, B., Deakin, S and Honey, S 1999, The employment status of individuals in non- standard employment. Department of Trade and Industry. Cogger v Nationwide Building Society [2010] ET/1102875/2009 Janice, N 2011. Employment Law for Business Students. 4th ed. Cambridge: Pearson. Johnson v Shamrock Franchise Management Ltd (2010) ET/3500757/10 Law on the Web. (2011). Employment Law. [Online] Available at : [Accessed 17 December 2011]. Lockton, D 2010. Employment Law. 7th ed. London: Palgrave Macmillan. Pitt, G 2009. Employment Law. London: Thomson Publishers Taylor, S., & Astra, E 2009. Employment Law: An Introduction . 2nd ed. Oxford: Oxford University Press. TUC, 2000a, Working Time Regulations - Congress motion, [online] Available at: [Accessed 17 December 2011]. Weir, G 2003, Self-employment in the UK Labour Market. Labour Market Trends, 111(9), pp.10-11. Read More