12: Employment Law

Question 1

The two types of working relationship?

Answer 1

Employee
- working under a contract of service

Self-employed (independent contractor)
- works under a contract for services

Question 2

Tests to determine is an employment relationship exists (contract of service)?

Answer 2

These three elements must be present:

• worker must have agreed to perform work themselves unless employee expressly agrees to delegation
• element of control exercised by employer
• mutuality of obligations. Employer obliged to provider work or payment, and employee obliged to perform said work

Question 3

If three elements of employment relationship are present, is the individual definitely an employee?

Answer 3

Not necessarily! Courts will consider:

• if free to delegate: self employed
• hours and payment are irregular: self employed
• employer provides tools, equipment and uniform: employment
• employer provides support staff: employment
• if paid net of tax: employment
• if exclusivity in contract: employment

Label applied by the parties does not define the relationship

Question 4

What do employees get that self-employed do not get?

Answer 4

• statutory protection
• implied terms (ie. duty of obedience)
• employer is vicariously liable for the acts of employees in course of the business
• employee is a preferential creditor on insolvency (self-employed is ordinary unsecured creditor)
• employee gets pay net of income tax and NICs under PAYE (self-employed are trading income)
• certain benefits only available to employees

Question 5

What is the third category of employment?

Answer 5

Worker

Group that fall short of being recognised as employees, but still provide work for an organisation, so not self-employed

Some protection to workers
- payment of minimum wage
- minimum amount of paid leave

Not others!
- protection against unfair dismissal
- right to request flexible working

Question 6

How are the most basic rules of an employment contract different?

Answer 6

They’re not!

Like any other contractual relationship

Basic rules apply, and standard elements of agreement, consideration and intention must be present

Can sue on breach

Terms are express or implied

Question 7

What are the express terms of an employment contract?

Answer 7

Agreed by the parties themselves

Agreement is written or oral

Change in terms requires consent of both parties, unless made by legislation

Express term sometimes gives employer right to vary terms. Must be reasonable!
- ie. Mobility clause

Question 8

What written particulars must be included in a contract?

Answer 8

Employee Rights Act 1996 requires this, must be provided on or before first day of employment

• name of employee and employer
• pay rates and interval
• job title
• hours of work
• date employment commences
• if any service with previous employer counts towards continuous employment

These instead be referenced on where to find them:

• notice period
• holiday or sick pay
• pension
• grievance and disciplinary procedures

These do not constitute contract but provide evidence of contents of contract

Question 9

What terms are implied by courts?

Answer 9

Implied duties or employer and employee!

Question 10

Six implied duties of the employee?

Answer 10

Obey lawful and reasonable orders
- if your employer asks you to do something legal and reasonable, do it!

Give honest and faithful service
- duty of fidelity. ie cannot work for competitor!

Exercise reasonable care and skill
- single act of negligence wont dismiss you but gross negligence will
- also duty to indemnify employer for damages as a result of employee’s negligence (have to pay employer)

Not to misuse confidential information
- do not disclose trade secrets
- or misuse confidential info
- continues after employment has ended

Give personal service
- has to carry out work personally
- or has express or implied permission to delegate

Mutual co-operation
- mutual obligation imposed on both parties
- respect and consideration for each other

Question 11

Implied duties of the employer?!

Answer 11

• pay reasonable remuneration
• indemnify employees for properly incurred expenses
• take reasonable care for employees safety
• give reasonable notice for termination
• maintain mutual co-operation, trust and confidnece
• provider work (or pay)
• observe sustainability regulations

Do not have to:
- provide references (but must be truthful if so)

Question 12

The 5 terms implied by statute?

Answer 12

Pay

Health and Safety

Social security law

Equality Act 2010

Notice

Question 13

How is pay implied by statute?

Answer 13

Minimum wage!

Also holiday and sick leave

Equality clause is implied into all contracts, if employees of opposite sex to same job or different job of equal value

Question 14

How is H&S implied by statute?

Answer 14

HASWA1974 imposes:

All employers required, so far as reasonably practicable, to ensure H, S and welfare of employees. Includes:

• provision and maintenance of plant and systems to make them safe
• arrangements for safe use, handling storage and transport of articles and substances
• information, training and supervisoon
• maintenance of safe places of work
• provision and maintenance of a safe working environment

Breach: criminal offence. Up to 2 years prison and unlimited fine

Question 15

How is social security law implied by statute?

Answer 15

Different laws including:

• obligation to pay Class 1 NICs
• flexible working requests must be considered and not unreasonably refused
• ante-natal care
• maternity/paternity leave and pay
• parental leave and pay
• parental bereavement leave

Question 16

How is Equality Act 2010 implied by statute?

Answer 16

Employees have right not to be discriminated against due to a ‘protected characteristic’

Covers all terms of contract: pay, hours, etc

Protected characteristics are:
- age
- disibility
- sex (orientation and reassignment)
- race (colour, nationality and ethnicity)
- religion or belief
- marriage or civil partnership
- pregnancy or maternity

Question 17

When can employers avoid the Equality Act 2010?

Answer 17

If they can prove their actions were a ‘proportionate means of meeting a legitimate aim’

Aims include: H&S, specific training requirements

Proportionate: discriminatory effect is significantly outweighed by benefits of achieving aim.

If aim can be achieved with less discrimination, that should be followed!

Question 18

How is notice implied by statute?

Answer 18

Minimum notice by employer depends on continuous employment period:

1 month to 2 years: not less than one week

2 years to 12 years: not less than one week for each year of employment
- 1 week x years of employment

From 12 years: 12 weeks

Minimum notice by employee: 1 week, if worked there for 4 weeks

Normally a matter of negotiation, but can never be less than these statutory minimums

Question 19

What is unfair dismissal regulated by?

Answer 19

The Employment Rights Act 1996

Updated by Employment Act 2008

Both provide statutory protection

Claims brought before employment tribunal

Question 20

Who cannot claim for unfair dismissal?

Answer 20

Excluded employees

Certain categories who are excluded

• persons employed to work outside GB
• employees dismissed while on unofficial strike or other industrial action

Question 21

Who can claim for unfair dismissal?

Answer 21

Those who have been continuously for at least two years, part time or full time

No requirement for this if dismissal is automatically unfair!

Possible to exclude certain weeks in continuous employment, such as time on strike or service in armed forces

If business is transferred, does not break continuity

Question 22

What must the employee show for unfair dismissal?

Answer 22

• they were a qualifying employee
• they were dismissed

Question 23

When can an employee make a claim for unfair dismissal?

Answer 23

Claim must be made to Employment Tribunal within 3 months of date of termination

Date of termination is:

• if termination given by notice, day the notice expires
• if no notice, day termination takes effect
• if fixed term contract not renewed, date on which fixed term expires

Question 24

What are the three types of dismissal?

Answer 24

Termination of a contract by the employer (with or without notice)

Expiration of a fixed term contract

Constructive dismissal

Question 25

What is constructive dismissal?

Answer 25

An employee terminates the contract by reason of the employee’s conduct

Employee’s conduct must be sufficiently serious for an employee to have to leave at once

If they continue, they could be seen as affirming the contract, which could make them lose the right to treat themselves as dismissed

Question 26

How is it determined whether a dismissal has occurred?

Answer 26

Each case is viewed on its own facts

Employees that has been employed for at least two years can write a written statement giving reasons for dismissal within 14 days

Question 27

What is NOT a dismissal?

Answer 27

• employee resigns (unless constructive dismissal)
• contract is frustrated
• parties come to a mutual agreement

Question 28

What are the automatically unfair reasons for dismissal?

Answer 28

Victimisation of H&S complaints or whistle-blowers

Pregnancy or using maternity leave

Trade union membership and activities

Assertion of statutory right

Spent conviction

Taking steps to protect themselves in imminent danger

Transfer of an undertaking

Question 29

How does an employer demonstrate that a dismissal was fair?

Answer 29

They have to show:

• principal reason for dismissal
• that the reasons was one of more of the statutory fair reasons in ERA1996
• that they acted reasonably

Question 30

What are the 5 statutory fair reasons for dismissal?

Answer 30

Capability or qualifications of employee
- lack of either for performing the work

Conduct
- guilty of misconduct
- ie. abusive language, drink and drugs, etc

Redundancy
- can be unfair if employee was selected in breach of customary arrangements or because they are connected with trade union membership

Statutory restriction
- prevents employment being lawful
- ie. Professional forgets to renew certificate

Some other substantial reason
- ie. Conflict of interest
- conviction of offence involving dishonesty

Question 31

How does a tribunal decide if an employer acted ‘reasonably’?

Answer 31

On the basis of equity and substantial merits of the case, did the employer act reasonably?

Reasonableness test involves two questions:
- was the reason sufficiently serious to justify dismissal?
- did the employer adopt reasonable procedures in coming to decision and manner of decision?

Question 32

Examples of when an employer is NOT reasonable with an unfair dismissal?

Answer 32

Employee is dismissed without warning

If dismissal on grounds for capability and the employer did not allow time for improvement, training and consultation

If dismissal on grounds of ill health, must be proper medical evidence

If misconduct, employer must fully investigate complaint and listen to employee by way or explanation and mitigation

Question 33

What is procedural irregularity?

Answer 33

Dismissal may be unfair if it was carried out in breach of any procedures relating to workplace dispute resolution

If this happens, tribunal may increase award up to 25%

May reduce award by 25% if unreasonable failure by employee

Question 34

Three remedies for unfair dismissal?

Answer 34

Reinstatement
- employee may return to old job, if it is their wish to do so

Re-engagement
- employee offered new job with comparable terms and seniority
- not given if there is a breakdown in confidence between two parties

Compensation
- usual remedy
- three types: basic, compensatory and additional

Question 35

What are three types of compensation award?

Answer 35

Basic award
- depends on: age, pay, length of continuous service
- amount is reduced if employee caused or contributed to dismissal
- award made regardless of loss suffered by employee, no duty to mitigate

Compensatory award
- discretionary
- amount that is just and equitable in regards to the employee’s losses
- up to statutory maximum
- assess on principals of damages

Additional award
- made if order for reinstatement or reengagement is ignored
- grounds of discrimination
- automatically unfair dismissal

Question 36

How is wrongful dismissal different from statutory dismissal?

Answer 36

Wrongful dismissal - common law concept
- employees get normal protection and remedies under common law

Can be County or High Court, or Employment Tribunal again

Claim for damages in wrongful dismissal might be preferable to damages for unfair dismissal

Question 37

When might a claim for wrongful dismissal be preferable to a claim for unfair dismissal?

Answer 37

When damages sought exceed statutory minimum for unfair dismissal

Where deadline for commencing unfair dismissal claim has passed
- wrongful dismissal can be brought within 6 years of breach

When dismissal is fair, but insufficient notice is given

Employee lacks two years continuous service

Question 38

What is wrongful dismissal?

Answer 38

When the employee is dismissed in beach of contract

Question 39

What is summary dismissal?

Answer 39

Dismissal without the required notice period. Held to be wrongful unless:

• due to a fundamental/serious breach by employee
• employee accepted shorter notice

Also occurs when employer is unable to continue employing the employee, where:
- personal employer dies
- partnership dissolved
- company wound up

Question 40

Termination without notice by employee?

Answer 40

Repudiates contract by leaving

Breach unless:
- employer has wrongfully repudiated contract
- employee accepts the breach by leaving

Question 41

When is expiry of a fixed term wrongful dismissal?

Answer 41

If employee is dismissed before the expiry of the term

If employee is employed to perform a task and is dismissed before the completion of that task

Question 42

Remedies for wrongful dismissal?

Answer 42

Normal remedy will be damages
- based on loss of earnings suffered

Employee is under duty to mitigate a loss
- alternative work must be sought in the intervening period

If damages are not adequate
- court may award an injunction to prevent breach of contract
- like never happens

Question 43

What is redundancy?

Answer 43

If dismissal is wholly or mainly attributable to the fact that:

• employer has ceased to carry on business for the purpose or in the place on contract
• requirements for that business to carry out work of a particular kind or in particular place have ceased or diminished

Question 44

When is there not a redundancy situation?

Answer 44

When then the transfer of location is reasonable

Or

When the contract gives them the employer an express or implied right to move the employee from one place to another

Question 45

How should a person claim a redundancy payment? And conditions?

Answer 45

Person must:

• have been continuously employed for two years
• apply to employee tribunal within six months of dismissal
• prove they were dismissed, laid off or kept on short time for at least four consecutive weeks

Question 46

Define laid off and short time?

Answer 46

Laid off: employee earned nothing in that particular week

Short time: earned less than half of a normal week’s pay

Question 47

When is there no entitlement to a redundancy payment?

Answer 47

If the employee is:

• guilty of misconduct which would justify dismissal
• made a reasonable offer of a renewed contract
• made an offer of suitable alternative employment in the same capacity, which they unreasonably refuse

If the latter, employee can have four-week trial period, from end of previous job