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CIMA BA4 Fundamentals of Ethics, Corporate Governance and Business Law > Chapter 6 The Law of Employment > Flashcards

Chapter 6 The Law of Employment Flashcards

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1
Q

What are the rules around employment contracts?

A

> Oral or written
Written particulars of main terms supplied to employee within 2 months of commencing employment
If not => employee go to the employment tribunal for a declaration of what terms should be

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2
Q

What are the written particulars that should be included in main terms of contract?

A
  1. Names of employee and employer
  2. Date of commencement
  3. Job title
  4. Notice period
  5. Pay rate and pay intervals
  6. Hours of work, inc normal working hours
  7. Holidays and holiday pay
  8. Arrangements for sick leave, sick pay
  9. Disciplinary and grievance procedures
  10. Social media policy e.g. facebook, twitter etc
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3
Q

What are the common law duties of the employer?

A

Overriding duty of mutual trust and confidence, including:

  • Taking reasonable care of employees
  • Provide a safe system of working
  • Pay employees
  • Indemnify employee against expenses and losses incurred in course of employment
  • Health and safety, select fit and competent fellow workers
  • Provide work where employee paid by reference

NO DUTY TO PROTECT EMPLOYEE PROPERTY, PROVIDE REFERENCES, PROVIDE SMOKING FACILITIES OR FLEXIBLE WORKING

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4
Q

What are the common law duties of an employee?

A

Duty of faithful service including:

  1. Not to compete with employer
  2. Competence to do the job
  3. Obedience
  4. Account for money and property received during course of employment
  5. Reasonable skill and care in job
  6. Not delegate duties without permission
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5
Q

What are the statutory duties of pay?

A
  1. minimum wage
  2. itemised payslip
  3. statutory sick pay, but not sick pay from employer’s own funds
  4. statutory maternity pay (SMP) and paternity pay
  5. SMP if 26 weeks service by 15th week before expected confinement
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6
Q

What are the statutory duties for hours of work?

A
  1. Working time regulations, 48 hour maximum over a 17-week average - employee can opt out
  2. Minimum 28 days’ holiday, mutually convenient time
  3. Minimum 20 minutes rest in 6-hour plus shift, 11 consecutive hours’ rest in 24 hours, 24 hours’ in seven days
  4. Minimum 20 mins rest in 6 hour plus shift
  5. Paid time off for:
    - ante-natal care
    - trade union official performing duties
    - maternity leave
    - paternity leave
  6. can request flexible working arrangements - not unreasonably refused
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7
Q

What does the Health and Safety at Work Act 1974 state?

A

States duties of employers should ensure health & safety of employees:

  1. Statement of policy
  2. Insure against risks
  3. Assess risk
  4. Adequate info, training
  5. Safe systems, equipment and place of work
  6. Adequate access
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8
Q

What can health and safety inspector issues?

A
  1. Improvement orders (work can continue)
  2. Prohibition orders (work must cease)
  3. Criminal Action (but not civil actions)
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9
Q

What is discrimination in law of employment?

A

discriminate on basis of age, sex, gender reassignment, marriage, race, religion, belief, disability
Equality Act 2010 applies

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10
Q

What is discrimination in law of employment?

A

discriminate on basis of age, sex, gender reassignment, marriage, race, religion, belief, disability
Equality Act 2010 applies

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11
Q

What is the termination of contract?

A

Minimum notice to employee one week for every year of service up to 12 yrs. Min employer is one week irrespective of period of employment.

Most employment contracts terminated without breach, e.g. by proper notice

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12
Q

What is wrongful dismissal in the termination of employment with breach?

A

No minimum employment period.

If employer breaches contract => dismissing employee without sufficient notice.

=> Damages calculated by reference to difference between actual and contractual notice period.

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13
Q

What is wrongful dismissal in the termination of employment with breach?

A

No minimum employment period.

If employer breaches contract => dismissing employee without sufficient notice.

=> Damages calculated by reference to difference between actual and contractual notice period.

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14
Q

What is unfair dismissal in termination of employment with breach?

A
  • generally min 24 months employment
  • avoid claim for unfair dismissal - employer must act reasonably.
  • reasonableness includes giving reasons for dismissal
  • fairness depend on size and resources of employer
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15
Q

What are some fo the fair reasons for dismissal?

A
  1. lack of capability
  2. misconduct
  3. theft
  4. bad behaviour
  5. redundancy
  6. statutory restriction on employer or employee
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16
Q

What are some examples of automatically unfair reasons for dismissal?

A 
> compulsory retirement
> attending jury service
> reasons related to trade union membership
> taking steps to avert danger 
> pregnancy
> conviction now spent
> Whistleblowing
> discrimination
No minimum employment period if dismissed for automatically unfair reason
17
Q

What things are excluded from the protection of unfair dismissal legislation?

A
  1. Employed < 24 months
  2. Those who fail to apply to Tribunal within 3 months of dismissal
  3. Those working outside UK
  4. Unofficial strikers
18
Q

What are the remedies for unfair dismissal?

A
  1. Conciliation - employmee must notify ACAS => assess whether matter can be resolved using early conciliation
  2. Reinstatement - taking employees back on identical terms as he was those previously employed on
  3. Re-engagement - taking employee back but in different capacity
  4. Compensation
    a) Basic Award = statutory defined maximum linked to age and service. Treated as statutory redundancy
    b) Compensatory award = based on actual net earnings
    c) Punitive additional award = available if employer fails to comply with order of reinstatement or re-engagement
19
Q

How is a dismissal classified as a redundancy?

A

If it is:

  1. Employer ceased or intends to cease carrying on business
  2. Requirement of business for employees to carry on the work done by the employee have ceased or diminished
20
Q

What are the 3 main reasons for redundancy?

A
  1. Place of Work - if employee’s contract requires them to work at places other than their present place of employment and employer relies on this then NOT classified as redundancy
  2. Job Loss - if A’s job is abolished, A is moved into B’s job and B is dismissed, that is a case for redundancy although B’s job continues. If reorganise business and alters methods so same work done by different means which are beyond capacity of employee, it is not a case for redundancy.
  3. Alternative employment - offer a redundant employee alternative employment for the future. If unreasonably refuses => lose their entitlement to redundancy pay
    - Employee is entitled to a four-week trial period in the alternative employment.
21
Q

How must an employee qualify for redundancy payment?

A
  1. Having been continuously employed for AT LEAST TWO YEARS since becoming 18 years old
  2. Having been dismissed
  3. Reason for dismissal being redundancy

Pay is calc with reference to age, weekly pay and length of service

22
Q

How are disputes dealt with in regards to redundancy?

A
  • Heard by employment tribunal
  • appeals made to Employment Appeal Tribunal
  • Employer expected to act reasonably and follow ACAS code of practice on discipline and grievance
23
Q

What is constructive dismissal?

A

Sometimes an employee may feel they have no option but to resign because of their treatment by their employer.

= Constructive Dismissal

24
Q

What is a breach by employer in constructive dismissal?

A

Employer commits a serious breach of employment contract and employee leaves as a result of the breach => repudiates vital term of contract.

=> employer liable and employee can claim unfair dismissal, showing that:

a) breach was serious
b) employee left because of the breach
c) employee has not waived the breach

Failure to promote employee is NOT constructive dismissal

25
Q

What is summary dismissal?

A

Sometimes employer may have no option but to dismiss someone on the spot, without notice

=> Gross Misconduct: without notice for employee’s serious breach of contract. Employer not liable for breach of contract, though amounts due to date must be paid

26
Q

What is whistleblowing?

A

Information may need to be disclosed in the public interest, where the law or ethical rules have been broken by an organisation.
> Follow the disclosure provisions of the employer
> Assess legal obligation, public impact, seriousness, reliability of info, any reasons for non-disclosure

27
Q

What protection is given to whistleblowers?

A

Protection from e.g. dismissal
Whistleblower must make a qualifying disclosure which is protected
> reveal info of the right type
> reveal info to the right person and in the right way

28
Q

What are the qualifying disclosures for whistleblowers?

A
  • Believe that malpractice is present or will occur, e.g. crime, danger to health or environment
29
Q

How should a whistleblower make a protected disclosure?

A
  1. Make disclosure in good faith
  2. Believe the info is true
  3. Believe making disclosure to the right person
    a) internally first
    b) legal adviser
    c) government minister
    d) professional body/ potentially media
30
Q

What is corruption within law of employment?

A

Abuse of trust for personal gain e.g.

  1. Conflict of interest
  2. Insider dealing
  3. Facilitation payments
  4. Bribery
31
Q

What does the UK Bribery Act 2010 offence?

A
  1. Bribing a person to induce or reward them to perform a relevant function
  2. Accepting a bribe as a reward for performing a relevant function
  3. Using a bribe to influence foreign official to gain business advantage
  4. Failing to prevent bribery within commercial organisation

Facilitation payments = form of bribe.

32
Q

What does the UK Bribery Act 2010 offence?

A
  1. Bribing a person to induce or reward them to perform a relevant function
  2. Accepting a bribe as a reward for performing a relevant function
  3. Using a bribe to influence foreign official to gain business advantage
  4. Failing to prevent bribery within commercial organisation

Facilitation payments = form of bribe.

33
Q

What is the definition of money laundering?

A

a) converting the proceeds of crime into ‘clean’ money
b) => process by which criminal proceeds => converted to legitimate funds & conceal their criminal origins. Even if used to fund terrorism.

34
Q

What are the 3 phases of money laundering?

A
  1. Placement - money from crime is first placed in financial system
  2. Layering - obscuring origin of funds by passing them through complex transactions
  3. Integration - reappear as legitimate money or assets. May be used to buy shares or property
35
Q

What is anti-money laundering?

A

Most institutions required to identify clients and report transactions of suspicious nature/
> ID collected from new clients relating to large transactions
> Appoint money laundering reporting officer (MLRO)
> Money laundering is reasonable suspected an employee must make an internal report to the MLRO. There might be an external report - Suspicious Activity Report (SAR) to the authorities.

  • Accountants should exercise professional scepticism with regards to suspicious activity.
36
Q

What are the data protection principles that apply ‘data processors’?

A

> processed fairly & lawfully
obtained only for specified and lawful purposes
adequate, relevant and not excessive
accurate and up to date
kept no longer than is necessary
processed in accordance with the data subject’s rights
kept secure
not transferred to other countries without adequate protection

CIMA BA4 Fundamentals of Ethics, Corporate Governance and Business Law (7 decks)

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