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EY Accounting - Business Acumen > Module 12 - Employing People > Flashcards

Module 12 - Employing People Flashcards

1
Q

Main types of employment

A

Employees

Workers

Self-employed

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2
Q

Things a business needs to consider if they are going to employ staff

A

Whether business can support the costs

Safe and accessible workplace

Register with HMRC as an employee - set up a Pay As You Earn (‘PAYE’) system

Workplace pensions

Employers liability insurance

Recruitment process

T&Cs

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3
Q

Rights to which an employee is entitled

A

Statutory sick pay

Protection against unfair dismissal

Statutory redundancy pay

Maternity, paternity, adoption and shared parental leave pay

Right to REQUEST flexible working

Rights to preferred payments in event of employers insolvency

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4
Q

What kind of hours can employees work? (Type of hours, not number)

A

Full time

Part time

Temporary

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5
Q

Benefit of zero-hour contract to business

A

Staff on call

No obligation to provide work - good for costs

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6
Q

Benefit of zero-hour contract to employee

A

Don’t have to undertake the work when it is offered

Business cannot stop a zero-hour worker undertaking work elsewhere

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7
Q

Downside of zero-hour to businesses

A

Individuals can refuse offered work

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8
Q

Downsides of zero-hour contracts to individuals

A

Issues obtaining mortgages, loans and even phone contracts

No guaranteed income

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9
Q

What is a worker?

A

Any individual who commits to personally perform any work or services for another party

Whether by way of a contract or other arrangement, but where the work is not on behalf of their own business or under an employment contract

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10
Q

“Workers” are entitled to some rights and protections

A

National minimum wage

Paid annual leave

Rest breaks

Protection against unlawful discrimination

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11
Q

Workers are not entitled to some rights that employees are:

A

Time off for emergencies

Notice periods for termination

No protection against unfair dismissal

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12
Q

If a business hires staff through an employment agency, what will they have to do?

What does this include?

A

Pay an agency fee - includes the workers national insurance contributions and statutory sick pay

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13
Q

If a business hires through an agency, who is responsible for paying the worker? Who has the duty of care for that worker?

A

The agency

(Agency has duty of care for the worker) They also make sure the worker gets their rights under the working time directive

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14
Q

Who is responsible for health and safety of an agency worker?

A

The business

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15
Q

If an agency worker is employed for 12 weeks in the same role, what are they entitled to?

A

The same terms and conditions as someone who is employed directly

Including equal pay and paid annual leave

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16
Q

Why are freelancers distinct from employees?

A

Because they are not performing work under a contract of employment

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17
Q

Why are freelancers distinct from workers?

A

The business will actually be a client to the freelance worker

The freelance worker is providing a service to the business rather than working for the business

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18
Q

Are freelancers self employed?

What are they effectively running?

A

Yes

Effectively running their own business

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19
Q

Is a freelance worker responsible for their own tax affairs?

A

Yes

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20
Q

How may a freelancer be self employed?

A

Either through a sole trader or through a limited company potentially

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21
Q

Are freelancers entitled to the same rights as employees or workers?

A

No

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22
Q

Are freelancers entitled to a minimum wage?

A

No

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23
Q

Is there a responsibility for the business to look after the health and safety of a freelance worker?

A

Yes

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24
Q

Freelancers will typically work under a contract for what?

A

Services

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25
Are there tax advantages for freelancers?
Yes
26
Of the different types of worker, which have the most rights?
Employees
27
What must an employee be provided with? (When joining the business) When must this be provided?
A written statement containing certain terms and conditions of employment An employees first day of employment within the business
28
Do employment contracts include both express and implied terms?
Yes
29
Are express terms specifically stated in the contract of employment?
Yes
30
Express terms may include:
Basic base salary Overtime and bonuses Hours of work Holiday pay Sick pay Any benefits eg medical insurance Notice for dismissal
31
Are implied terms of contract stated in the contract?
No but are tacitly agreed
32
Implied terms may include:
General terms implied into most contracts of employment Terms implied by custom or practice Terms from agreements made with the employer by a trade union or staff association
33
Is an employment contract beneficial for both the employer and employee?
Yes
34
How can an employment contract be beneficial for the employer?
It can help businesses retain its best employees by potential adding terms - to encourage employees to stay Helps business retain important info - in someone’s contract it may say they cannot transfer valuable knowledge to a competitor
35
Why may an employment contract come to an end?
Completion of contract Redundancy Withdrawal of a job Termination by reason of conduct or capability
36
How must employers treat employees who have 2 years’ service in terms of dismissal? What do they need to receive? What act is this due to?
Employee must have a fair reason for dismissal and receive appropriate notice The Employment Rights Act 1996
37
Fair reasons for dismissal for employees with 2 years experience
Redundancy Conduct Capability
38
If an employer doesn’t have fair reason for dismissal and fair process (for the employers longer than 2 year’ service), what can happen?
The employee can successfully challenge the dismissal in the employment tribunal
39
In some instances can ending a contract early be costly and time-consuming?
Yes
40
What is redundancy?
It is where the specific role in an organisation becomes redundant rather than the individual
41
Can redundancies be voluntary or involuntary? When would voluntary redundancy be considered by an employer?
Yes Prior to considering non-voluntary
42
What rights are eligible employees entitled to in the event of a redundancy?
Redundancy pay Reasonable time off to look for a new job or arrange training Not to be unfairly selected for redundancy
43
Should an employer try to find other suitable employment within the business for an employee whose role is being made redundant
Yes
44
Is it possible for to allow an employee to try out another role for four weeks (or more if agreed in writing) without them giving up their right to redundancy pay
Yes
45
Considerations for fairly selecting staff for redundancy:
Skills, qualifications and aptitude Standard of work or performance Attendance Disciplinary record
46
Unfair selection criteria for redundancies would include:
Pregnancy, age or disability Protected characteristics under the Equality Act 2010 Other criteria would include: Membership or non-membership of a trade union Whistle blowing Health and safety activities
47
If a business is making 20 or more people redundant within any 90-day period, there are collective consultation rules to be followed
Notify the Redundancy Payments Service (‘RPS’) before it starts Consult trade union representatives (or relevant person) Provide info to the staff about the planned redundancies and sufficient time to consider proposals Respond to any further questions Issue redundancy notices once the consultation process is complete
48
Are there set rules when there are fewer than 20 redundancies?
No But it’s good practice to consult employees
49
Are employees entitled to Statutory Redundancy pay?
If they meet certain criteria
50
Statutory redundancy is based on?
Employees age and length of services and counts back from the date of dismissal
51
Do employees with two years service have the right to raise an unfair dismissal claim, even if the contractual termination clause has been complied with?
Yes
52
If employees of less than two years are dismissed can they have potential claims in an employment tribunal? E.g?
Yes Eg whistleblowing / discrimination
53
What is a frustration contract in employment contracts
Unforeseen events make it impossible for one or both parties to fulfil the contract Eg sent to prison
54
What are vitiation factors of a contract?
Vitiation factors are those which will invalidate the contract
55
Examples of vitiation factors
Misrepresented information Mistake Duress Incapacity Illegality
56
Is vitiation of an employment contract rare?
Yes, extremely
57
What is repudiation of contract
A breach that is sufficiently serious that it renders the contract essentially useless and therefore entitled the innocent party to terminate the contract Eg employee being refused entry into the building they work from
58
Do businesses need to make sure they’re compliant with data protection legislation?
Yes
59
Which act enforces data protection in the UK?
the Data Protection Act 2018 (‘DPA’)
60
What does the Data Protection Act 2018 implement
The General Data Protection Regulation (‘GDPR’)
61
How did GDPR come about in the UK?
It was a European directive that was incorporated into UK legislation at the end of the transition period following the UK’s withdrawal form the EU
62
Is the UK now responsible for updating its own legislation surrounding GDPR?
Yes
63
Is anonymised data covered under DPA / GDPR rules?
No No traceability back to the individual or entity
64
A business must ensure that where they control personal information, they meet a set of principles laid out in the legislation which requires that information must be:
Processed lawfully and fairly Obtained for specific and lawful purpose Adequate, relevant and not excessive Accurate and, where necessary, kept up to date Processed in accordance with the rights of data subjects Information must not: Kept for longer than necessary Transferred out of European Economic Area (‘EEA’) (unless recipient country has adequate laws)
65
Remedies available for people if they wish to complain about the way that their data has been processed
They must raise the issue with business processing the data If matter is not resolved, they can go to the Information Commissioner’s Office (‘ICO’)
66
The ICO have the powers to investigate and sanction employers / businesses and include fines of up to
€20 million or 4% of annual worldwide turnover (whichever is higher)
67
Does the ICO have powers to search premises and order the rectification or destruction of inaccurate data and issuing information and enforcement notices?
Yes
68
Is slavery illegal everywhere?
Yes
69
Are all commercial organisations with a turnover of £36 million, or more, required to produce an annual Slavery and Human Trafficking Statement?
Yes
70
What does an annual slavery and human trafficking statement set out?
The steps they have taken to prevent modern slavery in any part of their business and supply chain
71
Does legislation on Modern Slavery apply in Scotland the same as in England?
Yes
72
A modern slavery statement should discuss the following:
Commitment to tackling slavery Organisational structure and supply chains Who has responsibility for anti-slavery initiatives Provide links to relevant internal policies and procedures relevant to modern slavery Supplier due diligence carried out Overview of KPIs in relation to modern slavery Staff training on modern slavery Flag up any awareness-raising programmes
73
Is it compulsory for a business to ensure that it meets minimum wage requirements for its workers?
Yes
74
Does minimum wage apply a to casual, part time and temporary workers?
Yes
75
Are there different rates of minimum wage in the UK? Depending on what?
Yes Depending on age / apprentice
76
What is the National Minimum wage? (Description not number)
The minimum wage a worker aged 24 and under is entitled to
77
Workers aged 25 and over are entitled to
The National Living Wage (really just another name for the National Minimum Wage)
78
Is the National Living Wage and the Real Living Wage the same thing?
No
79
What is the Living Wage set at?
The cost of living
80
Benefits of paying the Living wage
More motivated staff Better staff retention Lower recruitment costs
81
The rate apprentices are entitled to depends on what?
Their age and how far through their apprenticeship they are
82
Apprentice amount paid is reviewed annually and the government takes advice from who?
The Low Pay Commission
83
What is the premise of human rights? What are human rights based on?
There are fundamental rights to which an individual is entitled simply because they are a human being They are based on dignity and respect
84
Human rights include:
Right to life Freedom from slavery and forced labour Freedom from torture and inhuman or degrading treatment Right to a fair trial Freedom of expression
85
The United Nations created a declaration of human rights, is it legally binding?
No
86
The European Convention on human rights (ECHR) is based on what?
The United Nations declaration
87
Is the ECHR legally binding?
Yes
88
In the UK, the ECHR is enacted into legislation by
The Human Rights Act 1998
89
The Equality Act 2010 protects the rights of individuals and advances equality of opportunity for all. It prohibits discrimination on the bases of ‘protected characteristics’, such as:
``` Age Race Gender Sexual Orientation Religion or Belief Disability Marriage / Civil Partnership Gender reassignment Pregnancy / Maternity ```
90
What is the purpose of a covenant?
To restrict the activity of former employees in order to protect the business’s legitimate business interests Like document received when leaving Vivid (can’t join another competitor in X months)
91
Are restrictive covenants required to be set out in writing and signed by both parties? If so why?
Yes To give them the best chance of being enforced
92
What are the main types of restrictive covenant used in employment contracts?
Non-solicitation clauses Non-poaching covenants Non-dealing clauses Non-competition clauses
93
How does a non-solicitation clause work (restrictive covenants)
Prevents the employee approaching clients/customers/suppliers of the former employer for business
94
How does a non-poaching covenant work (restrictive covenant)
Prevents an employee poaching former colleagues
95
How does a non-dealing clause work (restrictive covenant)
Prevents a former employee from dealing with former clients’ customers/suppliers (this is regardless of which party approached the other)
96
How does a non-dealing clause work (restrictive covenant)
Prevents a former employee from dealing with former clients’ customers / suppliers (this is regardless of which party approached the other)
97
How does a non-competition clause work (restrictive covenant)
Restricts the former employee working in similar employment for a competitor
98
For the best chance of being able to enforce restrictive covenants, an employer should only restrict for a reasonable:
Time scale (longer than 6-12 months is difficult to justify and wouldn’t hold up in court) Geography
99
What is often used alongside restrictive covenants?
Garden leave
100
Including a garden leave clause within a contract of employment means what?
The employee is required to spend all or part of their notice period at home (whilst receiving full salary and benefits)
101
What does a garden leave clause prevent?
The employee from starting employment with another company (or competitor)
102
Why would a company do garden leave
The employee would no longer have access to company information or systems Therefore, by the time their garden leave has ended, it is possible that any information they have in the company will be out of date
103
What must be provided within the employees contract of employment for the company to be able to place an employee on garden leave?
An express clause
104
What is an agent?
An agent facilitates and arranges sales for good and services Does not take title in goods, unlike retailers or wholesalers They are paid a commission on the sales they make Eg travel agents / recruiters

EY Accounting - Business Acumen (16 decks)

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