Module 12 - Employing People Flashcards
Main types of employment
Employees
Workers
Self-employed
Things a business needs to consider if they are going to employ staff
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
Rights to which an employee is entitled
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
What kind of hours can employees work? (Type of hours, not number)
Full time
Part time
Temporary
Benefit of zero-hour contract to business
Staff on call
No obligation to provide work - good for costs
Benefit of zero-hour contract to employee
Don’t have to undertake the work when it is offered
Business cannot stop a zero-hour worker undertaking work elsewhere
Downside of zero-hour to businesses
Individuals can refuse offered work
Downsides of zero-hour contracts to individuals
Issues obtaining mortgages, loans and even phone contracts
No guaranteed income
What is a worker?
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
“Workers” are entitled to some rights and protections
National minimum wage
Paid annual leave
Rest breaks
Protection against unlawful discrimination
Workers are not entitled to some rights that employees are:
Time off for emergencies
Notice periods for termination
No protection against unfair dismissal
If a business hires staff through an employment agency, what will they have to do?
What does this include?
Pay an agency fee - includes the workers national insurance contributions and statutory sick pay
If a business hires through an agency, who is responsible for paying the worker? Who has the duty of care for that worker?
The agency
(Agency has duty of care for the worker) They also make sure the worker gets their rights under the working time directive
Who is responsible for health and safety of an agency worker?
The business
If an agency worker is employed for 12 weeks in the same role, what are they entitled to?
The same terms and conditions as someone who is employed directly
Including equal pay and paid annual leave
Why are freelancers distinct from employees?
Because they are not performing work under a contract of employment
Why are freelancers distinct from workers?
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
Are freelancers self employed?
What are they effectively running?
Yes
Effectively running their own business
Is a freelance worker responsible for their own tax affairs?
Yes
How may a freelancer be self employed?
Either through a sole trader or through a limited company potentially
Are freelancers entitled to the same rights as employees or workers?
No
Are freelancers entitled to a minimum wage?
No
Is there a responsibility for the business to look after the health and safety of a freelance worker?
Yes
Freelancers will typically work under a contract for what?
Services
Are there tax advantages for freelancers?
Yes
Of the different types of worker, which have the most rights?
Employees
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
Do employment contracts include both express and implied terms?
Yes
Are express terms specifically stated in the contract of employment?
Yes
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
Are implied terms of contract stated in the contract?
No but are tacitly agreed
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
Is an employment contract beneficial for both the employer and employee?
Yes
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
Why may an employment contract come to an end?
Completion of contract
Redundancy
Withdrawal of a job
Termination by reason of conduct or capability
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
Fair reasons for dismissal for employees with 2 years experience
Redundancy
Conduct
Capability
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
In some instances can ending a contract early be costly and time-consuming?
Yes
What is redundancy?
It is where the specific role in an organisation becomes redundant rather than the individual
Can redundancies be voluntary or involuntary?
When would voluntary redundancy be considered by an employer?
Yes
Prior to considering non-voluntary
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
Should an employer try to find other suitable employment within the business for an employee whose role is being made redundant
Yes
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
Considerations for fairly selecting staff for redundancy:
Skills, qualifications and aptitude
Standard of work or performance
Attendance
Disciplinary record
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
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
Are there set rules when there are fewer than 20 redundancies?
No
But it’s good practice to consult employees
Are employees entitled to Statutory Redundancy pay?
If they meet certain criteria
Statutory redundancy is based on?
Employees age and length of services and counts back from the date of dismissal
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
If employees of less than two years are dismissed can they have potential claims in an employment tribunal?
E.g?
Yes
Eg whistleblowing / discrimination
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
What are vitiation factors of a contract?
Vitiation factors are those which will invalidate the contract
Examples of vitiation factors
Misrepresented information
Mistake
Duress
Incapacity
Illegality
Is vitiation of an employment contract rare?
Yes, extremely
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
Do businesses need to make sure they’re compliant with data protection legislation?
Yes
Which act enforces data protection in the UK?
the Data Protection Act 2018 (‘DPA’)
What does the Data Protection Act 2018 implement
The General Data Protection Regulation (‘GDPR’)
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
Is the UK now responsible for updating its own legislation surrounding GDPR?
Yes
Is anonymised data covered under DPA / GDPR rules?
No
No traceability back to the individual or entity
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)
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’)
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)
Does the ICO have powers to search premises and order the rectification or destruction of inaccurate data and issuing information and enforcement notices?
Yes
Is slavery illegal everywhere?
Yes
Are all commercial organisations with a turnover of £36 million, or more, required to produce an annual Slavery and Human Trafficking Statement?
Yes
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
Does legislation on Modern Slavery apply in Scotland the same as in England?
Yes
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
Is it compulsory for a business to ensure that it meets minimum wage requirements for its workers?
Yes
Does minimum wage apply a to casual, part time and temporary workers?
Yes
Are there different rates of minimum wage in the UK?
Depending on what?
Yes
Depending on age / apprentice
What is the National Minimum wage? (Description not number)
The minimum wage a worker aged 24 and under is entitled to
Workers aged 25 and over are entitled to
The National Living Wage (really just another name for the National Minimum Wage)
Is the National Living Wage and the Real Living Wage the same thing?
No
What is the Living Wage set at?
The cost of living
Benefits of paying the Living wage
More motivated staff
Better staff retention
Lower recruitment costs
The rate apprentices are entitled to depends on what?
Their age and how far through their apprenticeship they are
Apprentice amount paid is reviewed annually and the government takes advice from who?
The Low Pay Commission
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
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
The United Nations created a declaration of human rights, is it legally binding?
No
The European Convention on human rights (ECHR) is based on what?
The United Nations declaration
Is the ECHR legally binding?
Yes
In the UK, the ECHR is enacted into legislation by
The Human Rights Act 1998
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
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)
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
What are the main types of restrictive covenant used in employment contracts?
Non-solicitation clauses
Non-poaching covenants
Non-dealing clauses
Non-competition clauses
How does a non-solicitation clause work (restrictive covenants)
Prevents the employee approaching clients/customers/suppliers of the former employer for business
How does a non-poaching covenant work (restrictive covenant)
Prevents an employee poaching former colleagues
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)
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)
How does a non-competition clause work (restrictive covenant)
Restricts the former employee working in similar employment for a competitor
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
What is often used alongside restrictive covenants?
Garden leave
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)
What does a garden leave clause prevent?
The employee from starting employment with another company (or competitor)
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
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
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
