Employment And Business Law In The UK

Section1 –Nature of legal systems

Business and commerce in a nation largely depends on the framework of the employment legislations that govern the workforce. Employment law in the United Kingdom has developed is over the years towards a more employee rights oriented approach especially with the embodiment of European Union’s directives in domestic legislation (Hepple 2013). The following sections of this paper will seek to establish how employment law and corporation law are linked and analyze their interaction with each other.

(a)  The legal system of the United Kingdom incorporates Hart’s three part legal system. It does not have a codified/written constitution yet the British constitution comprises of a bundle of legislations which define the relationship between individuals and the state as well as the relationship and interaction between the legislature, executive and judiciary(Kelly and Slapper 2014). The way the legal system functions is statutes are enacted by virtue of legislative powers stemming from constitutional provisions and once ratified they become law, these laws are enforced by the executive and in case of disputes these are interpreted by the judiciary. The various sources of law in the English legal system are statutory law (which comprises of enacted legislations that have the force of law), common law (common law principles developed through various judicial decisions) and customs (customary law) (Sheleff 2013). These must be adhered to by corporations functioning within the jurisdiction of the United Kingdom. With regards to organizations the primary focus is on employment rights and health and safety regulations which must be followed. Some European Union laws have direct effect inside the jurisdiction of the United Kingdom. This means that a domestic legislation does not need to be enacted in order for those laws to have an effect. Thus in the absence of such an effect a domestic legislation needs to be enacted which can be through primary legislations (Acts) and secondary legislations (directives) (Hudson 2014).The European Communities Act, 1972 is the primary legislation which provides for the application of European Union’s laws inside the jurisdiction of the United Kingdom both directly and indirectly(Nugent 2017).Some of these secondary legislations are the Parental Leave directive (2010/18/EC), the Part-Time Workers Directive (97/81/EC), the Posted Workers Directive (96/71/EC), the Race Directive (2000/43/EC) and the Working Time Directive (2003/88/EC)(Pollack 2015). These are incorporated into the English Legal system though various legislations namely, Maternity and Parental Leave etc Regulations 1999, Employment Rights Act 1996, Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, Posted Workers (Enforcement of Employment Rights) Regulations 2016, Equality Act 2010 and Working Time Regulations 1998 (Masupe and Parker 2013).These are the primary sources of law that organizations need to adhere to and these additionally regulate their everyday functioning. An organization that seeks to sustain itself must meet the minimum standards prescribed by employment rights and the health and safety regulations. The embodiment of these employment rights in the United Kingdom provides a safer and more hospitable work environment. The Equality Act, 2010 and other related legislations that seek to regulate differential treatment in the work environment have developed equal employment opportunities and work environments that are free from harassment. The primary legislations which govern business organizations are Partnership Act, 1890, Limited Partnership Act, 1907 and Limited Liability Partnership Act, 2000. Corporations within the United Kingdom are governed by the Companies Act, 2006, Insolvency Act, 1986, Companies Directors Disqualification Act, 1986 and the Enterprise Act, 2002. These sources of law are more recent legislations that guide that functioning of corporations within the jurisdiction of the United Kingdom.

Section2–Impact ofthe law on business organisations

(b)   In the United Kingdom the legislature (which is the highest legislative body in the structural framework) comprises of the parliament (Norton 2013). The parliament is responsible for the regulation of the working of the government and it is additionally tasked with formulating, debating on and eventually enacting new laws within the jurisdiction of the United Kingdom. The parliament in the English legal system comprises of two houses namely, the House of Commons and the House of Lords(Birch 2013).The House of Commons is made up of MPs and the House of Lords comprises of members who’re appointed by the government (consisting of various hereditary positions and appointed positions including the senior most Bishop of the Church of England (Budge et al. 2013). The law making process is the formulation of a bill, which once formulated, is voted on by both the houses of parliament. If both the houses vote in favour of the bill it forms an Act and thus acquires the force of law(Blackburn 2016). A bill that is not consented to by the House of Lords can still acquire the force of law if it is re-introduced before the House of Commons (Chapman and Hunt 2013).A bill is a draft containing instructions of the proposed areas that are to be covered by the piece of legislation and the implications and effects that the proposed law would ideally have. A bill is drafted by the Parliamentary Counsel to treasury which consists of civil lawyers. This is the first step to the enactment of a new law. A bill maybe of three distinct types, namely, public bill, private members bill and private bill depending on the kind of legislation sought to be enacted(Norton 2015). Once a bill is drafted the next step undertaken is the first reading of the bill where the contents and implications are read out to the House of Commons. The second reading is the next step in the process where the bill is debated and amended by the MPs and it is then voted on by the House of Commons. The bill is then sent to the House of Commons Committee for scrutiny and they determine if the bill requires further amendments this is called the Committee stage. The committee prepares a report detailing the various implications of the bill and the debates and amendments that have been made till this point and the bill is then sent back to the House of Commons for the third reading (Porritt and Porritt 2014). The third reading is the last stage undertaken before the bill is sent to the House of Lords. In this stage the acceptance or rejection of the bill is voted on by the House of Commons after short debates on it (if there are any). In the next stage the bill is sent to the House of Lords where it repeats this cycle of stages and is amended and voted on by the House of Lords and sent back to the House of Commons for scrutiny of the amendments made (Russell 2013).The final stage in the law making process is obtaining Royal Ascent, this refers to the approval of the monarch. Once obtained the bill acquires the force of law and becomes an Act.  This is the government’s role in the law making process. This forms the basis of statutory law in the United Kingdom. Statutory law is however just one of the sources of law and does not encompass the entire legal system (De Lacy 2013).Common law principles are also incorporated into the legal system of the United Kingdom. Common law is developed through judicial precedents, these are judgments delivered relating to common law duties. These precedents are binding on the courts and must be considered when adjudicating on a given set of circumstances. Thus, statutory law and common law needs to be harmoniously interpreted when delivering judgments within the jurisdiction of the United Kingdom (Craig 2015).

Section 3 –Legal solutions to business problems

Employer’s obligation in relation to the following:

Occupational Health and Safety:

The primary legislation dealing with health and safety in the workplace in the United Kingdom is the Health and Safety at Work Act, 1974 (Tombs and Whyte 2013). This act prescribes that it is the employer’s obligation to ensure that all activities undertaken within the course of employment are safe. This firstly includes the conditions that the employee is required to work under, this must be maintained in a way that all possible hazards are removed to the extent possible, this includes having various well-lit and ventilated working areas and adherence to basic hygienic and sanitation standards (Holt and Allen 2015). All machinery and equipment in the working areas must meet the basic standards and there also needs to be adequate training and supervision directed towards the employees before use of such machinery and equipment is undertaken(Pouliakas and Theodossiou 2013). European Union rules that have been incorporated through directives also necessitate that the employer maintains a continuous process of risk assessment of the probable hazards that may occur as part of the course of employment(Reese 2015). This assessment must be in writing and the employer must undertake measures to minimize these risks continually. They also provide for appointment of appropriate health and safety advisors to aid in minimizing such risks. The Workplace (Health, Safety and Welfare) Regulation, 1992 brought in further directives relating to the employers obligation to provide a safe work environment(Kloss 2013). This regulation provided that the work area must be ventilated with fresh air (purified air may even be employed) and the temperature of the workspace would be maintained at not less than 16 degree Celsius where the employees are seated and not less than 13 degree Celsius where the employees need to move about. It also provides for various regulations relating to clean floors and sanitary conditions in the workplace. Additionally, it also provides for the availability of drinking water in the workplace at all times.

Workers Compensation:

An essential of a contract of employment is the remuneration paid to the employee. This is because that is the consideration against which the employee renders his services. It is a court implied obligation on part of the employer to remunerate his employees adequately. The minimum accepted standards of pay are defined under the National Minimum Wage Act, 1998 which defines and regulates the minimum rate of remuneration based on the working hours(Blackburn 2016). An employer not meeting the standards as per the legislation would be in contravention of this act and would be liable to face penalties for the same.

Section 4 -Recommendingappropriate legal solutions based upon alternative legal advice

Harassment:

The Equality Act, 2010 defines various forms of differential treatment that is prohibited in the workplace by virtue of this act (Hepple 2014). The Equality Act came into force in order to provide a work environment that is free from hostility or offensive conduct. Harassment is also included as differential treatment in the act and it prohibits the same in the workplace. The Equality Act, 2010 lays down various protected characteristics, in light of these characteristics harassment maybe defined as unwelcome conduct in relation to one of the protected characteristics. Section 26 of the act defines harassment and illustrates which circumstances would amount to harassment (Morris, Morris and Sigafoos 2013). Section 26 (5) of the act defines the various protected characteristics which are covered by the act. As per the provisions of the Equality Act, 2010 an employer may be held liable for harassment by a third party(Powell and Sang 2013).The Human Rights Act, 1998 which incorporates the provisions of European Convention for the Protection of Human Rights and Fundamental Freedoms also prohibits harassment in the work place (Smith 2018).

Equal Opportunities:

As stated above the Equality Act, 2010 was enacted with the aim of providing a workplace that is free from hostile, offensive or discriminatory conduct. This includes providing all members of the workforce with equal opportunities in terms of employment(Thornton 2013). The equality act now embodies nine characteristics which are protected from discrimination. These are age, disability, gender reassignment, marriage and civil partnership, maternity & pregnancy, race, religion/ belief system, sex and sexual orientation(Richard 2017). Discrimination on the basis of any of these characteristics when recruiting employees would attract the provisions of this act and hence would be deemed to be differential and unequal treatment. Thus, this act provides a framework for equal employment opportunities to all members of the workforce by prohibiting differential treatment in all forms.

Issue:

A 16 year old employee employed at a fast food outlet slipped and fell due to leaking water on the floors. While breaking her fall her hand fell into the frying area and she suffered from severe burns. The outlet was understaffed and the supervisor was occupied and thus was not overseeing the proper workplace safety requirements. The issue here is to decide the legal implications here based on employment and contract law.

Rule:

A contract of employment defines the terms and conditions of work imposed on an employee. The employer has an implied duty to provide a safe work environment. This is a court implied term (Stewart 2013).

Section 2 of the Health and Safety at Work Act, 1974 defines the general obligation of employers to provide a safe work environment(Karanika-Murray and Weyman 2013). Section 2 (2) (d) of the act makes it the employers obligation to maintain the premises in a way that addresses all health risks and hazards that could be reasonably faced by the employees(Demerittet al. 2015).

Application:

In the given set of circumstances the employee was under a contract of employment and thus the employer had a contractual duty to provide a safe working environment for its employees.

The employer also had a statutory duty to ensure that the work environment was safe. Under Section 2 (2) (d) the employer would be obligated to remedy the leaking water before it leads to any risk or hazard. In this case the leaking waterlead to an accident which injured the employee.

Conclusion:

The employer was in breach of his contractual duty to provide a safe work environment and was also in breach of his duties under Section 2 (2) (d) of the Health and Safety at Work Act, 1974.

Issue:

Calvin’s employer finds £ 100 missing from the cash register and dismisses him without any notice or proof. This was because the employer felt he was behaving suspiciously. However, there were other employees who had access to the cash register and were in the vicinity. The issue here is to determine Calvin’s statutory rights in case this was unfair dismissal and the remedies available to him.

Rule:

As stated by Section 94 of the Employment Rights Act, 1996every employee is protected against unfair dismissal. Section 95 describes the situations where a person would be deemed to have been dismissed by his employer. Section 95 (1) (a) of the act lays down that where the employer has terminated the employee’s contract of employment it would be considered dismissal (Freedland et al. 2016).

In order to determine if the dismissal was unjust British Home Stores Ltd v Burchell [1978] IRLR 379 laid down a three step test. The test requires three questions to be answered (Painter and Holmes 2015). These are:

• Did the employer have a genuine reason to believe that the misconduct had occurred?
• Was this belief about the misconduct based on reasonable grounds?
• Did the employer carry out adequate investigations into the matter?

Section 112 of the Employment Rights Act, 1996lays down the remedies for a complaint of unfair dismissal. Section 111 of the act provides for making such a complaint for unfair dismissal. As laid down by Section 112 there are two remedies available in case of unfair dismissal namely, orders for reinstatement or re-engagement or compensation.

Application:

In the given set of circumstances, Calvin’s employer did terminate his contract of employment thus as per the provisions of Section 95 (1) (a) it would be construed as unfair dismissal.

Following Section 94 Calvin has a right against unfair dismissal. When the test laid down in British Home Stores Ltd v Burchell [1978] IRLR 379 is applied to the facts and circumstances of the case we see that:

The employer did have a genuine reason to believe that the misconduct had occurred as there was £100 missing from the cash register and Calvin was behaving suspiciously. Thus, answering the first question in the affirmative. The employer did have reasons to believe that the misconduct had occurred however Calvin acting suspiciously is an entirely subjective interpretation of facts and is not conclusively reasonable enough to back the idea of him having committed the theft. This answers the second question but here the belief was not founded on reasonable grounds. With regard to the final question the facts make it clear that the employer did not undertake any kind of investigation and dismissed Calvin based on his belief. This answers the third question and it becomes clear that the employer did not undertake adequate investigations into the matter. Thus, the dismissal was unfair and unjust.

Conclusion

Calvin was unfairly dismissed by his employer. In light of this unfair dismissal Calvin would have the right to file a complaint for the same as per the provisions of Section 111 of the act and accordingly will have two remedies available to him which may be ordered as per the provisions of Section 112 of the act. These are reinstatement or re-engagement or compensation for the unfair dismissal.

Part 2

Issue:

Dan who was the previous owner of a store that burned down opened a new store in a new location. He wished to get it insured against fire and when applying claimed that he was had not claimed for fire insurance in the in the last 2 years when in fact he had for his previous store 23 months ago. The new store suffers fire damage and the insurance company refuses to indemnify him. The issue here is to determine if Dan’s legal position is right.

Rule:

Pope Innocent IV propounded the fiction theory of corporations and laid down that a corporation could be excommunicated from the church. This meant that the corporation was a separate legal entity which could not be held to be identical to its owners.

Salomon v A Salomon & Co Ltd [1896] UKHL 1 laid down that that a company is separate from its owner and thus cannot be held accountable for it actions. This position was also reiterated in Adams v Cape Industries plc [1990] Ch 433.

Application:

Dan was the previous owner of a store which burned down in the fire. His previous claim for insurance was based on the store he owned previously which was a different entity from his present store. Thus, when he claimed for the insurance it was not his behalf but as the previous entity. This meant that when the insurance company asked if he had made a claim for insurance in the past two years he wasn’t wrong to state that he hasn’t. Thus this claim for insurance is for an entirely new entity and thus cannot be construed to be a claim by the same person for insurance. Thus, the insurance company was in breach of their obligations when they refused to indemnify Dan for the losses suffered by him.This becomes evident when following the judgment in Salomon v A Salomon & Co Ltd [1896] UKHL 1.

Conclusion

The claim made by Dan is valid as he did not claim for indemnification in the period of the last three years. Thus following the rule of separate legal entity his claim for insurance on behalf of his new venture is valid and is a completely separate claim being made under a different name. Following separate legal entity we may infer that the insurance company is in breach of their duties as indemnifiers of the property and Dan can make a claim for damages based on such a breach of contractual obligations owed to him.

The courts are overburdened with cases and the judiciary is thus not able to sufficiently adjudicate all the disputes at a satisfactory rate. In light of such a predicament parties wish to opt for a more viable dispute reconciliation system would ideally turn for Alternative Dispute Resolution (ADR). Alternative Dispute Resolution mechanisms are out of court procedures that expedite proceedings and are employed with the objective of achieving an amicable solution at a faster pace than judicial adjudication. Alternative dispute resolution mechanisms vary based on the need of the dispute they may be classified into negotiation, conciliation and mediation, adjudication and arbitration and ombudsmen services. Negotiation is when the parties to the dispute employ their own representatives to resolve the dispute through identification of the issues, discussions and agreement on amicable solutions (Feliciano 2017). All other forms of ADR require third party intervention. Conciliation and mediation are mechanisms where parties to a dispute employ a third party to help formulate an amicable solution. In this mechanism the primary focus is on resolving the dispute through compromises to the extent possible. Adjudication is a more informal form of dispute resolution which employs a third party to judge the dispute based on the circumstances surrounding it. The decisions of an adjudicator maybe challenged in court. Arbitration is a more formal approach to dispute resolution where the decision of the arbitrator is binding on both parties. Arbitration proceedings can only be challenged based on procedural defects. The arbitrator may be appointed by the parties themselves if agreed upon or the court may be applied to appoint an arbitrator (Ionescu 2015). Ombudsmen Services are usually employed in case of consumer disputes. ADR mechanisms are usually faster than court procedures and thus help the parties reach a solution at a much faster rate than court adjudication. ADR procedures are also comparatively more economical as expenses such as court fees are not part of the procedures. Resolution mechanisms such as arbitration deliver binding solutions within a reasonable time frame. Adjudication has developed as a popular mode of dispute resolution in the United Kingdom in the recent years. This is mainly due to the cost benefits that it brings to the parties and that the focus is more on the problem between the parties than on the legal provisions that govern their transactions. Arbitration in the United Kingdom is regulated by the Arbitration Act, 1996. In France dispute resolution through Alternative Dispute Resolution mechanisms is not a common mode of dispute resolution due to the codified civil law system disputes generally start of through a Tribunal d’Instance or Tribunal de Grande Instance which are the courts of first instance. Decisions from these courts can be challenged through appeal in the Cour d’Appel which is the court of appeal. The highest judicial authority in France is the Cour de Cessation.

In light of the given set of facts a court procedure would be the most detrimental course of action since Antwon and Tyrell wish to retain their business relationship. A court procedure would be long drawn out process that would ideally cause a hindrance to any business transactions between the parties during the time. Additionally it would be an expensive mode of dispute resolution and would have an effect on both party’s finances. The facts state that the dispute has been persistent and both parties have not been able to reach a solution in a substantial period of time. Thus, negotiation would not lead to an effective solution as presumably the representatives of both parties have already attempted to reach a solution. As the parties have not been able to reach a solution to the dispute the employment of a third party to mediate the dispute would also not be effective. This is mainly because the parties have already effectively identified the problems between them and are mainly in need of adjudication (Fiadjoe 2013). Adjudication would reach a decision on the disputes based on the circumstances and would be similar to arbitral proceedings. However, arbitral proceedings will deliver binding decisions and such an award would retrain the business relationship between the two parties based on the outcome. Adjudication would also leave the option of challenging the decision in court if any party is aggrieved by such a decision. The UK follows the common law system and thus gives more room for judicial interpretation of circumstances. If the same circumstances occurred in the French legal system which follows the Civil law system the outcome would be governed by well-defined codified statutory law and thus would reach an amicable solution through court procedures.

Conclusion

Thus employment legislation in a nation is closely linked to the concept of human rights and equal treatment. The present legal scenario provides for safe and hospitable working conditions where employees would be motivated to work and nurture their skills. There also exists an elaborate reconciliation system in case of any form of disputes. The mechanisms so employed would give employees the opportunity to voice their concerns and grievances in case of any. Employment law also encompasses labour legislations which provide for bargaining methods for employees to ensure they receive ideal working conditions. This includes provisions for trade unions which collectively represent employee rights and bargaining for the same.

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