Employment Law for HR Practitioners Essay Answer

Introduction

The employment status of any individual is primarily defined by the employment contract (Semenza and Pichault, 2019). It is not always necessary that the employment contract contains a balance of power between the employer and the employee. This is because the employee has to think about pay scale, job security, tax structure, insurance policies and several other such facilities while considering an employment opportunity (Deakin, 2020). In pursuance of this, the current research is outlined based on a case study in which the status of employment of an employee, namely Steven is at high risk. According to the facts mentioned, the case of Steven establishes the unfair employee treatment from the employer’s contract that shows binding provisions. Therefore, the current research will be focused on determining the employment status of an individual in different circumstances. Subsequently, this research will be supported by legislation enacted by the Government to protect the employment rights of the employee. These legislations are Employment Rights Act 1996, Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 and The Employment Rights (Miscellaneous Amendments) Regulations 2019. The premise of this research is to determine the scope of the employment status and to understand the terms and conditions of the employment contract which is imposed on the employee. Additionally, the statutory provisions will be addressed which can help the case of Steven in the redressal of his employment rights. This will be done by assessing the basic duties and obligations under the common law which will be followed by a conclusion as to whether the employer of Steven is liable or not.

The employment relationship entails a connection between the employer and the employee (Budd, 2023). Regardless of the situation, the employees and employers pursue their interests, rights and expectations through employment contracts. It becomes essential for both parties to set an equilibrium so that both gain their interests. Apart from the own interest of the parties, the employment contract is further based on the statutory provisions of the law of the land. Therefore, the legislators and the Government are working on regulating laws that cater to the needs of unfair employment statuses. The state laws furnish those provisions which specifically sets an employee’s rights and standards of employment in key areas like non-discrimination, formation of unions, minimum wages, insurance laws, pensions schemes etc. These laws are established to politically, socially and economically benefit the labour force and workforce in the country (Katsabian and Davidov, 2022). Additionally, it should be noted that when these rights are not met or are inconsistent with the clauses mentioned in the contract, then a dispute arises between the employer and the employee.

A similar instance of dispute occurred in the mentioned case of Steven. In this, Steven agreed to the terms and conditions posed by his employer company which is Speedy Caley Deliveries Ltd. The duration of employment for Steven has been 5 years and throughout the entirety of this period, he has diligently followed the company’s requirements and job description. However, the company has not been rendering to the employment needs of Steven. Since Steven signed a self-employed sub-contractor employment contract to obtain work under the company. This contract is based on contractual work in which the employee gets paid according to the work done and is not regarded as a full-time employee (Cooke, 2023). Although it should be noted that even though the current designation of Steven is that of a sub-contractor, the company avails his service with special branding of the company and tracking device on his vehicle. The main area of dispute is the non-conformity with the statutory provisions of national living wages and national insurance.

A Contract of employment can be defined as an agreement to which an employee and employer are both legally bound with. A contract of employment or service is a type of agreement that is usually made by the employer with freelance workers or subcontractors. However, Section 230 of the Employment Rights Act of 1996 gives a definition to the term “employee”. An “employee” under the legislation is defined as a person who enters into a contract or works under a contract of service subject to terms of nature expressed or implied (Employment Rights Act 1996).

There are terms in a contract of employment that are either stated verbally or in writing. Express terms in a contract that are written are not usually limited to written contracts of employment. But, they are likely to include many documents of the organization such as the staff handbook unless the provisions given are considered to not have the same effect as that of a contract. Before express terms are drafted it is important that the employers get acquainted with the relevant legislation governing employment-related aspects such as Flexible working hours, parental leaves, minimum working hours and written particulars. It should be ensured by the employer that the expressed terms used in the contract should comply with the minimum legal requirements such as the right to rest breaks daily, the right to weekly offs and the right to enjoy paid leaves. It is the statutory right of every employee to enjoy and exercise the right to written statements of their particulars of employment that set out key terms of employment on the first day of employment (S. 230, Employment Rights Act 1996).

A contract of employment can also have terms which are of implied nature. For example: If a term in agreement is made by collective bargaining through with the employer along with the trade union, If a term in the contract is embodied by a statute and If a term in the contract of employment is incorporated by agreements of workforce such as agreements with the employer and the workforce that cover the aspect of entitlement of breaks. A few examples of terms of implied nature in a contract of employment are: the duty to build trust mutually between the employee and employer, the obligation of the employer to provide a workplace which is safe for the employee, the right of an employee to receive wages according to the minimum wage as implied by a statute and set by the nation and the right of an employee to receive equal remuneration irrespective of factors such as gender as implied by a statute.

Although implied terms exist, it is necessary for the employer to list out as many as terms possible in writing and convey it to the employee either before their job or on the first day of their employment (S.230, Employment Rights Act 1996).

The legal value of a contract of employment in the United Kingdom is no way different than any othe contract. Any contract made, shall be principally governed by the Law of Contracts which obliges the inclusion of elements similar to that as the essentials to form a contract. They are:

• An offer of employment should be clearly given by the employer by communicating all terms and conditions unambiguously.
• The offer provided by the employer should receive an acceptance from the employee either in the form express or implied.
• An important aspect of a contract is consideration. There cannot be a valid contract without the existence of consideration. There should exist a consideration of a legal nature for example, employee gets paid the wages for the work performed for the employer.
• There should be an intention between the parties to create a legal relationship. An agreement can only then be deemed a contract when it becomes legally enforceable.

Although we have laws that govern contracts, they are not sufficient enough to create the required legal obligations on the employee and employer. For which, there are other employment-related legislations to look after the same. The statutorily imposed legislations are as follows:

1. Equality Act of 2010: A contract of employment includes a Sex equality clause which is where the Equality Act legislation comes into play. The aspect of sex equality is discussed under section 66 of the Equality Act of 2010. The equality clause says that evenif the terms of employment of an employee do not include a sex quality clause in their contract of employment, they are still obliged to be considered as a contract that includes a sex equality clause. Having a sex equality clause in the contract of employment helps make employment conditions more favourable and less biased. It does not let one employee who is performing the same nature of the job as another to enjoy any extra or lesser benefit compared to those of their co-workers. Rather, this legislation helps bring people performing a similar nature of the job to equilibrium and par. (The Equality Act 2010)
2. Working Time Regulations Act of 1998: A worker's time as per the provisions of this law cannot exceed a period of 48 hours in a span of 7 days including overtime. This condition may be possible in rarest scenarios subject to prior consent from the employee and an agreement between the employee and employer in writing to perform such work. As per this legislation, an employer also must take all the necessary to ensure the health and safety of the workers. The employer is also obliged to be abreast of the tasks performed by workers on a day-to-day basis and keep note of hazardous tasks. It is the duty of the employer to provide employees with the necessary safety equipment in order to perform the work safely. (The Working Time Regulations 1998)
3. National Minimum Wage Act of 1998: The National Minimum Wage legislation plays an important role in setting a benchmark for a minimum wage which is to be remunerated for any day of work for an employee. Section 17 of this Act talks about Non-compliance with respect to the provisions of this statute. In case of non-compliance with the provisions of the National Minimum Wage Legislation by the employer, he/she is entitled to punishment under the law. An employee is entitled to be paid at least the minimum wage set by relevant statutes. Any payment below the minimum wage shall amount to non-compliance with the statutory requirement. (National Minimum Wage Act 1998)

It should be noted that the status of employment is generally categorised as fixed-term employees and contract-based employees (Malekela, 2022). Fixed-term employees are those employees who contain a permanent position in the company. These types of employees are protected by the statutory provisions enacted by the Government and are covered under various benefits and facilities. Another category of employment type is contract-employee in which the employee takes on different tasks or different works for the company and pursues it till their completion, after which the employee’s contractual obligations are over until it becomes extended. In this, the employee doesn't need to be covered by the same benefits and facilities as the fixed-term employee.

The unfair and limited rights given to employees are a major factor in the dispute in an employer-employee relationship (Ball and Griffiths, 2021). This was observed in the Consensus Development Project (CDP) in which research was done to determine the shortage of staff for the position of nursing and caring in the hospital. This research concluded that the result of the shortage in the availability of staff is derived from the fact that incompetence with the labour norms and this can be solved by rendering better employment rights to the staff. Therefore, employers should facilitate fair treatment of employees by availing rights and opportunities to their workers.

According to the common law, employers have a duty to provide compensation and remuneration to employees (Bamber et al., 2021). Additionally, keeping a safe and healthy work environment will keep the labour force and workforce of employees intact which will result in higher productivity. The case of Steven denotes that the compliances on the part of the company were fulfilled although the company was unable to understand its duties towards the employee. This is the major reason for Steven’s resistance to continuing with the same contract. Furthermore, the aspect of indemnity for losses and taking reasonable care for the employee’s safety is missing. The common law also prescribes that both the employer and employee should maintain a cooperative and daily dealt relationship (Waddington, 2020). This establishes the fact that the balance of power should have an equilibrium and should not tilt towards one party. In the case of Steven, the balance of power is leaning towards the company which has established autonomy through the employment contract. In pursuance of this, Steven is unable to engage in receiving minimum wage and insurance policies which he is liable to get from the company.

In the case of Ready Mixed Concrete v Minister of Pensions and National Insurance (1968), the aspect of employment’s contractual obligations and relationships was discussed. In this, a delivery executive came into a contract with a concrete company for delivering the concrete. According to the contract, the employee’s designation was that of an independent contractor. This contractor also mentioned that the employee was instructed to buy his vehicle but should paint it according to the company’s logo and the company’s branding style. This means that the employee was fulfilling all the company’s compliances under the company’s name. The dispute, in this case, arose as to whether the employee was subject to the provisions of the National Insurance Act 1965 which says that employees can get sufficient insurance. In other words, the designation of an independent contractor was discussed and the Court discussed whether he is an employee or not. In this, it was mentioned that the contract of employment or contract of service is established if the person agrees to the services and agrees to the express and implied terms. In conclusion, the court held that an independent contractor cannot be regarded as an employee. The Court also mentioned that the employee was not obliged to follow the criteria on the appearance of the vehicle and had the freedom to choose any vehicle, irrespective of the company’s logo.

Furthermore, the case of Somerville v Nursing & Midwifery Council (2021) revolved around whether the staff members were considered employees, workers or self-employed. Hence, the categories were divided and based on these categories, the levels of protection were decided. Therefore, the least level of protection was given to self-employed staff and absolute protection was given to the employees. This case further referred to Section 230 of ERA 1996, Working Time Regulations 1998, Trade Union and Labour Relations (Consolidation) Act 1992 and National Minimum Wage Act 1998 in which the test was established. This test went in line with the case of Ready Mixed Concrete v Minister of Pensions and National Insurance and referred to the employment status test criteria. This test is used to identify the type of employment in which the staff is based on the contract, whether the contract is for a personal task and the last criterion was that the company should not be a client. In conclusion, the Court of Appeal mentioned that the minimum work requirement for employment status test is null and the contract should only include a personal task obligation. Hence, Steven is righteous in further adjusting his contract and the contentions of the company do not have an essence in the case.

 In the case law of Nethermere Ltd v Taverena & Anrs [(1984) IRLR 240], there were two women who were working as machinists in cloth manufacturing. The nature of employment of the two women is the contractual form. Both the women were hired by a subcontractor initially and once the subcontractor who initially hired them went out of employment, the women were taken in directly by the cloth manufacturing company named Nethermere Ltd. Post hiring, the women were paid on the basis of piecework and their wages were calculated depending on how many clothes the women produce. The company provided them with the necessary material required for them to perform their work and they were also subject to adhere by the rules and regulations of the company and perform as per the company norms.

Issue

The challenge that was raised before the court was the question about the nature of employment of the women employed in Nethermere Ltd whether they were independent contractual employees or full-time employees of the company. The contentions put forward by the women were that their nature of work is similar to that of regular employees in the industry and therefore they should too be entitled to employment benefits such as paid leaves, sick leaves and a notice period before termination.

Judgment

The decision of the court was in favour of the women. The decision of the court held that the nature of employment of the women at Nethermere Ltd was “employee” but not “contractual-employment”. The court supported its decision by stating that the women were working as per the direction and control of the company and when they were inducted into the company they had no say in choosing how they worked. It was also stated that the women depend on the company to fulfil economic needs and for a livelihood which makes it clear that they were full-time employees in the industry.

In conclusion, this establishes that Steven is a sub-contractor but has the absolute right to change his contractual terms and convert it into full-time employment especially because he has been engaged with serving the company for 5 years and fulfilling the minimum hours which is 40 hours a week and 5 days a week. The decision in the above case laws aims at the fact that if an employee is an independent contractor, then the employee has the freedom to complete the work with due diligence and according to his terms and conditions. Similarly, Steven is not obliged to fulfil all the requirements of the company like using the company’s vehicle or dressing in clothes with the company’s brand. Additionally, Steven has the right to remove the tracking device from the vehicle. Lastly, the company should be consistent and keep a check on the statutory provisions.

References

[1984] IRLR 240 URL: https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm7110

Ball, J. E., and Griffiths, P. 2021. Consensus Development Project (CDP): An overview of staffing for safe and effective nursing care. Nursing open, 9(2), pp. 872-879. https://doi.org/10.1002/nop2.989

Bamber, G.J., Cooke, F.L., Doellgast, V. and Wright, C.F. eds., 2021. International and comparative employment relations: Global crises and institutional responses . Sage.https://books.google.co.in/books?hl=en&lr=&id=1tAiEAAAQBAJ&oi=fnd&pg=PA29&dq=employment+rights+act+united+kingdom&ots=38oxMRpiYu&sig=VSAiz2XKEoh-2YbbLkycvgeCXnA&redir_esc=y#v=onepage&q&f=false

Budd, J.W. 2023. Employment relationship. In Encyclopedia of Human Resource Management (pp. 106-107). Edward Elgar Publishing. https://doi.org/10.4337/9781800378841.W.5

CIPD. 2022. Contracts of Employment [online Article] URL: https://www.cipd.co.uk/knowledge/fundamentals/emp-law/terms-conditions/contracts-factsheet#gref

Cooke, F. L. 2023. Subcontracting. In Encyclopedia of Human Resource Management (pp. 375-376). Edward Elgar Publishing. https://doi.org/10.4337/9781800378841.S.30

Deakin, S. 2020. Decoding employment status. King’s Law Journal, 31(2), pp. 180-193. https://doi.org/10.1080/09615768.2020.1789432

Employment Rights Act 1996. [online] URL: <http://www.legislation.gov.uk/ukpga/1996/18/part/I/crossheading/right-to-statements-of-employment-particulars>

Equality Act 2010. [online] URL: <http://www.legislation.gov.uk/ukpga/2010/15/contents>

Gov.uk n.d ESM7110 - Case Law: Nethermere (St Neots) Ltd v Gardiner and Taverna

Katsabian, T., and Davidov, G. 2022. Flexibility, choice, and labour law: The challenge of on-demand platforms. University of Toronto Law Journal. https://doi.org/10.3138/utlj-2021-0113

Malekela, M. S. 2022. Failure to renew a fixed term employment contract; reasonable expectation for renewal. SSRN. http://dx.doi.org/10.2139/ssrn.4201551

National Minimum Wage Act 1998. [online] Available at: <http://www.legislation.gov.uk/ukpga/1998/39/section/1>

Ready Mixed Concrete v Minister of Pensions and National Insurance [1968] 2 QB 407.

Semenza, R. and Pichault. 2019. The challenges of self-employment in Europe . Edward Elgar Publishing. https://books.google.co.in/books?hl=en&lr=&id=Y3iYDwAAQBAJ&oi=fnd&pg=PR1&dq=employment+contract+law+uk&ots=o65-1lE0rN&sig=V_BpO5z-fZxgfOpIyRG05QmwbdM&redir_esc=y#v=onepage&q=employment%20contract%20law%20uk&f=false

Somerville v Nursing & Midwifery Council [2021] ICR 1448 https://assets.publishing.service.gov.uk/media/60929e428fa8f51b92e94e09/Nursing_and_Midwifery_Council__v_Mr_R_Somerville__UKEAT_0258_20_RN__V_.pdf

The Working Time Regulations 1998. [online] Available at: <http://www.legislation.gov.uk/uksi/1998/1833/contents/made>

Waddington, J., 2020. Employment relations in the United Kingdom. In International and Comparative Employment Relations (pp. 20-48). Routledge. https://www.taylorfrancis.com/chapters/edit/10.4324/9781003116158-2/employment-relations-united-kingdom-jeremy-waddington

Contract of Employment

A Contract of employment can be defined as an agreement to which an employee and employer are both legally bound with. Contract of employment or service is a type of agreement that is usually made by the employer with freelance workers or subcontractors. However Section 230 of the Employment Rights Act of 1996 gives definition to the term “employee”. An “employee” under the legislation is defined as a person who enters into a contract or works under a contract of service subject to terms of nature express or implied (Employment Rights Act 1996).

Express terms of a Contract

There are terms in a contract of employment which are either stated verbally or in writing. Express terms in a contract which are written are not usually limited to written contracts of employment. But, they are likely to include many documents of the organization such as the staff handbook unless the provisions given are considered to not the same effect as that of a contract. Before express tems are drafted it is important that the employers get acquainted with the relevant legislation governing employment related aspects such as Flexible working hours, parental leaves, minimum working hours and written particulars. It should be ensured by the employer that the expressed terms used in the contract should comply with the minimum legal requirements such as the right to rest breaks daily, right to weekly offs and the right to enjoy paid leaves. It is the statutory right of every employee to enjoy and exercise the right to written statement of their particulars of employment that set out key terms of employment on the first day of employment.

Implied Terms of a Contract

A contract of employment can also have terms which are of implied nature. For example: If a term in agreement is made by collective bargaining through with the employer along with the trade union, If a term in the contract is embodied by a statute and If a term in the contract of employment is incorporated by agreements of workforce such as agreements with the employer and the workforce that cover the aspect of entitlement of breaks. A few examples of terms of implied nature in a contract of employment are: the duty to build trust mutually between the employee and employer, the obligation of the employer to provide a workplace which is safe for the employee, the right of an employee to receive wages according to the minimum wage as implied by a statute and set by the nation and the right of an employee to receive equal remuneration irrespective of factors such as gender as implied by a statute.

Although implied terms exist, it is necessary for the employer to list out as many as terms possible in writing and convey it to the employee either before their job or on the first day of their employment.

The Legal Position of the United Kingdom

The legal value of a contract of employment in the United Kingdom is no way different than any othe contract. Any contract made, shall be principally governed by the Law of Contracts which obliges the inclusion of elements similar to that as the essentials to form a contract. They are:

• An offer of employment should be clearly given by the employer by communicating all terms and conditions unambiguously.
• The offer provided by the employer should receive an acceptance from the employee either in the form express or implied.
• An important aspect of a contract is consideration. There cannot be a valid contract without the existence of consideration. There should exist a consideration of a legal nature for example, employee gets paid the wages for the work performed for the employer.
• There should be an intention between the parties to create a legal relationship. An agreement can only then be deemed a contract when it becomes legally enforceable.

Clauses governed by other legislations which are statutorily part of every contract of employment

Although we have laws that govern contracts, they are not sufficient enough to create the required legal obligations on the employee and employer. For which, there are other employment related legislations to look after the same. The statutorily imposed legislations are as follows:

1. Equality Act of 2010: A contract of employment includes a Sex equality clause which is where the Equality Act legislation comes in to play. The aspect of sex euality is discussed under section 66 of the Equality Act of 2010. The equality clause says that evenif the terms of employment of an employee do not include a sex quality clause in their contract of employment, they are still obliged to be considered as a contract that includes a sex equality clause.

References

 Legislation.gov.uk. 2015. Employment Rights Act 1996. [online] URL: < http://www.legislation.gov.uk/ukpga/1996/18/part/I/crossheading/right-to-statements-of-employment-particulars >

CIPD. 2022. Contracts of Employment URL: https://www.cipd.co.uk/knowledge/fundamentals/emp-law/terms-conditions/contracts-factsheet#gref

Legislation.gov.uk. 2010. Equality Act 2010. [online] URL: < http://www.legislation.gov.uk/ukpga/2010/15/contents >

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