Contents Of Employment Contracts, Legal Liabilities Of Directors And Managers, Effect Of European Law On Business In Uk, The Main Sources Of Law Affecting Business And Policies Relating To Customers, Rated Companies And Employment

Employment contract overview

Outline and explain the contents of employment contracts and the legal liabilities of managers and directors.

Demonstrate the ways in which European Union law affects the conduct of business in the United Kingdom.

Identify and explain the main sources of law affecting businesses and policies relating to customers, related companies and employment.

Employment contract is a written and documented agreement between employer and employee. It sets the basis between the two parties. It’s important for the contract to be written because it legally binds the relationship and has a meaning and clarity to it. The content of the contract is based on the nature of the engagement (Chadbourne,2016). There are however some set rules and regulations.

The employment laws in United Kingdom cover or provide minimum obligations and rights. The rights related to trade secrets, notice periods, duty to obey orders and these are only some of them which are common in all of them. A written and detailed contract is important because it helps to avoid any sort of malice.

The contract contains:

Employer and employee’s name

Date of joining and beginning

Pay scale or pay rate

Hours of work

Terms related to holiday

Sick leaves

Duration of notice before termination

Title of job

Nature of job – permanent, ad-hoc or temporary

Place of work

Additional compensations and perquisites

Rules related to Conduct

Grievance procedure

Pension term and schemes

Termination and extension of contracts

These elements are subject to changes by negotiation.

Companies Act 2006 under law has various general and common law duties that vested in managers and directors. They are legally bound to follow them. These liabilities majorly concern the internal management of the company. In case the director or manager fails to adhere with these liabilities, they are fined heavily by the law. The punishment can be as high as imprisonment.

Director and manager is responsible for any act or omission carried out in the employment period. They are rarely sues in personal capacity for act or omission towards other employees. They have to make sure that the corporation tax is paid and make sure that the secretary is discharging duties regarding the same.

If a director is found involved in any sort of fraudulent activity while the insolvency, he can be held liable.

They must not be involved in wrongful trading.

They must make every attempt to make the company earn profit.

Contents of Employment Contracts

Director must pay company debt before its wind-up

The must not breach the fiduciary duties confined in him.

They are liable for any punitive damages.

They must not make wrongful profits which are over and beyond his normal pay.

They should not create private nuisance and torturous interference in the company’s business.

They is liable to make disclosure statements with absolute transparency.

Director must ensure a transparent and correct prospectus is floated.

Effect Of European Law On Business In Uk

The European laws make a major impact on the way business in conducted in United Kingdom.

Regulating taxation and spending

By directives, laws and regulations

Lending them support and subsidies

Providing knowledge, and advice

Employment policy

Regional policy

Inflation policy

Training and education policy

International policy

Setting rule of games

The government is creating jobs and encouraging business activities in UK so that it’s able to compete with other countries across globe (Businessforbritain, 2016). The government funs their research, training and education so that they are skilled and polished. Government also provides region wise support to those states who have low employment rate. It also makes sure that there is no sudden inflation which will shake the country’s economy. They do this by regulating interest rates to keep a check on rising prices. Lot of investment is done in education and training. They have vocational subjects in school to polish the curriculum. The tax contribution made by business is used for creating more business avenues and start new projects. The government promotes trade by promoting export and discouraging import. Laws have been laid down related to business conduct (BBC, 2016).

The Main Sources Of Law Affecting Business And Policies Relating To Customers, Rated Companies And Employment

Government is responsible for making laws for the safety and in full interest of its people. These laws determine and effect various people and bodies to which it touches. The policies and rules change on regular basis and this effects how company operates with its employees, customers and competitors. The economic policy brings with it various taxes. Taxes increase the cost of producing goods and services which in return increase the amount that the customer has to pay. Like Value added tax which is borne by the final consumer but the company has to bear the cost involved in this taxes business (Postgraduate Course,2016). The interest rates is one such factor. Borrowing money depends on interest rates. Rise in interest rates will again increase the cost of the company. The companies however benefit when the government spends the money collected through taxation by increasing employment opportunities (Business Case Studies, 2016). Even while hiring, legal aspect and laws are kept in mind.
Few legal changes have also been made. Minimum wage has been made available to minors as well. Laws are enforced to protect customer interest so that they are not exposed to any corrupt practices. The law also entails fair competition and it does not support monopoly.

Legal liabilities of managers and directors

These laws effect each party’s interest so that no one is devoid of their basic rights and ensure no exploitation happens.

Article. 267 tfeu – treaty on the functioning of european union

Art. 267 pertains to preliminary ruling. This ruling is a decision made by ECJ (European court of justice after careful interpretation of European Union law. This happens when a request is made on behalf of court of tribunal of a European Union member state. This article empowers a judge with two major powers – carefully assess European Union law’s validity and to interpret it. The objective is to promote sustainable development and bring about a fundamental change in business approach. It aims at creating sustainable values in business. There is no compartmentalization in making of the law and policy and it’s implemented beautifully (The student lawyer, 2013).

The article states that if there is a question or issue raised related to the validity of the act of the body, union or institution is raised in the national court and it’s absolutely mandatory to give the ruling, CJUE may be asked to give the ruling. The court is of the view that its function is to give its interpretation of the Union Law or see about its validity. It’s the role of the national court to apply factual situations to the underlying treaties.

This law has a very crucial and critical impact on how European law communicates national and EU legal system. Its basic motive is to deliver decisions by aligning European Union and member states. It has been argues that the article is overextended in the context of who can refer. This can overwhelm the court leading to low quality of proceedings. The purpose of this article is to ensure the legal provisions are uniform across all the states. Article 267 has safeguarded the appropriate allocation of European Union law. It is helpful in a way that it brings about uniformity of law throughout the states. There is no divergence in the mechanism.

 The article also protects consumers and make sure that they are not triggered. It sets out a protective layer for the consumers because the law throughout the states have been unified and customer does not have to get harassed by different rules. The direct effect of the ruling is to provide uniform decisions across regional borders and there is no discrimination. There is bare minimum set of obligations related to setting up of a company, operations, restructuring and handling financial situations.

Effect of European Law on UK businesses

The article provides uniform interpretation of law irrespective of the state and regional boundaries. Business operations are not restricted and happen in various cities and states. Hence, it allows them free movement, level playing field and freedom of establishment. Free establishment is a part where companies can freely pick and choose their base of operations without legal or political restrictions (European Union Law, 2016).  There are however certain rules and regulation that are applied to them universal to each. In simpler words the treaty has made the business activity simple and hassle-free. It also has clear rules related to protection of environment that each business has to adhere to. No business activity should harm nature in any way. When the law kept no bar in the operations of business units they expected them to comply by not harming the environment. The European Court of Justice has made the entire process legal as opposed to Political. The treaty takes corporate governance, reporting and company law into serious consideration. The policies and treaties have brought about efficiency and competitiveness in the market and have changed business behavior across the nation. Academic scholars are taking serious steps towards educating people about the treaty in force. 

Alternative Dispute Resolution

Alternative dispute resolution solves the disputes that have not been able to get solved through negotiation. This third party solves any problems related to supply of goods or services. It is provided by trade associations and they deal with disputes related to mediation, arbitration, negotiation, adjudication, ombudsmen services and conciliation (Citizens Advice, 2016).

With the rise of employment it’s only natural for the issues to arise. Alternative dispute resolution strives to have a speedy decisions. ADR acts a third party that helps to solve the employment related issues. The advantages of using ADR are:

Low cost

Speedy decisions

Informal set-up

Highly confidential

Consensus is encouraged

Solutions include – explanation, continued employment, apology

The basic aim of ADR is to create a “zone of potential agreement”. ADR is beneficial in many cases but it must be carefully chosen keeping various factors in mind. There are times when legal course of action is required but that is only decided after the entire course of action is completed.

ADR provides “Mediation under Employment quality Acts” and it’s a voluntary process of mediation. This type of dispute often requires a neutral person to facilitate the dispute where the individual helps both the parties to reach a mutually acceptable agreement.

Main sources of law affecting businesses and policies

ACAS Policy discussion papers are formulated to speed up the debate and discussion about the key employment concerning issues. It covers a wide range of procedures and processes where both the parties have the potential to control the outcome. There is third party also that helps them to reach the agreement. Due to lengthy procedures and high costs, ADR and ACAS is coming popular. The main focus is that small scale industries are able to make use of it to come over issues (Europrl, 2016). There is however a low take up of ADR and ACAS. In smaller firms, usually it’s the tendency of the two parties to seek termination. It’s only the huge companies/large scale firms who are interested in the benefits that ADR and ACAS renders.  If ADR is used in the earlier stages of dispute, it can help the parties to resolve the conflict in a very constructive way without effecting the long term relation of the parties involved.

ACAS also believes that managers must have negotiation and mediation skills which will encourage self-help. This will help the companies in reaching to a conclusion within the internal machinery. ADR can be brought into function at any time of the dispute. ACAS provided free and statutory services which they expect both the parties to understand in their individual capacities. ACAS provided collective as well and individual mediation. It also facilitates training related to in-house mediators. ACAS’s access to justice approach is gaining lot of popularity and prominence. Government is also taking interest to promote ADR related initiatives. It is gaining international popularity.

Equality Act 2010

Parliament of United Kingdom introduced the The Equality Act and its basic aim is to make the anti-discriminatory law a little less complicated. This law served as a clear and streamlined system to bring about equality and enabled people to use the platform for any kind of biasness. The act deals with any sort of discrimination happening in the employment. It touches upon equal pay, sex discrimination, race relations, and disability discrimination. It strives to protect employment based on religion, belief, sexual orientation, age, disability, gender reassignment (Equality human rights, 2016). Pregnant women form a special case under Gender Protection Act.  There are certain occupations that are exempted from this act.

Entities that are protected under this act are:

Employees

Police officers

Employment services

Trade organizations

Partners

The Bar

Office holders

Qualification bodies

Recruitment

Local authority members

Disability

Age

Sex

Sex Orientation

Pregnancy and Maternity

Marriage and Civil Partnership

There is a wide range of discrimination that is covered in the Equality Act, 2010:

Sex Equality – Act protects the individuals from relevant types of works, equal work, provision of sex discrimination provision, sex equality rule, sex equality clause, defense of material factor and sex discrimination in relation to contractual pay.

Disclosure of information – It concerns relates to gender pay gap information and discussions about pay.

Pregnancy and maternity equality – It covers maternity equality rule, maternal equality clause and pay, relevant types of work, exclusion of pregnancy and maternity discrimination provisions.

Supplementary – This includes comparators, interpretation and exception.

There are however some elements that will not come into force and they include dual discrimination, socio economic inequalities and gender pay gap information. As an update to the system that the act provided, Public Sector Equality duty was brought into force and Commission Policy statement on caste discrimination (EU Law, 2016).

The employers play a very significant role in this act. The size of employment is irrelevant and the law extends it to all employers with duties to ensure the act is implemented. Employers have to function under the act even if the employee is temporary, does not have a contract, business partner or trainee (Lexology, 2016). The employers have exact same set of duties towards all their employees irrelevant of how the organization functions.

As an employer there is a particular conduct that is acceptable under the law. An employer has to refrain from any kind of harassment, discrimination and victimizing. Employers cannot justify their discrimination under any objective like – indirect discrimination, discrimination arising from disability or direct age discrimination.

An employer has to be absolutely transparent when it comes to recruitment. Employer has to avoid racial discrimination, disability discrimination, age disparity. An employer is allowed to ask questions related to health and disability. An employer cannot deny employment to a pregnant woman or he cannot deny maternity leave. He cannot deny flexible working hours to the employee. There must be no biasness related to promotion and transfers. Employees should be provided with facilities like access to technology, kitchen/pantry, washing facilities, parking, quiet prayer rooms and breastfeeding rooms. There should be appropriate laws relating to dress codes, appraisal and management. Disciplinary procedures should be same for each and every employee.

The Commission plays a vital role is providing the detailed information to the employers. It provides guidance and Codes of Practice to the companies and firms. Proper course of action is also taken in case any individual wants to seek redressal.

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