Human Resources in Organisation - Essay Example

Introduction Different companies have different forms of employment contracts offered to their employees depending on the company's activities. Somecompanies have all employees signing the same form of contract whereby this contract applies to all employees within that company. In some other companies, each employee will sign his or her own contract which will only apply to that employee and the employer agreement. The agreement between the employer and the employee may be written or oral but the impact is the same. Whether an agreement is oral or written, elements such as the work that the employee is expected to be doing in the company, the particular duration that the employee is expected to be with the company, the rate of salary for the employee, etc. Others include the date that the employee is expected to report for the job, proper notice period that the employee will be given in case of dismissal, and benefits of the employee. If Karen is to be dismissed by the Catastrophe Concepts a proper notice period is a requirement. Again, if Karen leaves Catastrophe Concepts and joins a competitor, she is not allowed to reveal any confidential information about this company to her new employer. This is aimed at reducing the risk of the company becoming weaker in competing with its competitors. A great reduction in production and quality of products would take place if Karen hired some of the employees currently working with Catastrophe Concepts. To avoid such risks in dismissing Karen, the company ought to have drafted a restraint of trade clause in Karen's original written letter as these could restrict her from revealing such information and she did, some steps in the clause would be followed. Terminating Karen's Employment Had the management drafted a detailed employment contract where a proper notice period was outlined, the process of dismissing Karen would have been very easy. However, upon reasonable notice, the human resource manager can always terminate the employment of an employee should the employee become a bother within the company (Henry, 1999). In any company, a reasonable notice period for an employment to be terminated will depend on how senior the employee is, the length of service, their age, remuneration, etc (John, 2008). Catastrophe Concepts can use the statutory minimum notice period where for the case of Karen who have worked with the company for eight years, two weeks for the first three years and a week every year for the remaining five years are the minimum time that the company can give to Karen as the notice period. This sums to a total of eight weeks notice period that the company must give to Karen in order to successfully terminate the employment. If the employment is terminated without this period on notice, Karen has a right to sue the company for wrongful dismissal. The company may be required to pay compensation for wrongfully dismissing her. Instant Dismissal If Catastrophe Concepts want Karen to stop working immediately, instant dismissal is the most effective. The reason for this could be that the management is worried that Karen may not work effectively in the company if she is allowed to remain in the company knowing that she is just about to leave not willingly but being dismissed by the company. The management could also be worried that Karen may be disruptive in the work place and may even disrupt the operations of the machines so that poor quality products may be produced. However, for instant dismissal, the company will have to pay a particular amount of money for compensation for their failure to give notice. This payment is also known as a sum in lieu of notice. Since there was no detailed employment contract for the case of Karen, the payment made will be tax-free and will be up to a limit of '30,000 and national insurance deductions will not be included (John, 2008). When the calculations for the amount will be made, Karen's benefits such as the car will have to be included in addition to her salary. Wrongful Dismissal This is a claim whereby an employee claims for payment of damages after he or she has been dismissed without a proper notice period and without payment (John, 2008). The only way that the company can dismiss Karen without giving a notice and fail to pay damages is if Karen is guilty of gross misconduct and this will be justified if the dismissal took immediate effect. Some of the gross misconducts include misuse of email and internet, damage of property, theft, physical assault and gross insubordination, failure of the employee to work as a result of influence of alcohol or other illegal drugs, etc. Restrictions One of the most effective strategies that a company may use to protect itself from competitors as a result of its employees joining the competitors is by use of non-competent agreements. These are agreements that restrict a key employee in the company from revealing some confidential information from the competitors thus reducing piracy of information and ideas (John, 2008). For the case of catastrophe Concepts, this might be a little bit hard since there doesn't exist a non competent agreement that can be used to protect the company's employees and customers from following Karen after his departure from the company (Pascal, & Mariann, 2006). One of the restrictions that might generally apply is the fact that Karen is not allowed to carry out any business deals on behalf of Catastrophe Concepts. This can be ensured by the company making it public that Karen is no longer an employee of Catastrophe concepts and any person who will collude will him on behalf of the company should do it at their own risk. This announcement can be made public by use of the media immediately when he is dismissed. This way, Karen will be restricted by law not to carry any business deals on behalf of the company and any persons will be worried of facing the law. Still in absence of the non competent agreement, there exist some laws that relate to the way that an employee deals with confidential information of a company that one has access to in the course of their employment. Whichever the way that the information was acquired, an employee is not allowed to disclose the confidential information to the competitors or at times even to the employees within that company. This is because it may allow some unfair competition between the company and the competitors. In the case of Karen where is no written contract, Karen has the obligation of taking care of his former employee even if he leaves the company. As long as the information is a trade secret, whether warned of its confidentiality or not, the information should not be disclosed. Effects of Revealing Confidential Marketing Information If Karen leaves the company and reveals some confidential information of the company to the competitor, the Catastrophe Concept is likely to lose to their competitors since the competition will be unfair. If he reveals some confidential information about a new product that the former employer is willing to launch in future, the new company might work very fast to produce the same product with a new name. This will be a great loss to the Catastrophe Concepts since their capacity to compete will be greatly affected. If information about the cleverer advertising campaigns that the company is about to put in place, the competitor may jump on the same idea very fast and implement it before the Catastrophe Concepts implement it. The most dangerous confidential information that Karen can reveal to Catastrophe Concepts competitors is the list of customers that the company supplies its products to. This will mean that the competitor now has the capacity to snatch these customers and Catastrophe Concepts will not have customers to their products (Peter, 2004). This might eventually mean the end of the company. Since Karen has been the sales manager to this company, it means that she even have the prices at which Catastrophe Concepts offers their products. Revealing such information to competitors means that the competitors can now lower the prices of their products for sometime so as to win these customers thereby killing Catastrophe Concepts. Revealing of all this confidential information exposes catastrophe Concepts to unfair competition and thus their ability to compete in the market is greatly reduced (Peter, 2004). Effects of Hiring Staff Members of Catastrophe Concepts The departure of Karen has many effects on the capacity of Catastrophe Concepts to compete with its competitors. If she lures the employees now that the company is dismissing her, the quality of products that the company produces will be poor. This means that other companies that produce similar products will have an advantage over Catastrophe concepts (Elliott, 2007). Hiring of employees form Catastrophe Concepts when she joins the competitor company will also have a great impact on the company (Burch, 2005). One, the company will have to hire new employees and intense training will have to be given to these employees which will waste a lot of time. Meanwhile, the competitor company will be enjoying the presence of experienced employees from Catastrophe Concepts which will increase their competitive advantage. As catastrophe Concepts trains its new employees, the quality of products is likely to go down and thus they are likely to lose most of their customers. The employees who leave Catastrophe Concepts hold some confidential information to this company. If they reveal information concerning the strengths and weaknesses of Catastrophe Concepts, the competitor will take the advantages of the company's weaknesses so as to win all their customers (Elliott, 2007). These employees will also assist in minimizing the potential threats from the Catastrophe Concepts. The employees that Karen is likely to hirer are the same employees that are well known by the customers of Catastrophe Concepts. This means that the employees can be sent out to convince the customers that they are the same people producing the products and therefore these products are the same as the ones that came from catastrophe Concepts. Suggested Restraint of Trade Clause The restraint trade clause should contain details of the employee such as the date that the employee started the job, the starting salary of the employee, and the benefits that the employee is entitled to (Gibbs & Cauley, 2009). An employee signs a confidential agreement where he or she promises never to reveal some confidential information on how the operations of the company take place. He or she also promises never to share the employer's formulas, plans, machinery used, etc. In the non-competition agreement, the employee promises that he or she will not be a worker to a rival company in a particular region for a specified period of time after he or she stops working for this employer. He or she also agrees that he or she will not start a similar business within a given region (Irish, 2005). In case the employee invents something while he or she is employed or within a specified period of time after termination of employment, the invention is said to have been made by the employer. The best efforts clause ensures that the employees assure that they will work to their level best and they will remain loyal to their employee (David & Malcolm, 2004). The clause will also ensure that the employee doesn't work for an employee operating a similar type of business as long as he or she is an employee of the first employer (Gibbs & Cauley, 2009). The termination clause states that either the employee or the employer can terminate the employment for any reason as long as a reasonable notice is given. Also, if the employee bleaches the contract in any way, the employer has the right to terminate the contract without a notice. All these ought to have been included in the Karen's original contract document. Conclusion Regardless of the absence of a detailed employment contract between Catastrophe Concepts and Karen, termination of the employment is very possible as long as Catastrophe Concepts give a reasonable notice to Karen before dismissing her. If the company dismisses Karen without a reasonable notice, Karen has a right to sue the company for wrongful dismissal and the company may be required to pay compensation for wrongfully dismissing him. If Karen leaves Catastrophe Concepts join a competitor, she is not allowed to carry out any business contracts on behalf of Catastrophe Concepts. If Karen reveals confidential information to the competitors and hires employees from Catastrophe Concepts to her new place of work, the competitive advantage of Catastrophe Concepts is greatly reduced and this may even lead to the downfall of Catastrophe Concepts. The company ought to have included all details of an employment contract in Karen's original document so as to avoid complications when it comes to terminating the employment. References Burch, B. (2005). Precautions to take when a key Employee Leaves. Retrieved from http://www.evancarmichael.com/Human-Resources/2869/Precautions-to-Take-When-a-Key-Employee-Leaves.html on 03-August-2009. David, L., & Malcolm, S. (2004). Essentials of Employment Law. Princeton: Princeton University Press, 22-31. Elliott, S. M. (2007). The Threat from Within: Trade Secret Theft by Employees. Harvard: Harvard university press, 132-141. Gibbs & Cauley, (2009). Ten Things to Think About: Employment Contract Provisions. Retrieved from http://smallbusiness.findlaw.com/employment-employer/employment-employer-hiring/employment-employer-hiring-contract-provisions.html on 03-August-2009. Henry, H. P. (1999). Employee Dismissal: Law and practice. Atlanta: Willy Publishers, 121-128. Irish, V. (2005). What an Employee needs to know About Trade Secrets. Retrieved from http://www.wipo.int/sme/en/documents/employees_confidentiality.htm on 03-August-2009. John, W. S. (2008). How to Terminate an Employment Contract. Retrieved from http://www.lawpack.co.uk/Knowledge/Business/HumanResources/article852.asp on 03-August-2009. Pascal, L., & Mariann, N. (2006). Restrictive Covenants in Employment Contracts and other Mechanisms. Oxford: Oxford University Press, 152-159. Peter, J. K. (2004). Covenants against Competition in Franchise Agreements. New Jersey: price ton Hall, 238-242. Rachel, B. (2009). Losing More than Just an Employee. Retrieved from http://www.mcafeetaft.com/NewsResources/AttorneyArticles/Articles/Losingmorethanjustanemployee.aspx on 03-August-2009. Read More