Employment Issue in Superchoc Limited Company - Essay Example

and Employment Law Introduction Superchoc Limited Company supplies, services and restocks confectionery vending machines. The company decided to vary the contractual terms of its employees below the managerial positions. It notified the employees in early April 2013 and intended to effect the changes starting 1st June 2013. The company served each one of them with a letter titled “Written Statement of Changes to Employment Particulars” and were required to sign and return a copy to the personnel manager acknowledging receipt. One of the new terms that the company was introducing was to require the employees ‘to carry out such overtime as may be required by the company’. Question 1 Facts Nigel is one of the employees affected by the ‘new’ terms and conditions. He is a service engineer who has been doing some overtime work in his own volition for the benefit of the company. But upon the requirement to make overtime working an obligation, Nigel has refused to do any further overtime stating that the long working hours are having a detrimental to his health and family life. He further claims that he never signed a contract agreeing to do unlimited overtime. He has consistently and expressly made it clear over the last few months that he was working a limited amount of overtime and was not supporting the unlimited provision the company was introducing. He simply agreed to the limited overtime for the benefit of the company and he never at any particular moment felt obliged to do it. The company is considering taking disciplinary action against Nigel, with his manager threatening to suspend him without pay until he agrees to resume overtime working. Argument First, the company has a right to compel obedience from its employees. It is the employees’ duty to cooperate with his employer and to obey the instructions given and, most importantly, not to impede the employer’s business (Ullman, 2003). The company can initiate the disciplinary process and even dismiss Nigel on grounds of insubordination. Macari v Celtic FC ct of session [1999] IRLR 788 provided some useful insights when it directed that if the employer breaches the duty of trust and confidence, yet the employee refuses to leave, then the employee should not disregard employer’s lawful instructions. Nigel was informed in advance and in writing on the intended revision of terms. Nigel never left, even though he showed his disagreement with the new terms obligating him to work overtime as and when required. Due to his decision to stay the company takes that as an implied communication of acceptance of the new terms and conditions. It expects Nigel to adhere to them, failure to which will lead to his suspension and or dismissal pursuant to the provisions of the disciplinary process (Moffat, 2011). The company’s revision of the written particulars was made within the legal framework and therefore, legal and binding if signed. According to ss.1-7 Employment Rights Act 1998, the employer should provide the written particulars of employment within the first two months after the commencement of employment. If it is a continuing employee, like in this case, it should not be later than a month after the change has been effected (Craig, 2008). Again, s. 4 of the Employment Rights Act provides that if such changes are made, then the employees should be informed of the same personally and in writing; the company did so. The company, however, faces tough odds because of the arguments or the courses of action available to Nigel. Nigel claims that working overtime has been detrimental to his health and family life. Employers are generally required under the European Convention for the protection of Human Rights and fundamental freedoms (EHCR) to respect the employee’s right to private life and family life under article 8 (Craig, 2008). The EAT 2 also provides that the employer shall take reasonable measures, as is reasonably practicable, to take care of his employee’s health and family life and to put in place a working environment that enables the performance of the contract. Increasing the overtime hours by making them an obligation as and when required explicitly violates these provisions. Furthermore, the law recognizes the initial contract that was entered in during the time of engagement of the employee. Sarker v South Tees Acute Hospital NHS Trust [1997] IRLR 673 (EAT) showed that it is impermissible to later use anything said and done, apart from the initial contract terms, to subsequently aid in constructing a contract. Therefore, Nigel’s working of overtime does not suggest his willingness to work past his required time and should not be construed by the management to mean so. Secondly, such notification of change in contractual particulars as was provided by the company does not amount to a change of contract Aparau v Iceland Frozen Food plc EAT [1996] IRLR 119 showed that it has become common for employers to presume that they just can alter a contract simply by providing a notice to its employees. The case established that such a move is not binding and is, in fact, null and void. The company may therefore be liable to pay Nigel damages as a result of breaching the employment contract. Written particulars cannot, on their own, form a contract. System Floors (UK) Ltd v Daniel EAT [1981] IRLR 475 showed that written particulars of employment are merely the employer’s version of the contract. It can only come in force as a contract once expressly agreed by the parties. Nigel did not agree to such terms because he did not sign a contract stating so and has instead consistently stating his disapproval of the new terms which obligates the employees to work overtime when required. Even if Nigel signed the working particulars, it does not necessarily mean consenting as is evident in Gascol Conversions Ltd v Mercer CA [1974] IRLR 155. In this particular case, Superchoc Limited Company merely required the employees to sign the document and submit it to the personnel manager as evidence of its receipt and not necessarily acceptance of the terms. The company may also find itself liable for breach of contract if sued by Nigel claiming that he was still working even though under protest. Bundett-Coutts and others v Hertfordshire County Council [1984] IRLR 91 showed that an employee does not necessarily have to resign in order to show his rejection or disapproval of the imposed variation. If the employee protests, just like Nigel did, by making it clear that they are not accepting the change in terms, then they are allowed to continue to work but ‘stand on their right, envisaged in the initial employment contract (Cabrelli, 2010). Therefore, Nigel can move to court to seek an injunction to the suspension without pay instituted by the company and also claim damages for wrongful suspension leading to loss of income. And since the working written particulars are in direct conflict with the initial contract; the latter is expected to prevail. Question 2 Facts Jane is a delivery driver employed by Superchoc Limited Company. Recently, she was found asleep in the middle of the morning in one of the company’s car parks. The company’s views are that this amounts to ‘gross misconduct’ and have decided to dismiss her summarily without even going through the disciplinary procedures outlined and integrated in her individual employment contract. Furthermore, the company does not intend to pay her holiday pay, which was 10 days’ outstanding. Jane has been continuously under employment with the company for a period of two weeks short of one year. Argument If Jane is in fact, summarily dismissed and her holiday pay outstanding withheld there are some legal courses of actions/remedies that she can choose to explore. First, Jane can sue Superchoc Company Limited for breaching the duty of trust and confidence. This is by showing that the company did not take reasonable care for her well-being and safety by not requiring her to work for such long hours. In the case of Johnstone v. Bloomsbury Health Authority [1991] IRLR 118 CA the plaintiff had been employed by the defendant to work for 40 hours a week and also to be ‘on call’ for an average of 48 hours a week. These terms were specified in the employment contract. However, in the due course, the plaintiff was made to work allegedly in excess of 100 hours leading to inadequate sleep. As a result, he became depressed, lethargic, was unable to sleep anymore and suffered from stress. The plaintiff claimed that working for such intolerable hours was detrimental to his health and making him sleep during work time and most importantly putting his safety and that of his patients at risk. Similarly, Jane can claim the same by showing that she has been made to work for intolerable hours and that this is what caused her to sleep at the time she is supposed to be working and putting her life and that of other drivers and pedestrians at risk. Reg 4(1) of Working Time Regulations 1998 clearly points out that where no working time cap is stipulated in the employment contract an average of 48 hours, a week is presumed. Reg 4(2) of WTR goes further to provide that the employer should take active steps to ensure that the health and safety of the employee are considered by not surpassing this limit (Sargent and Lewis, 2010). This was also evidenced in the case of Barber and others v RJB Mining UK Ltd HC [1999] IRLR 303 where the high court held that the 48-hour limit operates as an implied cap for all employment contacts unless stated otherwise in the contract and consented by both the employer and the employee. If dismissed, Jane can also sue for wrongful termination, though she does not meet the threshold, 52 weeks of continuous service that is required for her to bring a case of wrongful dismissal against her employers. In the case of Silvey v Pendragon plc [2001] IRLR 685 (CA) the plaintiff was dismissed 12 days to his 55th birthday, which would have seen him retire peacefully and awarded his pensions. The plaintiff argued that had the 12 weeks’ notice been given then he would have been entitled to his pension. In this case, Jane does not meet the threshold to bring the case of wrongful dismissal against her employers since she is two weeks short. However, she can still pursue that option as the plaintiff in Harper v Virgin Net Limited [2004] IRLR 390 (CA) did, though unsuccessfully after the appeal by the defendant. In this case, Sally Harper was dismissed 33 days short of 1 year continuous employment period. She still decided to explore the wrongful dismissal option even though she did not meet the threshold and was later awarded damages. The Employment Tribunal established that she had been wrongfully dismissed by not being given sufficient notice of 3 months, which would have entitled her to pension and also the opportunity to bring a case of wrongful dismissal against the defendant. After the defendant’s appeal, however, the Court of Appeal dismissed the earlier decision by the Employment Tribunal stating that it was an impermissible attempt to circumvent the statutory provisions of the qualification period required. The court held that such an award is legally not available and cannot be explored. However, since the statutory scheme was amended, Jane can now pursue that option. In s. 97 (2)(b) of the ERA, the effective date of termination has now been postponed to the end of the statutory period of notice for termination (Moffat, 2011). Therefore, the real date of Jane’s dismissal will be three months after the date she is dismissed. Since she only required two weeks to meet the threshold, she can now sue for wrongful termination and will also be entitled to her full accrued pension. Similarly, all the outstanding pay, which will be her three month’s salary plus any other pay outstanding, for example, the 10 day’s holiday pay that has been withheld, will be payable. Question 3 Facts Superchoc Limited Company has of late faced tough economic times and has consistently been cutting the number of permanent staffs; instead, it has chosen to increase the pool of ‘casual operatives’ to help during the demand peaks. Many of those casual operatives are the ones that were formerly employed by the company and had been made redundant. The company had offered them re-engagement by requiring them to sign submission letters and return copies in order to be engaged on a ‘self-employed’ basis. The letters expressly stated that the casual workers will be providing the services to the company on an ad hoc and casual basis. The casual operatives, the letter pointed out, were not employees of the company and so will not be entitled to any fringe benefits that employees are entitled to including pension rights, holidays and sick pays. The casual operatives were expected to work when work has been provided though they were not under obligation to accept the work offered. Similarly, the company was not obliged to provide work to the casual operatives but could do so if it is available. The letter also provided that the casual operatives will be paid a basic rate of ?44 per eight-hour shift in addition to ?8 per shift attendance allowance. The income tax and national insurance contributions were deducted by the company at base just like they do for their employees, but the letter points out that it is doing the same for its casual operatives ‘for administrative convenience only’. There are two casual operatives who have moved to court seeking to be furnished with written statements of their particulars of employment under s.1 of the ERA 1996. This legislation requires employers to provide their employees with written statements of their particulars of employments (Collins, 2010). The company contends that none of the casual operatives are its ‘employees. The employment tribunal thus has to determine whether they are actually employees or not. Argument a) Employment status Section 230 of the ERA 1996 defines an employee as that individual who has ‘entered into, or works under a contract of employment’ (Barnard, 2006). The issue therefore is determining whether there is an employment contract in existence. This may be blurred because a contract can be entered expressly or impliedly by the parties concerned. Within the context of s.230 of the ERA, the following points have to be determined: Was there one overarching contract or was the assignment a series or succession of shorter assignments? If it was a single contract, was there a clause that obligated the ‘employee’ to perform a certain amount of work so that such work can continue being provided; was there a degree of control? A case that provides useful insight into the determination of employee status is the Stevedoring and Haulage Services Limited v Fuller and others [2001] IRLR 627 CA. In this case Mr. Fuller and his fellow applicants had been employed as casual workers after accepting redundant terms for a while. They also accepted a letter stating that they are not employees and there was no obligation by the employer to provide work and there was no obligation by the casual operatives to accept that work. However, the employer imposed some obligations on them so that they accepted the work offered and be available as and when required. In turn the company gave Fuller and the other former employees priority over other casual operatives. The EAT established that the operatives, by virtue of having being controlled by the employer, were actually in an employer-employee relationship. Superchoc Company did not exercise such control over its casual operatives and so the most probable outcome is that the Tribunal will determine that the relationship between the casual operatives, and the company is not employer-employee. Unlike in the cited case, the company and the casual operatives could not compel one another to act but could just rely on mutual agreement for business efficacy. The contract that they were under was not overarching but just a series of assignments as and when available. The implied terms to that extent reflected the relationship between the two parties (Collins, 2003). However, even if the company clearly provides that it is not engaging the casual operatives in employees’ capacity but behaves or treats them as employees then the relationship changes to be employer-employee. This was evidenced in Protectacoat Firthglow v Szilagyi [2009] EWCA Civ 98 CA where there was an employer in a position to dictate the terms of agreement, and the other party had to oblige with the terms or not get the work. This case brought about the aspect of true intentions of the employer or employee and concluded that the true intentions can only be told not from the writing or phrasing of the terms but from the actions of either party. It further provided that no matter how many disclaimers the employer provides that he is engaging a person on an ad hoc and casual basis, if he imposes some requirements that are ideally the obligations of an employee, and the casual operative goes along with them, then the operative qualifies as an employee. The true nature of the contractual relationship is that of an employer and employee. In this case the two operatives can claim that the company’s insistence that the tax obligations and national insurance contributions be deducted from the base, just like it does for other employees, qualified them as employees based on the aforementioned principle. b) Level of wages of the casual operatives The casual operatives are being paid a basic rate of ?44 per eight-hour shift in addition to ?8 per shift attendance allowance. According to the National Minimum Wage Act and the National Minimum Wage Regulations, the national minimum wage as from 1st April 1999 should be not lower than ?3.6o per hour. The operatives are getting an average of ?5.5 per hour. Therefore, their rate is above the minimum prescribed and can do little about it. A move to negotiate for higher pay may, in fact be detrimental to their earnings because the company may decide to lower their attendance allowance in order to substantiate the basic rate just like in the case of Laird v A K Stoddart Ltd [2001] IRLR 591 EAT. In this case, the plaintiff was agitating for better pay even though his was above the minimum. The defendant decided to less his allowance to increase his basic rate. The plaintiff moved to court arguing that that move amounted to unlawful deduction, but the court held that the defendant was permitted to consolidate that allowance in order to pay the basic wage. Therefore, the only way to agitate for a better pay will be through collective bargaining through a trade union. Question 4 Facts Tristan is an employee of Superchoc Company Limited and works in their Human Resources Department. He is tasked with processing job applications. His departmental manager has clearly instructed him to ‘lose’ any job applications for casual operative positions that are seen to be coming from ‘Muslim’ or ‘Asians'. Tristan is uncomfortable with his senior’s directions and is considering the legal measures and protections he may have if he decides to dissent. Argument The right not to be discriminated against on the basis of religion or belief is envisaged under s.9 EA and s.10 EA (Cabrelli, 2010). In relation to discrimination, it points out that there can be direct discrimination, indirect discrimination, victimization and harassment. The case touches on harassment. The employer has furnished Tristan with provisions that are making his environment intolerable. It is effectively putting the employee under a disadvantaged position as stated in Jeremiah v Ministry of Defence [1979] IRLR 436 and Garry v London Borough of Ealing [2001] IRLR 681 (CA). According to s.19(2)(d) EA the only way that the company can justify this policy is by proving that the discrimination was a proportionate means of achieving a legitimate aim. Just like in the case of Bilka-Kaufhaus GmbH v Weber von Hartz ECJ [1986] IRLR 317, the company will have to prove that the discriminatory means so chosen to achieve the objectives were both extremely appropriate and necessary. The justification must therefore be objective. The right against being harassed is envisaged in Reg. 5 of the Employment Equality Regulations 2003 (Collins, 2010). Under this Tristan can decide to resign and then sue for constructive dismissal. Saini v All Saints Haque Centre and others [2009] IRLR 74 the court listening to the cases established the following fact, that Reg. 5(1)(b) provides it will be breached when an employee, holding some particular religious or other protected beliefs, is subjected to harassment based on those beliefs. It will suffice if the employee can prove that the employer is pursuing a discrimination policy that is detrimental to him or others (Moffat, 2011). In Weathersfield Ltd t/a Van & Truck Rentals v Sargent [1999] IRLR 94 CA Mrs. Sargent secured a job as a receptionist. Mrs. Sargent was given a policy of risk assessment that discriminated against the coloureds and the Asians. She was upset by the policy and resigned without giving a reason and then instituted a complaint of racial discrimination. The Employment tribunal awarded her ?5000 compensation, stating that as a result of being asked to carry out a racially discriminating policy, she had suffered detriment. After appeal by the defendant, the EAT further provided that she was constructively dismissed, and that she was treated less favourably by the management by presuming that she was somebody who was prepared to carry out the unlawful instructions of the employer. In the case of being less favourably treated the CA concluded that employees can be considered unfavourably treated on racial grounds even if the treatment is not against them or concerns another racial group Therefore, Tristan can sue for constructive dismissal alongside unfavourable treatment, and the company will be liable to compensate him. He can also seek an injunction or a declaration stopping him from being asked to carry out such racially discriminative practices. Lastly, he may choose to work under protest (Ullman, 2003). References Primary Sources Aparau v Iceland Frozen Food plc EAT [1996] IRLR 119 Barber and others v RJB Mining UK Ltd HC [1999] IRLR 303 Bilka-Kaufhaus GmbH v Weber von Hartz ECJ [1986] IRLR 317 Bundett-Coutts and others v Hertfordshire County Council [1984] IRLR 91 Employment Equality Regulations 2003 Employment Rights Act 1998 European Convention for the protection of Human Rights and Fundamental Freedoms ECHR Garry v London Borough of Ealing [2001] IRLR 681 (CA) Gascol Conversions Ltd v Mercer CA [1974] IRLR 155 Harper v Virgin Net Limited [2004] IRLR 390 (CA) Jeremiah v Ministry of Defence [1979] IRLR 436 Johnstone v. Bloomsbury Health Authority [1991] IRLR 118 CA Laird v A K Stoddart Ltd [2001] IRLR 591 EAT Macari v Celtic FC ct of session [1999] IRLR 788 National Minimum Wage Act National Minimum Wage Regulations Protectacoat Firthglow v Szilagyi [2009] EWCA Civ 98 CA Saini v All Saints Haque Centre and others [2009] IRLR 74 Sarker v South Tees Acute Hospital NHS Trust [1997] IRLR 673 (EAT) Silvey v Pendragon plc [2001] IRLR 685 (CA) Stevedoring and Haulage Services Limited v Fuller and others [2001] IRLR 627 CA System Floors (UK) Ltd v Daniel EAT [1981] IRLR 475 Weathersfield Ltd t/a Van & Truck Rentals v Sargent [1999] IRLR 94 CA Working Time Regulations 1998 Secondary Sources Barnard, C., 2006. EC Employment Law. Oxford: OUP. Beale, B., and Furmston, E., 2008. Contract: Cases and Materials. Oxford: OUP. Cabrelli, D., 2010. Employment Law. London: Longman. Collins, H., 2003. The Law of Contract: Law in Context. New York: OUP. Collins, H., 2010. Employment Law. Oxford: OUP. Craig, C., 2008. Basic Labour and Employment Law for Paralegals. New York: Aspen Publishers Online. Moffat, J., 2011. Employment Law. Oxford: OUP. Sargeant, M., and Lewis, D., 2010. Employment Law. London: Addison-Wesley Longman. Ullman, V., 2003. Labour and Employment Law. London: Cengage Learning. Read More