Legal Risks and Defenses for XYZ Company in Employment Case

XYZ Company
Legal Issues and employment
Legal issues and laws

1. What legal risks might XYZ be taking in following the course of action outlined in this
case?
In the given case Alan McSlick who has been the director of sales in XYZ Limited has chosen to
go for early retirement. To replace the position that has been effectively occupied by Alan
McSlick, an internal recruitment has been adopted. The ten members of sales team were asked to
raise their candidature through e-mails and stand for their position. The Chief Executive Paul
Double-Barrel got four e-mails for their candidature and he discusses the same with the Finance
director. Three propositions have been rejected on several grounds of being too young, bad
communication, and for having personal reasons. Mike Replica has finally been decided to
replace Alan McSlick. He has been chosen for the reason of him having a lot of ideas for the
development of his role as the sales’s director and for the overall improvement of the sales team.
Mike Replica considered as the replacement, is the husband of the niece of Finance Director and
his habit of regular playing golf with chief executive is completely ignored. There are Certain
policies formulated by Mike Replica and these related to payment of sales team, selection and
retention of team and the last one relates to the medical health of the members (Joyce, et al.
2016).
The above case and the condition in which the company is working currently are certain to put
forward the company into various legal risks. These risks are stated as follows (Chan, and Hui,
2014).
 The payment scheme that has been laid out by Mike Replica shall bring a drastic change in the
financial accounts. Earlier an additional commission used to be paid to the sales staff apart from
the usual monthly salaries. Due to this a large sum was flowed from business as employee wages
every year. Due to change in the scheme, the employee wages are all dependent upon the level of
sales. Resultant the financial statements can observe variation as the sales varies. If the sales are
high the working pay is high, and if the sales are low the working pay this can call for an
observation from the side of statutory authorities like income tax authorities who can intervene to
ask why the variations are happening. A legal check could also be assimilated into the company
(Fiksel, 2015). It will not only set up proper recordign and accounting of the imperative
information but also assists in setting up transparency in the business.

 The company, if performs explicitly high on sales, or explicitly low on sales because of the
revised payment method, the picture that the financials lay when compared over years shall get
distorted. A question mark shall be raised on the company’s efficiency for the same. Again the
company shall come in the eyes of the income tax authorities (Taylor, 2015).
 The policy of reviewing the performance of sales team on the basis of achievement of sales level
is completely financial and quantified in every sense. The sense of qualitative factors is lacking.
Some sales staff might be too good at their work, but could be facing certain issues that are
hampering their current performance. The issues could relate to their personal lives that are not
discussed in the public front. Resultant, the expulsion of the employees form the entity based on
their current performance only could create distrust among the company. The dissatisfied
employees could even reach the legal courts and sue the company on several grounds. The
tribunal case could be raised on several grounds and the company would get into a serious legal
fix (Regan, and Hall, 2015).
 The new policy of churning of the sales team comprises of the fact that it shall motivate the staff
to work more and put into more working hours. Some workers might opt for overtime to reach
the sales target. The overtime is not promoted much by the labour unions and is seen with the
eyes of hatred. Any labour union within the organization can stand against and bring a legal suit
upon the company. This shall call upon days of legal roaming by the company’s senior officials.
Further, the labour laws could be violated also if the company’s labor working hours are far
more than the standard that has been set for the performance (Manasa, and Krishnanaik, 2015).
 The new replacement that the company has chosen for the sale’s director post happens to be the
spouse of the company’s financial director. Further, he is also famous for regularly playing golf
with the chief executive officer. Both of the people mentioned are core in making the
replacement decisions. The three applicants that have been rejected have no alliance with the
decision makers (Cheng, et al. 2014). These aggrieved applicants if not taken in favour of the
decision could rise up their aggression in form of filing a case altogether against the company.
The company need to explain their proposition to them and offer certain benefits to stop the
aggression created (Heifetz, and Linsky, 2017).

 The medical help to be initiated for the sales team shall also involve certain expenditure. This
shall also involve a cash outflow from the side of the company. This will affect the cash position
of the company. Considering the effect of all the policies, the current year financials that will be
prepared shall not match up with the average performance that the company has been showing
every year. This can bring the company again in some financial crisis and the performance could
be judged by the investors and the financers. Some of the big investors if doubtful of the
company’s future can file legal case against the company (Reason, 2016).
 Some employees who were having smoke addiction and not wanting to leave the habit could find
it stressful. The level of stress could result to high streess. This could be the case because no such
requirement of anti-smoking is mentioned in their joining contracts and job profile (Burns,
2016).
2. What defenses are available for XYZ to deploy should an aggrieved employee or would-
be employee decide to bring a tribunal case? How strong a case could be mounted?
HOW STRONG A CASE COULD BE MOUNTED ON THE COMPANY
Any employee stays in the organization and works in a coordinated manner when their lies a
harmony between the company and the employees. If nay condition that has been in the contract
is violated either by the company or by the employees, a case could be brought into legal effect
by the aggrieved party. The severity of the case that the employees can raise on the company
depends upon the reason for which the legal help is sought. The case can be too casual to too
dramatic. In the given case it is clearly apparent that the company has no prior contract with the
workers that involve such job conditions. Especially for a company that is just having 150 staff
members, any outrage in even a 5% of them could prove dangerous as the whole working system
of the organization would get hampered. The competitive edge that the company has maintained
in the highly competitive business would get shattered in a matter of minutes (Edelman, 2016).
E.g. the sales team is appointed on the basis of regular sales plus 20% of additional commission.
The risk now is that the salary is completely based on the sales level achieved, that to from the
very day effect. The employees are given no intimation of the same when they joined their