Employment Law: Rights, Duties, and Termination Processes

This report provides a comprehensive overview of employment law, focusing on the Employment Rights Act and the obligations of employers and employees. It details the necessity of employment contracts, outlining standard clauses and their benefits. The report explores the sources of employment law, including common law, legislation, and EU law, emphasizing the duties of both parties, such as obedience, fidelity, and confidentiality. It examines case law, illustrating how courts interpret these duties and the consequences of breaches. The report also delves into the process of termination, highlighting employer obligations, fair dismissal practices, and the significance of notice periods as per the Act. It covers employee entitlements regarding working hours, pay, and other benefits, providing a thorough understanding of the legal framework governing employment relationships.

EMPLOYMENT LAW

In accordance to the Employment Rights Act, every employer and employee is under an
obligation to enter into an employment contract before associating with each other. It is an
established law that organizations not creating employment contracts shall be liable to pay a fine
amount equivalent to a month's salary. There are several benefits which are conferred by such an
agreement on the employers as well as the employees (Selwyn and Emir, 2014). It provides
certainty and restricts creeping in of any ambiguity in the relation and specifically covers some
of the important aspects which have the potential to cause disputes and inconsistencies in the
employment relation. Some of the standard clauses covered in a contract are that of Termination,
Dispute Settlement, Notice Period, Restriction on Poaching and so on. The fundamental sources
of derivation of Employment laws are Common Law, Legislations, European Union Law and
Customs and Practices prevalent in Business parlance. The Common law on Contracts
formulates to be the basis of any employment relation, on the basis of which several terms and
conditions are included in the contract and made applicable on the parties. Apart from this the
English Parliament has enacted the Employment Rights Act, which specifically covers the rights
and obligations arising out of a contract. There are several duties which are imposed on the
employer and employee under the Common law. Some of the duties which have been burdened
on the employees are Duty of Obedience, Fidelity, Mutual Trust and Confidence, Care and Skill.
In accordance to Duty of Obedience, an employee is under an obligation to act in
accordance to the orders and instructions of the employer. In the case of Draper v. Mears Ltd.
(2006), the Tribunal considered this aspect and held that an employee is mandated to act in
compliance with the directions of the employer, in failure of which a dismissal process can be
initiated. Further it was also held that it is also important to analyze whether the instruction was
reasonable and relevant in nature or not (Arnow-Richman, 2010). Hence, in the case of a
unreasonable order from the end of an employer, employee can choose to not abide by it and the
same cannot become the basis of the termination of employment. In the Draper's case, the
employee had committed a drink and drive incident, in pursuance to which the employer had
initiated a disciplinary procedure for considering the dismissal of the said employee can be
considered as reasonable and is completely within the limits of law. Further it is important to
consider the terms of the contract which have been included in the employment contract as well
as the customs and practices prevalent in the organization to determine the validity of the
instructions furthered by the employer. In the case of Ingram v. Bristol Street Parts (2006) the
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court considered compliance of the common law duties as the 'condition essential' to the
contractual relationship. In the case of Turner v. Mason (1845) the courts considered a case
wherein the instructions given by the employers were considered to be unlawful and a potential
threat to the safety of the employee. In such a case the act of non-compliance on the end of the
employee was considered as completely justifiable (Hepple, 2013). It was further opined that the
safety and security of the employees health and otherwise shall be considered as an utmost
priority.
Another implicit obligation which the employer can presume to exist is that of a
cooperating nature on the part of the employee, in addition to putting in every effort to deliver
the best of the capabilities. Hence, it is an implied duty on the employee to act in consonance
with the interests of the employee and ensure an efficient delivery of work. In a recent judgement
one of the High Courts of the nation has reiterated the requirement of abiding by the duty of
fidelity in the case of Thomson Ecology Ltd and another v APEM Ltd and others (2013). It was
held in this case that duty of fidelity is one of the implied terms or duties which is applicable on
the employee (Taylor and Emir, 2015). In order to explain this duty the court characterized it as
an obligation to always act in good faith and with truthfulness, while working for an employee.
Further the court established a distinction between fiduciary duties and duty of fidelity, wherein
the former expects the employees to act in favour of the employees, on the other hand, the latter
was defined as merely acting with the consideration of interests of the employer. The rationale
behind enumerating this distinction was to establish the fact that the employees are not expected
to keep their own interests subordinate to that of the organization. The case goes not on identify
some of the aspects which are covered under the duty of fidelity. The two most important duties
are that of a duty to not compete and a duty of confidentiality and duty not to entice the other
colleagues. During the course of employment, the employee is under a strict responsibility to not
disclose any of the confidential data or information to a third person or the competitors. Further
he is also not entitled to use any such information for personal use in order to gain unfair or
discriminatory benefits. In the case of Eurasian Natural Resources Corporations Ltd. v. Judge
(2014) it was held by the court that breach of this duty of confidentiality can also be a basis of
termination of the employment (Korn and Sethi, 2011). Further the case defined confidential
information to include all the data and information pertaining to the corporate is characterized as
confidential or can be judged through its very nature as confidential. The employers have been
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empowered to terminate the employment of the employees who act on breach of any of these
duties, subject to some exceptions. It is important to judge the intensity of the breach as well as
the extent to which injury or harm has been caused. Therefore, the courts after considering all
these elements and the manner in which they conduct themselves at work, shall determine the
validity of their acts. Therefore, in accordance to the above mentioned laws and duties, an
employer is empowered to terminate the employment of an employee, without breaching the
boundaries established by law and the terms of the contract.
Both employer and employee have the power to end their employment contract, however
this power can be subjected to the provisions of law as well as terms of the contract. The
Employment Rights Act, 1996 specifically imposes several obligations on the employer for
undertaking the process of termination of the employment. There are various repercussions
which shall be considered by the employer before ending the agreement with any of the
employees (Employment Rights Act 1996, 2016). Termination by the employer can be justified
only if it is based on fair and lawful issues. Hence, terminating an individual's job by considering
any of the protected characteristics enumerated in the Equal Opportunities Act shall amount to be
a discrimination and unlawful on the part of the employer. In such a case the courts can make the
employers liable to continue the employment of the concerned employee as well as pay damages
for the loss or injury sustained by such a person. As laid down in the case of Chandhok & Anor.
v. Tirkee (2014), all the employees working in a business environment are entitled to the right
not to be discriminated and enjoy equal opportunities at workplace (Freedland and et. al., 2016).
In accordance to section 86 of the Act, the employee is entitled to receive a minimum period of
notice before ending the service with a particular employer. Hence, an employee working for a
period of one month or more is required to be given atleast a week's notice before terminating the
services. This is one of the statutory right which has been conferred upon the employee, in
addition to being a contractual right. As per the general rule the employment contract sets out the
manner in which an employee shall be provided with the notice period on termination of the
employment. Such a term of the contract shall be valid as far as it is in compliance with the
statutory provision of Section 86. In the case of Hamsard Ltd. and others v. Boots UK Ltd (2013)
elaborated on the concept of reasonable notice, wherein it was opined that period of notice of
termination may vary from case to case. Hence, the element of reasonability is highly determined
by the fact surrounding the situation and the time when it is served on the employee.
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In accordance to the statutory right to notice of an employee, a notice period of minimum
one week shall be given to any employee who has served the employer for more than one month.
Where as in the case if the employees has served for a period of two years or more than he is
entitled to a notice period of minimum 2 weeks and maximum 12 weeks (Dismissal: your rights,
2016). This is the statutory right which shall be compulsorily applied in the case of every
employment contract. However, through the means of a contract individual parties can vary the
time period of notice, by being in compliance with the minimum requirement of section 86.
Hence, in the event any of the employment contract is in breach of the statutory right then
section 86 is automatically made applicable. Further, the courts have pronounced an exception to
this rule in the cases of gross negligence or misconduct on the part of the employee. A similar
finding was made by the court in the case of C&S Associates Ltd. v. Enterprises Insurance
Company Plc. (2015), wherein it was held that summary dismissal of an employee is justified
only in the event of gross misconduct or occurrence of an act which is extremely serious in
nature, and in pursuance to the same the employer terminates the employment without giving
any notice (Stone and Arthurs, 2013). Further it was also mentioned that in such cases the
employers have to be very careful and undertake a proper investigation before reaching to any
decision. The procedure so followed shall be completely fair in nature, and the employer should
be able to establish the same in the court of law.
Section 87 of the Act further confers certain rights through section 88-91, in relation to
the normal working hours, benefits and allowances and certain other rights pertaining to
payments and salary. In accordance to Section 88 of the Act the employee has been entitled to
receive payment for the normal working hours as provided by the employment contract. In the
event employer has not imposed any responsibility to work and the employee is ready to work
then the employer shall be liable to make appropriate payments to the employees. Further, if the
employee has taken a sick leave or is unable to work due to some injury then also the employer
shall give away the requisite salary. The section also provides that even if the employee is not
present at work, and the same is completely in accordance to the terms of the employment
contract then the also the employee shall be entitled to receive the requisite salary (Countouris,
2016.). In the case of Milson v. Hope (2012) the courts have affirmed that the employer is not
imposed with this liability if the employee is leaving the job not in pursuance to the notice served
by the employer. The applicability of section 88 was restricted to the cases where a notice was
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served in accordance to the section 86 (1) of the Act. Hence, in the case of The Scotts Company
(UK) Limited v. Budd (2002) the courts have opined that the right of employee to receive
payments for the normal working hours under section 88 is conferred only if the notice has been
served under the section 86 (1) of the Act. In simple words of the employer is serving a notice
for termination is only under the obligation to provide requisite salary to the employee serving
the notice period (McKendrick, 2014. ).
Further section 89 of the Act provides that if there is not stipulated normal working hours
in the employment contract then the employer is required to pay for each week of the notice
period. The section further provides a discretionary power to the employer in presence of the
circumstances. If the employee is willingly undertaking reasonable amount of work then only the
employer is under the liability of make the payments and hence, the liability can be said to be
conditional. This rule has been made subject to the exceptions of sickness, injury, granted leaves
and so on. In this case also the employer is liable for the payments if the employer has
terminated the employment and served the relevant notice. Section 91 of the Act provides that in
the event if any employee is participating in strike during the period of notice then he/she shall
not be entitled to any pay (Employment Rights Act 1996, 2016). Further it is also provided in the
section that if the employee acts in violation to the contract and in pursuance to the same if the
employer has terminated the services then no payments shall be required to be made under
section 88 – 91 of the Act. Lastly, in the event if the employer fails to provide a notice in
pursuance to section 86 (1) of the act, then the liability of damages imposed on the employer
shall be inclusive of all the payments under section 88 – 91 of the Act. Hence these are the
statutory provisions which have been made applicable on the employee and employer in the case
a termination is initiated from the end of the employer.
It can be inferred from the above laid down laws that employer can terminate the services
of the employees only on the fair and lawful reasons. Furthermore, the employer is under an
obligation to serve a notice in accordance to Section 86 of the Employment Rights Act, in failure
of which he shall be liable to pay damages to the employee. On receipt of such a notice the
employee is entitled to receive payments in accordance to section 88 – 91 of the Act and all the
benefits which any other employee of the company is receiving.
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REFERENCES
Books and journals
Arnow-Richman, R., 2010. Just notice: Re-reforming employment at will. UCLA L. Rev. 58. p.1.
Countouris, N., 2016. The changing law of the employment relationship: comparative analyses
in the European context. Routledge.
Freedland, M. and et. al., 2016. The Contract of Employment. Oxford University Press.
Hepple, B., 2013. Back to the future: employment law under the Coalition
government. Industrial Law Journal. 42(3). pp.203-223.
Korn, A. and Sethi, M., 2011. Employment tribunal remedies. Oxford University Press.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Selwyn, N. M. and Emir, A., 2014. Selwyn's law of employment. Oxford University Press, USA.
Stone, K. V. and Arthurs, H. eds., 2013. Rethinking workplace regulation: Beyond the standard
contract of employment. Russell Sage Foundation.
Taylor, S. and Emir, A., 2015. Employment law: an introduction. Oxford University Press, USA.
Online
Dismissal: your rights, 2016. [Online]. Available through:
<https://www.gov.uk/dismissal/overview>. [Accessed on 28th October 2016].
Employment Rights Act 1996, 2016. [Online]. Available through:
<http://www.legislation.gov.uk/ukpga/1996/18/part/IX/crossheading/minimum-period-of-
notice>. [Accessed on 28th October 2016].
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