For a contract of employment to exist one person must employ another to perform a particular task as part of their business in a manner that they dictate. The ordinary principles of the law of contract apply. So in a contract of employment there must be an offer and an acceptance, which is in effect the agreement. There must be: an intention to create legal relations, consideration, capacity, consent of the parties, and no mistake, misinterpretation, duress or undue influence.
In addition, the contract must not be illegal. It must accord with the legislation included in Box 16.1. Certain written particulars have to be given to the employees to accord with the Employment Rights Act 1996 (ERA). Employers must provide all employees (full- or part- time) with written particulars unless the employee has entered into a written contract with the employer containing all of the relevant terms.
Box 16.1 Employment legislation
Individual/issue Examples of protective legislation
Age Code of Practice on Age Diversity in Employment
Agency workers Working Time Regulations 1998, National Minimum Wage Regulations 1999
Carers Maternity and Parental Leave etc. Regulations 1999
Colour Race Relations Act 1976 (RRA)
Disability Disability Discrimination Act 1996
Employee representative status Employment Rights Act 1996 (ERA) Employees exercising a statutory right ERA
Employees on fixed-term contracts Fixed–Term Employees (Prevention of Less Favourable Treatment) Regulations 2002
Ethnic group RRA
Gender Sex Discrimination Act 1975 (SDA)
Gender reassignment SDA
Health and safety representative ERA
Marital status ERA
Individual/issue Examples of protective legislation
Maternity ERA and Maternity and Parental Leave etc.
Regulations 1999
Nationality RRA
Parental status Maternity and Parental Leave etc. Regulations 1999 Part-time employees Part-Time Workers (Prevention of Less Favourable
Treatment) Regulations 2000
Pregnancy ERA and SDA
Race RRA
Religion Planned legislation
Reservists Reserve Forces (Safeguard of Employment) Act 1985
Sexual orientation Planned legislation
Shop workers who refuse to work on Sundays
ERA
Trade union membership Trade Union and Labour Relations (Consolidation) Act 1992
Trustees of occupational pension schemes
ERA
Unfair dismissal ERA
Whistleblowing Public Interest Disclosure Act 1998
Source: Osman (2003).
Maternity
Under the ERA a pregnant employee who has, on the advice of her doctor, midwife or health visitor, made an appointment to obtain antenatal care must have the time off to keep it and must also be paid. An employer, who, acting unreasonably, does not give the employee these rights can be taken to a tribunal by the employee, but this must normally be during the first three months following the employer’s refusal. Employees with two or more years’ service are entitled to maternity leave from the 11th week before the birth, with the right to return up to 29 weeks after the birth, with statutory maternity pay payable for 18 weeks plus paid time for antenatal care.
Discrimination
The number of employers subject to litigation arising from perceived or actual contravention of employment legislation governing discrimination has risen sharply in recent years. Dis- crimination is prohibited in relation to those protected regarding recruitment, pay and benefits, promotion, training, terms and conditions, transfers, dismissal, action short of dismissal and any other detriment.
Whistleblowing
Employers have to take account of the relatively new form of influence on management, whistleblowing, which describes the practice of an employee metaphorically blowing a whis- tle to draw the attention of those outside of the business to some form of unethical practice inside the business. Previously this was done by individuals taking a personal risk with their
Operational Risk Management 279 employment. After the enactment of the Public Interest Disclosure Act 1998, workers who
“blow the whistle” about any wrongdoing within their employer’s organisation are protected (as far as the “umbrella” of the Act extends). The provisions within the Act protect workers from being subjected to what it calls “a detriment” by their employer. The DTI guidance6states that “detriment may take many forms such as denial of promotion, facilities or training oppor- tunities which the employer would otherwise have offered”. Additionally, employees who are
“protected” by the provisions may make a claim for unfair dismissal if they are dismissed for making a protected disclosure. A qualifying disclosure will be a protected disclosure where it is made to the worker’s employer or to a person whom the worker reasonably believes to be solely or mainly responsible for the relevant failure. Particular kinds of disclosures qualify for protection which collectively are termed “qualifying disclosures”. Qualifying disclosures are disclosures of information which the worker reasonably believes show that one or more of the following issues is currently taking place, previously took place or is likely to happen in the future: a criminal offence; the breach of a legal obligation; a miscarriage of justice; a danger to health or safety of any individual; damage to the environment; or the deliberate concealment of information tending to show any of the issues just referred to.
Dismissal
Dismissal of a member of staff is never just about managing one individual. Methods of dismissal become part of a business’s culture, can modify the behaviour of remaining staff and, in the wider context, if a trend emerges, can increase or decrease the attractiveness of the business to potential employees. The risk for any employer in releasing a member of staff is not adhering to the prevailing legislation relating to wrongful and unfair dismissal. An employee can claim that they were wrongfully dismissed in a common law action for breach of contract in the civil courts or in an industrial tribunal. This is relevant where the employee claims that the employer did not dismiss him or her in accordance with their contract. An example of this type of claim is where the employer had failed to give proper notice as recorded in the contract. The amount of the compensation or damages awarded would normally aim at placing the employee in the financial position in which they would have been, had the wrongful dismissal not taken place. Additionally, businesses have to be mindful of not being guilty of unfair dismissal. Since the Trade Union and Labour Relations (Consolidation) Act 1992, as amended by the Employment Rights (Dispute Resolution) Act 1998, employees have the right not to be unfairly dismissed. The grounds for classifying dismissal as being unfair as defined by the Act include: employees taking or seeking maternity, paternity or adoption leave;
requesting flexible working arrangements; seeking to assert a statutory employment protection right; taking or proposing certain types of action on health and safety grounds; and performing or proposing to perform duties relevant to his or her role as an occupational pension scheme trustee.
Trade Unions
The change in how businesses deal with unions has been brought about by the changing political, economic and industrial context in which businesses trade and not by a shift in management ideology (Pinnington and Edwards 2000). The Conservative government, elected
6http://www.dti.gov.uk/er/individual/pidguide-pl502.htm
in 1979 with Margaret Thatcher as Prime Minister, was committed to reducing union power which it saw as one of the primary causes of Britain’s poor performance internationally.
Consequently, through numerous pieces of legislation between 1979 and 1997, the government restricted the ability of the unions to take industrial action and regulated their internal affairs in a way that the law had not previously done. The government also reduced the influence of the unions in the public sector, particularly at its intelligence centre known as GCHQ.