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PH311 Employee Law And Relations
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PH311 Employee Law And Relations
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Course Code: PH311
University: Greenwich School Of Management
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Country: United Kingdom
Question:
Case Study
ABC Ltd is an independent software house employing 250 staff. Its business involves the production and on-going maintenance of specialised software which is used by car dealerships for stock control and accounting purposes. New versions of its core products are developed every 18 to 24 months. The business is fiercely competitive, ABC being relatively small players in a large international market. They survive by maintaining their 800-strong customer base, serving these businesses well and involving them in ongoing developmental and maintenance issues through a ‘user group’ which meets each month.
ABC employs a twelve-strong sales team who are seen by senior managers as being central to the organisation’s success and future survival. Their role is to maintain good relationships with established customers, to seek out new business wherever possible, to ensure that clients are happy to invest in new versions of software packages as they come on stream and to liaise with the ‘user group’. The latter involves running formal meetings which are always followed by social events at which ABC managers entertain their clients late into the night in pubs, clubs and restaurants.
Steve Brown has been the Sales Director at ABC for as long as anyone can remember. He is widely considered to have managed the sales team very effectively, while also maintaining excellent relations with major clients. Despite attempts to persuade him otherwise he has now decided to take early retirement. He and his wife plan to use the substantial commission he has earned over the years to travel the world in some style. A replacement thus needs to be found.
It is decided that an exclusively internal recruitment exercise will take place, that Steve’s job will not be advertised outside ABC, and that a relatively informal selection procedure will be used to install a replacement quickly. No formal advertisement is drawn up. Instead a meeting of the twelve sales staff is called at which Steve Brown’s retirement is announced by the Chief Executive, Paul MacBarrel. At the same time he states that while Steve is working his notice a replacement will be appointed to work alongside him for a few weeks before he leaves. “If any of you are interested in being considered for the position” he says “drop me an email”. Later that day he receives four emails from long-standing members of the sales team putting themselves forward. The next day Paul meets with his Finance Director, his Company Secretary and Steve to make a decision about who should be promoted to the vital role of Sales Director.
The first candidate they consider is Joan Keenan. Joan is a very good recent recruit and one of only two women currently employed as sales people at ABC. The senior managers quickly decide to reject her application. She is a good deal younger than most of the team she would be managing and they doubt that a predominantly older male team would take at all kindly to being managed by a young woman. They are also concerned about the impact Joan’s appointment would have on the mainly older, male customers who make up the user group and who are used to being entertained by others of a similar ilk after the ‘user group’ meetings.
The second candidate is Aldo Viscida. He is in his early forties and is a brilliant salesman. He has been employed at ABC for some years, having emigrated from Milan in the 1980s. He regularly tops the monthly table for sales commission, having won many bonuses and prizes over the years. He is respected by the other employees on his team. However, his written English is poor and the Sales Director’s role involves writing regular reports as well as much more written communication with clients than is required of the sales team. Aldo’s application is thus also rejected.
The third candidate is David Constant. He is the longest-serving member of the sales team after Steve, and is generally considered to be his deputy in all but name. He is well-liked among the user group members and would do a competent job in the Sales Director’s role. On the downside, from the panel’s point of view, is the fact that David is now 61 and so can be expected to retire soon. He has also recently told them in confidence that his wife has been diagnosed with multiple-sclerosis and they fear that he will have to devote himself to her care sooner than he thinks. This would inevitably mean that he has less energy to put into the more senior role.
It is thus decided that the fourth candidate, Mike Replica, will be appointed to succeed Steve. Mike is 40 years old, very professional and has long been considered a possible future senior manager. He has plenty of interesting ideas about how to develop both the role and the team. The fact that he is married to the Finance Director’s niece and regularly plays golf with Paul MacBarrel is not considered to be problematic. After all, why should he be prevented from being promoted simply because of these relationships? It would be unfair to bar him on that account, particularly when he has the innovative ideas required to take the sales team forward and improve its performance.
Among Mike Replica’s ideas are the following:
Move to a payment arrangement that is wholly commission-based. At present the sales team add, on average, 20% or so to their monthly salaries in commission payments. Mike would like all pay to be at risk so that 100% of earnings were dependant on sales targets being met. Mike plans to introduce this new system with immediate effect.
Dismiss, as a matter of policy, the poorest performing members of the sales team each year and replace them. The identity of the leavers should be determined purely on the basis of the value of new sales achieved (or not achieved). Not only should this policy result in poorer performers being replaced over time with stronger ones, it should also boost energy-levels generally and increase the hours the team puts in.
To require all members of the sales team to undergo regular medicals with the company doctor with a view to establishing their fitness levels. Those who are overweight would then be required to diet until they reach a target weight, while smokers would be required to attend classes aimed at persuading them to give up.
Using the relevant case laws, answer the following questions:
Critically examine the legal risks that ABC Ltd face in taking the course of action outlined in this case?
Critically discuss the defences available for ABC Ltd to deploy should an aggrieved employee or would-be employee decide to bring a tribunal case? How strong a case could be mounted?
Evaluate the employment relations issues that could result within the organisation if the senior management team were to proceed with the course of action as described in the case study?
Answer:
Introduction
The process of selection and recruitment of employees is the one of the most core operations of an organization. In case of external recruitment individuals not belonging to the organization are selected and in case of internal the individuals from the existing workforce are selected to take up a new position. The process must be such that it provides the maximum benefit with respect to the organization along with legal and ethical compliance. When choosing an employee the organization has to ensure that they do not engage in any kind of discrimination with respect to gender, age, religion, sexual orientation, disabilities, pregnancy, marital status and pregnancy according to the Equality Act 2010 (Marchiondo, Ran and Cortina 2015). The recruiters should only base the selection process on the merits and capabilities of an individual and the company should comply with the provisions of Employ Relation Act 1999, Health & Safety at Work Act 1974 and Human Rights Act 1998 (Smith and Griffin 2014).
Legal Risk in Selection process and Action Plan
The first legal risk which has been identified in the selection process in relation to the rejection of Joan Keenan as the sales executive is the breach of provisions with respect to the Equality Act 2010. The Act provides nine protected characteristics against which any kind of discrimination is illegal. One of those nine protected characteristics is that of gender of an individual. An organization is not allowed to discriminate directly or indirectly between individuals of a different sex with respect to its operation according to Section 13, 14 and 19 of the Act (Thornton 2013).
In this case the application made by Joan Keenan has been rejected as she is a woman. According to the management she would not be able to entertain the organization clients and the experienced male employees of the sales team would not be comfortable to work under her as she is a woman (Rippon et al. 2013). This direct discrimination with respect to sex done by the organization to Joan as she is not awarded the position of the executive in spite of her capabilities (Brouwers et al. 2016).
The second legal risk which has been identified in the recruitment and selection process of the organization is the discrimination on the basis of age of an individual. An organization is not allowed to discriminate between the age of the employee when it comes to appraisal and selection (Selwyn and Emir 2014). Age is one of the nine protected characteristics as provided by the Equality Act 2010. No direct indirect combined discrimination can be done against a person based on his or her agent according to section 13, 14 and 19 of the Act (Romero and O’shea 2013).
The organization has been subjected to the risk of age discrimination in the case of David Constant (Truxillo et al. 2017). The employee is in his early forties and one of the most experienced employee of the organization. He also has a good reputation among the other employees and is well accustomed to the job of an executive (Craven 2015).. His application has been rejected on the basis that he is 61 years of age and would retire soon. The company has also made an assumption that as his wife is not well he would not be able to give time to the company. In the case of Horsey v Dyfed County Council [1982] IRLR 395 the court held that the generalized assumption and towards a particular situation made by the organization would account to discrimination. In the case of Homer v Chief Constable of West Yorkshire Police [2012] the court ruled that the near retirement of the plaintiff was directly related to his age and thus the discrimination based on retirement was indirect age discrimination (Ruthergien 2016).
The third risk which has been identified in this case is the risk of racial discrimination. The terms racial discrimination is not only related to the race of the individual but also on the grounds of national origin and ethnic. Before the implementation of Equality Act 1990 racial discrimination was dealt by the Race relation Act 1976 (Kubasek, Brenna and Browne 2016). A person cannot be discriminated if he or she is not good in a particular language but is qualified enough to handle the job. The company has been involved in racial discrimination as they have rejected the application made by Aldo Viscida based on his inefficiency in English language as he is an Italian.
According to the directors duty is is the responsibility of the directors to work towards the best interest of the company without giving importance to any personal relationship. The selected candidate Mike Replica like the other candidates has an adequate qualification to be selected as the sales executive. However the fact that his is related to the final executive of the company who is taking part in the selection and he has friendship with the chairman of the company can be used by the employees who have not been selected to prove that there have been discrimination against them (Freedland et al. 2016).
It is the duty of organization to ensure that the employees do not work for more than 48 hours in a week. The plan made by the new CEO would increase the working hours of the employees as a result it would be against the provisions of workplace Health and Safety at Work Act 1974 (Golding and Howe 2015)
The terms of the employment contract cannot be changed on the wish of the management also thus the changing of the payment structure would account to the breach of contract.
The dieting plan and smoking giving up classes proposed by the executive would be against the right to freedom in relation to the Human Rights Act 1998.
An employee cannot be dismissed just because he or she is not performing as well as the others. Any dismissal which is done in an unfair manner would account to an unfair dismissal prohibited by law (Acharya, Baghai and Subramanian 2014).
Defenses available to the organization
The general defenses in relation to the Equality Act are provided in Schedule 9 of the Act. These provisions protect the employer from being unnecessarily penalized with respect to the provisions of the Act. According to part 1 of schedule 9 of the Act a person is not libel for discrimination if it can be proved by him that the court of action was strictly according to the occupational requirement, the requirement has been applied to attain a legitimate objective and the employer has reasonable grounds to believe that the person does not meet the required criteria. Direct age discrimination can also be justified if the employer can show that a specific age is required for the purpose of recruitment.
The employers have to prove that there was a material difference between the person who have been selected and the person whose application has been rejected. In the case of Shamoon v Chief Constable of the Royal Ulster Constabulary 2003 UKHL 11 the plaintiff had claimed sex discrimination as a male candidate had been promoted over her. The court rejected her claim on the basis that the employers had received several complaints from her colleagues in relation to her appraisal which was not in the case of her male competitor.
In case of Joan she can bring a case of sex discrimination against the organization as her application has been rejected on the basis of her gender. The organization feels that as she is a woman she would not be able to handle the clients and entertain them unofficially as it was done by the previous sales executive. Joan can claim that she had similar qualifications to that of the selected candidate and her application was rejected on the basis of her protected characteristic.
The organization has to prove in this case that there is a material difference between the selected candidate and that off the claimant. The burden of proof with respect to dismissing the claim is on the organization. However the organization cannot claim that she has not been selected as she would not be able to entertain the clients at night as such activities do not arise in the normal course of business.
In case of age discrimination it can be claimed by David that he has been discriminated on the basis of his age and on a general assumption that he would take care of his wife and not be able to give time to the company. The organization in this case has to prove that the age of David is essential towards the objectives of the organization. The organizations in the current situation need an executive who can serve as a long term executive in order to maintain its small customer base in the long run. As David is 61 year old he would not be able continue for long with the organization the company can claim the defense that he has not been selected in order to fulfill a legitimate aim.
With respect to the racial discrimination claim the claimant Aldo Viscada can provide that he has been discriminated on the basis of his national origin and his weakness in English language in spite of his good record as a sales team employee. In this case the organization will have the burden of proof to establish that English communication skills would be a key aspect for the role of sales executive. The organization would have to prove that the inefficiency of the claimant with respect to English language will be a decisive factor towards his role and his application has been rejected solely based on this inefficiency (Conley 2014).
It is the duty of the employer to ensure the health and safety of the employees. According to the action plan the employees would have to put in extra hours of work which would result in disturbing their work life balance and as a result the employees may have to face health issues. The action plan formed b the new CEO which would force the employees to work extra hours in order to get their salary can be challenged by the employees on the basis of health and safety measures. The organization in this case may argue that they have not risen the working hours officially and there is no force applied on the employees to work extra.
Employee Relations
The effort given by an organization to maintain the relationship between the employee and the employer are known as employee relations. A consistent and fair treatment is provided to the employees by the organization with respect to a good employee relation program so that the employees give extra effort towards their job and stay loyal towards the company. Employee’s relation also has the objectives to addresses issues arising out of the work place (Howe 2015). The programs with respect to employee relation form an essential part of the human resource management strategy so that the work force can be used effectively in order to achieve the organizations objectives (Ruggie 2013).
The workforce is one of the most important elements which constitute the organization. It is impossible for an organization to work without an efficient workforce. In order to operate efficiently the employees and employers must have a good relationship between them so that they can easily communicate and address the problems they face towards work and ensuring best performance (Blau and Moncada 2015).
An effective employee relation between the organizations ensures that the employees feel wanted and cared for by the organization. It ensures that the employees can communicate freely with the employers with respect to the problems they face during the course of employments as well as in personal life. An effective employee relation promotes a healthy working environment within the organization along with the organization culture. The organization aims to achieve its objectives through the management functions therefore a good employee relation ensures that the employees provide their best effort towards the operations of the organization ensuring its success.
In the provided scenario it is evident that the senior management wants to boost the sales of the organization. In order to do so they want to change the salary patterns, employees dismissal criteria, working conditions and restrictions on employee freedom. Although some of these activities are illegal that may also have a negative impact on the employee’s relation with the organization. The employees may feel that the only objective of the organization is to make profit and the organization have no interest towards taking care of the employee needs and health. The increased working hours which an employee has been forced to put in indirectly may have an adverse effect on the work life balance of the employee. The discrimination done by the senior management with respect to Age, Gender and Race may hamper the working environment of the organization. The female employees, the experienced employees nearing retirement and employees from different countries would not like to give extra effort as they know that their effort would not be appreciated by the organization. .
Thus the organization must not engage in any kind of discrimination and provide equal opportunity to all when it comes to recruitment and selection this will not only ensure legal compliance but also will enhance the organization culture. They must ensure that they frame policies which are not only beneficial to the organization but also to the employees.
Conclusion
Concluding this paper it can be stated that discrimination within an organization is not acceptable. Discrimination not only hampers the working environment within the organization also attract legal sanctions. In order to initiate an effective selection and recruitment plan the line managers should first make a proper job analysis. They must assess the main requirements and responsibilities of the new position along with its future needs and impact on existing work position. The employers must ensure that they include a diverse workforce within the organization so that the organization culture can be enhanced. Having a diverse workforce also motivates employees having different characteristics as they would think that the organization provides equal opportunities to all. The line managers should also focus on the skills of the individuals rather than any other characteristic while doing recruitment and selection. The skills of an individual are the most important element which is needed by the organization in order to operate effectively.
Recommendations
The organization should ensure that they do involve in any kind of discrimination when it comes to the protected characteristics as provided by the Equality Act 2010. Discrimination not only attracts legal penalties but also create differences with the organization hampering employee relation.
The senior management must only recruit and select employees based on their skills. If an employee has the desired skill towards the job position than the only criteria not to select him or her would be that another applicant has better skills than that person.
In order to enhance sales the company should not implement strategies which would affect the freedom and health of the employees. The company should rather ensure that they motivate the employees using the theories in relation to motivation such as rewards and recognitions. This will not only ensure that the employees provide extra effort towards the organization but also promote health employee relations.
The company should also respect the human rights of the employees and understand that they are not allowed to force employees to go on diet and anti smoking classes.
References
Acharya, V.V., Baghai, R.P. and Subramanian, K.V., 2014. Wrongful discharge laws and innovation. Review of Financial Studies, 27(1), pp.301-346.
Bayl?Smith, P.H. and Griffin, B., 2014. Age discrimination in the workplace: identifying as a late?career worker and its relationship with engagement and intended retirement age. Journal of Applied Social Psychology, 44(9), pp.588-599.
Blau, J. and Moncada, A., 2015. Human rights: A primer. Routledge.
Brouwers, E.P.M., Mathijssen, J., Van Bortel, T., Knifton, L., Wahlbeck, K., Van Audenhove, C., Kadri, N., Chang, C., Goud, B.R., Ballester, D. and Tófoli, L.F., 2016. Discrimination in the workplace, reported by people with major depressive disorder: a cross-sectional study in 35 countries. BMJ open, 6(2), p.e009961.
Conley, H., 2014. Trade unions, equal pay and the law in the UK. Economic and Industrial Democracy, 35(2), pp.309-323.
Craven, J.A., 2015. The Employment Relationship. NY Practice Guide: Business and Commercial, 4.
Freedland, M., Bogg, A., Cabrelli, D., Collins, H., Countouris, N., Davies, A.C.L., Deakin, S. and Prassl, J. eds., 2016. The contract of employment. Oxford University Press.
Golding, G. and Howe, J., 2015. Book Review: The Contract of Employment by Mark Irving.
Howe, J.M., 2015. Why do so few employees return to their jobs? In pursuit of a right to work following unfair dismissal. Hart Publishing.
Kubasek, N.K., Brennan, B.A. and Browne, M.N., 2016. The legal environment of business: A critical thinking approach. Pearson.
ortina, L., 2015. Modern discrimination. In The Oxford Handbook of Workplace Discrimination.
Rippon, I., Kneale, D., de Oliveira, C., Demakakos, P. and Steptoe, A., 2013. Perceived age discrimination in older adults. Age and ageing, p.aft146.
Romero-Ortuno, R. and O’shea, D., 2013. Fitness and frailty: opposite ends of a challenging continuum! Will the end of age discrimination make frailty assessments an imperative?.
Ruggie, J.G., 2013. Just Business: Multinational Corporations and Human Rights (Norton Global Ethics Series). WW Norton & Company.
Ruthergien, G., 2016. Employment Discrimination Law, Visions of Equality in Theory and Doctrine. West Academic.
Selwyn, N.M. and Emir, A., 2014. Selwyn’s law of employment. Oxford University Press, USA.
Thornton, M., 2013. Sex Discrimination in Uncertain Times (p. 379). ANU Press.
Truxillo, D.M., Fraccaroli, F., Yaldiz, L.M. and Zaniboni, S., 2017. Age Discrimination at Work. In The Palgrave Handbook of Age Diversity and Work (pp. 447-472). Palgrave Macmillan UK.
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