LEVEL 3 - UNIT 6 - EMPLOYMENT LAW SUGGESTED ANSWERS - JUNE 2013

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1 Note to Candidates and Tutors: LEVEL 3 - UNIT 6 - EMPLOYMENT LAW SUGGESTED ANSWERS - JUNE 2013 The purpose of the suggested answers is to provide students and tutors with guidance as to the key points students should have included in their answers to the June 2013 examinations. The suggested answers do not for all questions set out all the points which students may have included in their responses to the questions. Students will have received credit, where applicable, for other points not addressed by the suggested answers. Students and tutors should review the suggested answers in conjunction with the question papers and the Chief Examiners reports which provide feedback on student performance in the examination. SECTION A 1. One advantage of being self employed is that you have more freedom to choose when and where you work. It is also more tax efficient than being an employee. 2. This is discrimination based on marital status which is a protected characteristic under the Equality Act 2010.This is direct discrimination as she is being treated less favourably because of her status as a married woman. 3. TUPE Margaret is being paid less than the minimum wage as required by the National Minimum Wage Act She should be paid 6.19 per hour. 5. Wendy s contract states that she is entitled to two months notice. If it did not, then as she has worked for less than one year, she would only be entitled to one week s notice and benefits in kind for the same period. However, the contractual notice period means that she is entitled to two months net pay plus the value of two months gym membership, two months mobile phone and two months health insurance. 6. A mobility clause compels employees to work at different locations specified by their employer usually other offices/sites. It is used for senior employees or those specifically based across locations. It means that the employer can permanently move their workforce around which helps avoid redundancies and gives them greater flexibility without breaching the contract of employment. 7. Conduct, Capability and Qualifications, Redundancy, Statutory Illegality and Some Other Substantial Reason. Page 1 of 5

2 8. One week unless his contract states otherwise. 9. Mutuality of obligation is referred to as the irreducible minimum for a contract of employment and is the key test for determining the status of an employee. It concerns the provision of work by an employer and the obligation upon an employee to take the work offered, whereas there is no such obligation as between an employer and a worker or the self-employed contractor. If both are obliged to provide and to take the work then it is more likely to be an employment relationship than not. Carmichael v National Power (1999). Scenario 1 Questions SECTION B 1. (a) Ranjeet is an employee and has the requisite two year required to pursue a claim of unfair dismissal under Employment Rights Act He would also have to show he was not in an excluded category (which does not apply here), is claiming within three months and that he was dismissed. Whether Ranjeet was dismissed or whether he walked out thereby resigning is an issue here. Carla was rude to him by what she said, however it needs to be sufficiently serious that it goes to the root of the employer/employee relationship (Western Excavating v Sharpe (1978)). The public criticism is similar to the situation in Morrow v Safeway (2002) where there was found to be a breach in the duty of mutual trust and confidence giving rise to an unfair constructive dismissal claim. Carla s words are probably sufficient as he then went home and feared to return to work. It may appear that by staying away from work that he had resigned or taken her words as a dismissal as two days is a significant period of time. Also, the comment doddery old fool not fit to drive cars could amount to age discrimination which would be a breach of the duty of mutual trust and confidence entitling Ranjeet to resign and claim unfair constructive dismissal. Carla may have a fair reason for dismissing Ranjeet as he did cause a great deal of damage to the Mercedes which shows a lack of capability. However, this is his first offence after a good track record so dismissal may be too extreme, perhaps a written warning, or even a final written warning given the cost of the repairs. Carla has not acted in accordance with the ACAS Code of Practice when effectively dismissing Ranjeet so if he were successful he may be awarded up to 25% additional compensation. However as he does not have two years continuity he will not be able to successfully pursue the claim. 1. (b) Ranjeet is owed 500 commission and three weeks wages in respect of notice which he is entitled to. He may pursue a claim for wrongful dismissal to cover his notice period of three weeks (unless his contract states a longer period) as well as the commission. Ranjeet may also have a potential claim for age discrimination due to Carla s comment about him being a doddery old fool as he may be able to say he was treated less favourably due to his age. This is direct age discrimination under Equality Act Age is a protected characteristic under s4. 2. Restrictive covenants are prima facie void for restraint of trade unless employer can establish a legitimate business interest and that the clause is reasonable to protect this. To be enforceable the clause must be Page 2 of 5

3 reasonable in terms of scope, geographical and time restriction. It would appear to protect a legitimate business interest as direct competitor garages are specified. Three months is a reasonable time period, especially when linked to a 10 mile restriction as this means Ranjeet could still work in car sales, but not nearby. Under the General Billposting case if Ranjeet is successful in a claim of wrongful dismissal he will not be bound by any restrictive covenant in his contract so would be free to work wherever he liked. 3. Ranjeet has worked for Meadows Garages three years so is entitled to three weeks notice unless his contract states a longer period. Carla may pay him in lieu of notice if there is a PILON clause in his contract or if not, parties can agree a payment in lieu. Alternatively Carla may try and argue that his actions in causing so much damage to the Mercedes are gross misconduct and no notice is due. Ranjeet would be entitled to any of the following; reinstatement, reengagement or compensation. He may also apply for a declaration or recommendation in relation to the discrimination. Scenario 2 Questions 1. Factors and test indicating Ella is an employee are; Listed as Bedfordshire sales person Integration part of the company wears uniform Integration/control test BBL choose books she sells Control which is consistent with being an employee BBL produce catalogue Control They are trying to discipline her Control test. 2. Factors and test indicating Ella is self employed; Buys books from BBL Entrepreneurial test-in business on her own account Invoiced Entrepreneurial- as above Does own tax returns Multiple test-inconsistent with being an employee No contract Control- lack of control so is likely to be self employed Pays them commission Multiple test-inconsistent with employee relationship 3. (a) By selling a competitors books whilst working for BBL Ella has breached the duty of fidelity to her employer. Earning income from the sale of these books and not declaring it to BBL amounts to a breach of the duty not to make a secret profit. 3. (b) They should follow the process outlined in the ACAS Code of Practice or contractual disciplinary procedure Investigate by interviewing Ella and witnesses. Page 3 of 5

4 Tell her outcome of investigation Disciplinary action Inform her of meeting and allegations Right to be accompanied Opportunity to give her side Decide action Right of appeal 4. This is a breach of the Working Time Regulations To try and compel her to work in excess is not lawful. She may object and if dismissed as a result, it is automatically unfair dismissal. If she agrees, they are asking her to sign an opt out agreement. 5. Two clauses would be a restrictive covenant to prevent an employee like Ella working for a competitor within a particular geographical area or time limit if she leaves. A dedication to enterprise clause would mean she had to obtain their permission before doing a second job. Scenario 3 Questions 1. Barry should not start working in competition with his employer by running a stall at the speciality food market. Any recipes he has produced as part of his role at the delicatessen are likely to be the intellectual property of his employer so should not be used elsewhere. Working in competition is a breach of the duty of good faith/fidelity and is a fundamental term of the employee/er relationship. He could be dismissed for gross misconduct for doing so. He is very likely to be discovered as he is working in the same area albeit at the market. 2. Mike could dismiss Barry for gross misconduct as it is a breach of a fundamental term of employer/employee relationship. Potentially fair reason is conduct. He could impose a lesser sanction such as a written warning to stop Barry doing it again. Alternatively if he can prove he has lost money he can sue Barry for loss of profits and if he refuses to stop, he could apply for an injunction to stop him running the stall. 3. Fidel is an employee with over two year s continuity of employment who has been dismissed. He is not in an excluded category and needs to bring his claim within 3 months of his date of dismissal. He satisfies the criteria. 4. (a) Mike has a potentially fair reason to dismiss Fidel. Theft is gross misconduct. Fidel was found in possession of the caviar. However Mike did not listen to any explanation and dismissed Fidel immediately. This is a breach of ACAS code of practice but does not render the dismissal unfair. However Mike should comply with BHS v Burchell (1978), he needs a genuine belief in his guilt based on reasonable grounds following an investigation. He satisfies all of this except the investigation, but he did find the caviar in Fidel s bag so may be able to argue the Polkey v A E Drayton Services Ltd (1987) point that any investigation would have been utterly futile as he had sufficient evidence. Even though Fidel is innocent, he does not have a successful claim of unfair dismissal. 4. (b) Reinstatement, re-engagement and compensation. 5. Sharon s comments would be discrimination against Charlotte based on her perceived sexuality. Sexual orientation is a protected characteristic under s4 of the Equality Act Charlotte is being harassed on the basis Page 4 of 5

5 of her perceived sexuality. It does not matter that she is not gay, she is still protected. Charlotte s working environment is intimidating and hostile as a result of Sharon s actions. She has a potential claim. Page 5 of 5