In order to advise Barry as to the legal issues that he faces and what steps he should consider to safeguard the company I will need to evaluate several factors. Firstly I will need to establish the issues that have taken place within the company in relation to the changes that Barry has chosen to implement, as well as all the issues concerning Albert and Denise. The rules of employment Law and relevant case laws would also need to be assessed.
I will finally then apply the relevant law and policies to all the issues that Barry and Zephyr Autos are facing. Issues The first issue it that due to the fact that Zephyr Autos has suffered a loss in business with the recent economic downturn, Barry the new managing director is determined too make some financial savings. Barry attempted to negotiate changes affecting the work force with the Union of Car Workers (UCW), including a pay cut, but negotiations broken down without agreement.
Under pressure from Head Office, Barry decided to introduce the changes despite not actually coming to an agreement with UCW. So the issue would be if Barry was out of his depth by introducing the changes without coming to an agreement with UCW, and if the employees and UCW can take some form of action against Barry and Zephyr Autos. The second issue would be in relation to Albert who has been working for Zephyr Autos for ten years as a sales representative.
When Albert applied for the job, he signed a written statement of particulars which stated that the terms of his contract were to be governed by collective agreements, Albert signed the statement but also stating that he was not a union member. Zephyr Autos has a job security agreement with UCW which states that discretionary bonuses are payable for good performance. Albert was informed by Barry that his bonus had been discontinued as he has not met his sales targets in the last six months.
So the issue here would be if Albert would have a right against Barry's decision on discontinuing his bonus and if Barry could possibly be facing legal issues in regards to his actions. Zephyr Autos have a job security agreement with UCW containing a seniority agreement which stipulates that "selection for redundancy will be made on the basis of seniority with the company on the basis of last in, first out". The third issue is that, after Albert had objected the decision his discontinued bonus he was later informed that he had been selected for redundancy.
With regards to this issue Barry would need to consider if Albert would have a right of unfair dismissal against Barry and Zephyr Autos, and if there could be anything that Barry could do to safeguard the company and prevent possible liability. The final issue is the fact that Denise was dismissed for gross misconduct after Barry suspected that she has been misusing company funds by concocting false invoices.
Barry also suspects that Denise is using the knowledge she has acquired from Zephyr Autos in order to set up a rival company. Denise was dismissed after a brief investigation was conducted, but it was inconclusive. In order to have prevented the company from being sued for unfair dismissal Barry should have taken correct investigation procedures. If Barry does have sufficient evidence then he can bring an action against Denise. Also the issue here would be if Denise can bring an action against Zephyr Auto. Rule
In terms of the rules that apply to the first issue which is where, Barry decided to introduce the changes even though not actually coming to an agreement with UCW, Barry could be in breach of a statutory requirement. Any negotiated agreements must satisfy certain statutory requirements, namely that it first, sets out the circumstances in which the employer must inform and consult the employees, secondly, it must be in writing and dated, thirdly the employer must sign it, and finally it must provide for the appointment or election of 'information and consultation representatives'1.
Nevertheless, the most important requirement is that the negotiated agreement must be approved by the workforce. This means that it must be signed by all the negotiating representatives or signed by a majority of the negotiating representatives and either approved in writing by at least 50% of the employees2. Nevertheless, the employees at Zephyr Auto can also bring an action against the company in a, 'a Wages Act Claim' to a tribunal to recover their deducted wages.
Section 133 provides that an employer shall not make deductions from wages of a worker employed by him unless the deduction is, required or authorised by statute, required or authorised by a provision in the contract of employment which has either been given to him or notified to him previously in writing, or the employee has agreed to it in writing prior to the making of the deduction.
The requirement of prior written agreement means prior to the event causing the deduction, not just to the deduction itself, authoritative cases in relation to this situation would be Discount Tabacco and Confectionary Ltd v Williamson4 and York City and District Travel Ltd v Smith5.