effects of legal controls over employment issues on employers and employees

2.1 Employment Contracts and Legal Controls

What is an Employment Contract?

An employment contract is a legally binding agreement between an employer and an employee that sets out the terms and conditions of work. It may be written, oral or implied, but a written contract is preferred because it provides clear evidence of the parties’ rights and obligations.

Key Elements of an Employment Contract

• Job title and description
• Pay and benefits (including overtime, bonuses and statutory pay)
• Hours of work and scheduling
• Holiday entitlement and rest breaks
• Notice period for termination
• Confidentiality, non‑compete and intellectual‑property clauses
• Health and safety obligations
• Grievance and disciplinary procedures
• Data‑protection clause (privacy notice and employee consent)

Legal Controls that Influence Employment Contracts (2.3.4)

UK legislation sets minimum standards that must be reflected in every contract. The most relevant statutes are:

1. Employment Rights Act 1996 – written terms, protection from unfair dismissal, redundancy pay, statutory notice.
2. National Minimum Wage Act 1998 – minimum hourly rates for different age groups.
3. Working Time Regulations 1998 – maximum 48 h average weekly working time, 5.6 weeks paid annual leave, rest breaks.
4. Health and Safety at Work Act 1974 – employer duties to provide a safe workplace.
5. Equality Act 2010 – prohibits discrimination on nine protected characteristics.
6. Trade Union and Labour Relations (Consolidation) Act 1992 – rights to join trade unions, collective bargaining and the use of collective agreements.
7. Data Protection Act 2018 (GDPR) – requires a privacy notice in the contract, lawful basis for processing employee data and employee consent where necessary.

Trade‑Union Influence on Employment Contracts

When a recognised trade union represents employees, the employer may be bound by a collective agreement negotiated between the union and management. This agreement can set pay rates, working‑time arrangements, grievance procedures and training provisions that are more favourable than the statutory minimum. Even where no collective agreement exists, employees have the legal right to join a union and be represented in discussions about contract terms.

Data‑Protection Requirements in Contracts

• Include a clear privacy notice explaining what personal data will be collected, why, who it will be shared with and how long it will be retained.
• Obtain explicit employee consent for any processing that is not strictly necessary for the contract (e.g., use of CCTV footage for security).
• Specify employee rights to access, correct or erase their data.

Definition Box

Equality Act – Two Illustrative Cases

• Case A – Age discrimination: A 55‑year‑old employee is passed over for promotion in favour of a younger colleague with similar qualifications. Under the Equality Act, the employer must show a legitimate reason unrelated to age; otherwise the employee can claim unlawful discrimination.
• Case B – Gender pay gap: A female employee discovers that male colleagues in the same role receive a higher basic salary. The Equality Act requires equal pay for equal work; the employer must conduct a pay audit and correct any unjustified differences.

Health & Safety – Employer Checklist

• Carry out a written risk assessment for each work area.
• Provide appropriate safety equipment and training.
• Display safety signs and emergency procedures.
• Maintain equipment and ensure regular inspections.
• Appoint a competent person (e.g., Health & Safety Officer).
• Record and investigate all accidents and near‑misses.
• Consult employees or their representatives on safety matters.

Effects of Legal Controls on Employers

• Higher compliance and administrative costs (Employment Rights Act 1996, Working Time Regulations, National Minimum Wage Act).
• Reduced risk of costly legal disputes (Equality Act 2010, Employment Rights Act 1996).
• Limits on scheduling flexibility – maximum weekly hours and mandatory breaks (Working Time Regulations).
• Need to invest in health‑and‑safety measures (Health and Safety at Work Act 1974).
• Obligation to pay minimum wage and overtime (National Minimum Wage Act 1998).
• Requirement to avoid discriminatory practices (Equality Act 2010).
• Potential impact of collective bargaining – may increase wage bills or improve working conditions (Trade Union and Labour Relations Act 1992).
• Data‑protection compliance costs – privacy notices, staff training, secure storage (Data Protection Act 2018).

Effects of Legal Controls on Employees

• Job security – protection from unfair dismissal and entitlement to redundancy pay (Employment Rights Act 1996).
• Fair pay – guarantee of at least the national minimum wage and overtime rates (National Minimum Wage Act 1998).
• Work‑life balance – limits on weekly hours, paid holidays and rest breaks (Working Time Regulations).
• Health & safety – right to a safe working environment and proper equipment (Health and Safety at Work Act 1974).
• Equality and non‑discrimination – protection from unfair treatment on protected grounds (Equality Act 2010).
• Access to information – written terms must be provided, enabling employees to understand their rights (Employment Rights Act 1996).
• Union representation – right to join a trade union and be represented in negotiations (Trade Union and Labour Relations Act 1992).
• Data‑privacy rights – control over how personal data is used and stored (Data Protection Act 2018).

Summary Table – Comparative Effects

2.2 Organisation and Management

Organisational Structure

• Hierarchical (tall) – many levels of management; clear lines of authority.
• Flat (horizontal) – few management levels; promotes quicker decision‑making.
• Functional – departments based on specialist activities (e.g., finance, marketing).
• Divisional – semi‑autonomous units based on product, geography or market.

Management Functions (AO1‑AO4)

1. Planning – setting objectives, forecasting, budgeting.
2. Organising – allocating resources, establishing structures.
3. Leading – motivating staff, communicating vision, decision‑making.
4. Controlling – monitoring performance, taking corrective action.

Leadership Styles (AO2‑AO4)

Task (AO3‑AO4): Choose a real‑world business, identify its dominant leadership style and evaluate whether a different style could improve employee motivation or productivity.

Trade‑Union Influence on Management

Trade unions give employees a collective voice in the workplace. Their influence can be seen in:

• Negotiating collective agreements that set pay scales, working‑time arrangements and grievance procedures.
• Representing staff on health‑and‑safety committees.
• Providing training on employee rights and dispute resolution.

Evaluation prompt (AO4): Discuss the advantages and disadvantages for an employer of having a recognised trade union in the organisation.

2.3 Recruitment, Selection and Training

Recruitment (2.3.1) – Attracting Suitable Candidates

• Internal recruitment: promotions, transfers, employee referrals.
• External recruitment: advertisements (online, newspapers), recruitment agencies, job fairs, university placements.

Pros and Cons of Recruitment Methods

Selection (2.3.2) – Choosing the Best Candidate

1. Application form / CV screening
2. Short‑listing
3. Testing (aptitude, personality, technical)
4. Interview (structured, panel, competency‑based)
5. Reference checks
6. Job offer and contract

Pros and Cons of Selection Stages

Training (2.3.3) – Developing Skills and Knowledge

• Induction – introduction to the organisation, policies and culture (usually first few days).
• On‑the‑job training – learning while performing the role (e.g., coaching, job‑shadowing).
• Off‑the‑job training – external courses, workshops, e‑learning, seminars.

Benefits and Limitations of Training

Analysis task (AO3): Using the table above, explain how a company might decide whether to use on‑the‑job or off‑the‑job training for a new software rollout.

2.4 Internal and External Communication

Why Communication Matters

• Ensures employees understand policies, targets and changes.
• Facilitates coordination between departments.
• Supports motivation and employee engagement.

Common Communication Channels

Typical Barriers to Effective Communication

• Language or cultural differences
• Hierarchical barriers – information may be filtered or delayed.
• Technological issues – poor internet, incompatible software.
• Physical distance – remote or multi‑site workplaces.
• Personal attitudes – lack of motivation or trust.

Improving Communication (AO2‑AO4)

• Use clear, simple language and avoid jargon.
• Provide training on communication tools and etiquette.
• Encourage two‑way feedback (surveys, suggestion boxes, regular Q&A sessions).
• Standardise formats for policies and procedures to reduce misunderstanding.

Evaluation prompt (AO4): Assess the advantages and disadvantages of using a company‑wide instant‑messaging app for daily operational communication.