CONTRACT LAW SOLICITORS

Updated: Aug 17


What type of work do contract law solicitors or contract lawyers do? Most of us think that contact law is a practice area in its own right, but it is not. Contract law is a fundamental set of laws that apply to many different disputes like contract disputes and practice areas. For example, as a Contract Law Solicitor, you will never be asked to advise on Contract Law; rather, you will use the principles in a commercial dispute when reviewing commercial contracts or contract disputes. Another area where Contract Law principles are frequently used in employment law. Below are the types of questions that arise in Employment Law, and then provide the type of employment advice you need to give to clients in employment or contract disputes.




Commercial Contracts


Commercial contracts or commercial agreements govern business relationships between people or businesses and specify the actions each party will take or refrain from performing. Commercial agreements are typically verbal, but they can also be written agreements.


What is considered a breach of contract?


A breach of contract occurs when a party does not comply with the terms of a legally binding agreement or legally binding contract.


EMPLOYMENT LAW QUESTION


Colin Tate is a member of the administrative team and has worked at the Newcastle care home for over six years. Colin has recently been subject to an investigation (Conducted by Alan Macgregor) as it is alleged he has made damaging comments about the level of support at the care home on his Facebook account. On examination, Kamaljit discovers Colin’s comments to be highly damaging to the reputation of the Care home.


The comments stated, “How do employers get away with it, another challenging day at work! Had enough now can’t bear to see residents treated this way. Call themselves a “Care Home” - joke???”


Colin has protested against his invitation to a formal disciplinary meeting and claims his comments were made in his private time and are not his employer’s business. Furthermore, there is no policy or internal rules that indicate restrictions on this matter. He has always been an exemplary employee and considers that he is being treated unfairly. The hearing is heard by both Alan and Kamaljit, and Colin is advised of the decision to dismiss him. It is strongly believed that his comments on social media have led to enquiries and concerns from family members whose relatives are residents at the care home.


Ann has received a letter of appeal from Colin against the decision to dismiss him. In preparation for the appeal hearing, Ann has asked for a copy of all the notes and documents that were used when deciding on dismissal. Unfortunately, they were no notes from the meeting, and Ann is beginning to worry. Once Ann has had an opportunity to reflect, she decides to begin a discussion about a settlement agreement and seeks clarity from her private lawyer about the practical steps involved in devising a settlement agreement.


EMPLOYMENT LAW ADVICE


INTRODUCTION


First, this advice will discuss what legal risks have emerged at the Newcastle office and the best course of action to take with respect to each of the three issues. Second, this advice will advise Ann Handy of the practical steps that need to be taken to ensure equality and performance are implemented and managed effectively at “care for all” Ltd. Third, this advice will explain the relevant legal consequences relating to employment matters that would need to be considered if “Care for all” Ltd is sold to Ann’s friend.


Commercial Contract Solicitors


Lawyers specialising in business and commercial law are known as commercial contract lawyers. Contract solicitors help with transactions, paperwork, and documentation but may also support other business concerns that call for court motions, actions, or other legal issues.


COLIN TATE’S DISMISSAL


There is a risk that Colin Tate (“CT”) could bring a claim of unfair dismissal because he has six years of service and, therefore, sufficient service time to bring a claim for unfair dismissal.[1]Alan McGregor (“AM”) made a decision to dismiss CT for gross misconduct, which is a potentially fair reason “some other substantial reason” (“SOSR”) to justify the dismissal. CT has claimed his conduct fell outside of work and is irrelevant to employment and his performance since Facebook posts were made in his private time and of no concern to his employer. Further, CT protests there is no policy in place that governs the use of social media, and that forbids comments about the employer. Normally, an employer cannot take action against an employee for what they do in their private time. However, an employer can consider misconduct outside work if that influences the employment relationship and damages the employer’s reputation. In British Waterways Board v Smith,[2] the ET held the dismissal to be fair, even though there were no policy or internal rules that governed social media use. In Weeks v Everything Everywhere Ltd[3], an employee repeatedly referred to his workplace as “Dante's Inferno” on Facebook. The Tribunal found that the Facebook comments were likely to cause damage to the employer's reputation and the dismissal issued by the employer to be fair.

“Care for all” Ltd needs to show that in the circumstances, AM acted reasonably in treating the potentially fair reason to dismiss as a sufficient reason for dismissal[4] and that his response was within “the band of reasonable responses open to the employer”. This test is subjective. In Foley v Post Office and Midland Bank plc v Madden,[5] the Court of Appeal re-established this teat and to decide whether the decision to dismiss was within “the band of reasonable responses open to the employer” and held it applies to the procedural process followed as well as the decision to dismiss.


A failure to follow the employer's own procedure may result in a finding that the dismissal was unfair. We are not told if the company have a disciplinary policy or whether it has been followed. If there is no policy, Ann should consider implementing one, and she should follow the ACAS Code of Practice as a minimum best practice.[6] This is discussed below. A failure to comply with the Acas guidelines would not automatically mean that a dismissal was not fair but will be taken into account in any potential ruling by the Tribunal and the employee could be awarded up to a 25% uplift in compensation. It is unclear if the ACAS Code of Practice has been observed, which includes carrying out the necessary investigations to establish the facts of the case, sending a written invitation to a disciplinary meeting, which outlines the alleged misconduct, and making all evidence available to the employee,[7] and informing the employee of their right to be accompanied.[8] The investigation, as well as the hearing, were both conducted by AM, the Newcastle Senior Manager. Paragraph 6 of the ACAS Code states different people should carry out the investigation and disciplinary. This in itself will not prevent dismissal from being fair, but the guidelines should be recognised and adhered to so that the process is independent and appears to be fair. Paragraph 9 of the Acas Code states an employee should be notified of any disciplinary in writing and be provided copies of evidence. We have not been told whether this has been done with CT. If it has not, it could lead to a finding by the ET that the dismissal was procedurally unfair.


CT’s appeal should be dealt with impartially by Ann, who has not previously been involved in the case.[9] Ann should follow ACAS as best practice.[10] She can now also take advantage of the appeal process to rectify the mistakes of no documentation being produced at the investigation and disciplinary stage and ensure that the dismissal is both substantively as well as procedurally fair. She should invite CT to a formal appeal meeting, to which he can again be accompanied by a fellow employee or Trade Union Representative.[11] During the meeting, notes should be taken and evidence of their findings presented by AM to rectify the issue that no notes were taken in the disciplinary hearing.[12] Ann needs to base her final decision on the band of reasonable responses, taking into consideration all mitigating circumstances and CT’s previous performance and long and clean work history. CT should be informed in writing of the results of the appeal hearing.[13]


Reaching a settlement with CT could be a good idea to avoid litigation. Ann could engage CT in a ‘protected conversation’ or a ‘without prejudice conversation. This discussion would be covered by section 111A Employment Rights Act (“ERA”) 1996. This means that the offer Ann can make and any subsequent discussion about it may not be admissible as evidence in any subsequent unfair dismissal claim.[14] A reasonable offer would be CT’s notice period along with redundancy calculation payment for loss of employment.


JULIE TATE


There is a risk that Julie Tate (JT) could bring a claim for indirect discrimination because she has been asked to remove her cross necklace while doing caring work. She is challenging the company’s decision and claims that the necklace is a part of her practising her faith and religion. In Eweida v United Kingdom,[15] the ECtHR upheld the wearing of a crucifix at work was Ms Eweida’s freedom of expression of her religion. The rule of not wearing jewellery is of general application and will constitute a provision, criterion or practice.[16] The rule of no jewellery is likely to be a valid (non-discriminatory) reason because it is to ensure health and safety and is likely be “a proportionate means of achieving a legitimate aim”.[17]


The dress code of the company is in place to ensure health and safety standards for employees and the people that are being cared for. It asks employees to remove all jewellery while doing caring work and does not discriminate between religious symbols and non-religious jewellery. While doing care work, there is a danger of the jewellery getting entangled; there is lifting and other activities involved that poses a danger to patients. In Chaplin v Royal Devon & Exeter NHS Foundation Trust,[18] a tribunal held that a clinical nurse who was of Christian faith did not suffer indirect discrimination when the Trusts policy did not allow her to wear a crucifix on a necklace at work. The Tribunal held the uniform policy did not have the effect of placing persons of Mrs Chaplin's religion at a disadvantage. Further, they held that the policy was objectively justified. The policy’s aim was a legitimate aim in that it tried to protect the health and safety of patients. The employer did attempt to undertake a reasonable dialogue with Mrs Chaplin and tried to resolve this issue without success. It would be advisable to have an informal discussion with JT about the health and safety reasons for the dress code and, should she not comply, start disciplinary proceedings.


DISMISSAL OF ALI KHAN


Ali Khan (“AK”) has less than two years of service, so he cannot bring a claim for unfair dismissal.[19] However, AK could possibly bring a claim for automatic unfair dismissal by virtue of s.100 ERA 1996 if the principal reason for the dismissal was on the grounds that he brought to his employer’s attention circumstances which he reasonably believed were harmful or potentially harmful to health or safety of residents.[20] AK has expressed concerns with the maintenance of some of the electrics within the care home since he believed that they did not reflect the required standards and presented a health risk and raised these concerns with his manager James Magpie.


Furthermore, non-compliance with Health and Safety laws could be a criminal offence or a failure to comply with a legal obligation, and AK could also claim that he made a protected disclosure in the public interest under s.47(B) ERA 1996, which protects AK from being dismissed by the Respondent on the ground of a protected disclosure. This will then be an automatic unfair dismissal based on his disclosure of the unsafe conditions. AK will not need two years of continuous service to qualify him for unfair dismissal protection. AK could then apply for interim relief[21] within seven days of making a claim to a Tribunal,[22] who may rule that AK is reinstated in the employment relationship on no less favourable terms as previous until the final hearing.[23] In Taplin v Shippam Ltd,[24] it was alleged by the employee that he was dismissed for taking part in trade union activities. The statutory test for the granting of interim relief was a forerunner to, and in comparable terms to, that in s.129(1) ERA 1996.

The employer should never give out a bad reference. There is no obligation to give a qualified reference describing the employee's conduct or performance at work that goes further than giving basic dates and a role title. If a bad reference is provided, AK could bring a claim under s.44 and 47B ERA 1996 for acts and omissions which amount to a detriment. The best course of action will be to provide a basic reference outlining the dates he was employed only in order to avoid a detriment to him in his capacity as an employee.[25]


EQUALITY POLICY


The advice to Ann is an Equality Policy should be implemented at Care for all Ltd. This is a document that sets the rules in place to ensure equality in the way the business operates. A successful equal opportunities policy should discourage discriminatory behaviours and attitudes and make employees feel confident about equality in the workplace. The policy should instil the minimum standards expected from an employer who wants to avoid and prevent discrimination. The acceptable standards are governed by the Equality Act 2010, which prohibits discrimination, harassment and victimisation in employment.


Having an equal opportunities policy is not required by law. However, having a policy is recommended in the EHRC Employment Statutory Code of Practice (“EHRC Code”).[26] Guidance is provided in chapter 18 of the EHRC Code on what should be contained in an equal opportunities policy and how it should be prepared. The EHRC Code does not in itself create any legal obligations on the employer but it is taken into account by a Tribunal when deciding if discrimination has taken place when a claim is brought by an employee. Where there has been a breach of the EHRC Code, when relevant, it can have the effect of shifting the burden of proof to the employer in a discrimination claim to provide an adequate explanation for any unfavourable treatment which is alleged to be discriminatory.

Implementing an equal opportunities policy can help to set minimum standards of behaviour and in turn reduce the risk of litigation by employees.[27] One example is that AM’s appointment was made as a favour to a long-standing friend, and such practices could be seen as nepotism which could give rise to an indirect discrimination claim. Provided that a policy is implemented with publicity and proper training, and the correct action is taken in the event of a breach, it helps an employer in raising the “reasonable steps” defence under s.109(4) Equality Act 2010. This means if an employer can show they took “all reasonable steps” to prevent unlawful acts, the employee can avoid liability for the discriminatory act of other employees.




PERFORMANCE POLICY


To ensure dealing with any performance-related issues in a fair and transparent manner and in line with the ACAS guidelines, the employer should implement a performance management procedure policy or disciplinary and capability procedure to set out a formal way of dealing with an employee’s behaviour (misconduct) and/or performance (capability). The policy can deal with both conduct and performance or handle performance in a separate procedure. The policy should outline the process and all steps were taken by a company if an employee’s performance does not meet the required standards. These steps should be in line with the ACAS guidance as a minimum, and the steps outlined in the policy should be followed rigorously.


Employers have a duty to give employees a written statement of the main terms and conditions of employment.[28] The written statement must contain disciplinary rules and the procedures for disciplinary decisions and appeals or refer the employee to some other easily accessible document, such as a staff handbook containing that information. These procedures are what will be used in dealing with performance-related issues such as with Kamaljit Bains. Employees have the right not to be unfairly dismissed.[29] In most cases, this is subject to having achieved the necessary qualifying period of employment.

The Acas Code is a statutory code containing recommendations for the handling of disciplinary situations at work. It is accompanied by a non-statutory guide, Discipline and grievances at work (Acas non-statutory guide), which gives further information on best practices for handling discipline but is not part of the Acas Code. Failure to follow the Acas Code does not in itself give rise to a breach of an employee’s legal rights, but it must be taken into account by a Tribunal where relevant, for example, in deciding whether a dismissal is unfair.[30] An unreasonable failure by either party to follow the Acas Code may also lead a tribunal in some cases (not restricted to unfair dismissal) to adjust the amount of compensation payable to the employee.[31] It is therefore advisable for an employer to put in place a disciplinary procedure that complies with the provisions of the ACAS Code. For example, employees (and other workers) have a right to be accompanied by a trade union representative or a fellow worker.[32]

The Acas Code recommends that employers involve employees and, where appropriate, their representatives in developing procedures. In some workplaces, a trade union works for council or other representative body may, depending on its remit, have a say in formulating the procedure and rules. The Acas non-statutory guide, Discipline and grievances at work, says that employers should “always bear in mind principles of fairness” when drawing up a procedure.


SALE OF “CARE FOR ALL” LTD


When selling the company to Ann’s school friend, the principles of Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (“TUPE”) apply, and all employees should automatically transfer to the new employer, retaining their rights under their current terms and conditions of employment. TUPE is designed to protect core employment rights when a business is sold or transferred to another business when a service contract transfers from one employer to another.


AUTOMATIC TRANSFER PRINCIPLE


The contracts of employment of those employees employed by the transferor automatically transfer to the transferee on their existing terms.[33] Transferred employees have the right to have their continuity of service recognised. This principle applies to all employees who were employed in the grouping immediately before the transfer or who would have been so employed if they had not been dismissed by reason of the transfer unless that reason was an economic, technical or organisational reason.[34] The transferee effectively steps into the transferor’s shoes with regard to the transferring employees. All of the transferor’s rights, powers, duties and liabilities under or in connection with the transferring employees’ contracts pass to the transferee and any acts or omissions of the transferor before the transfer are treated as having been done by the transferee.[35] Employees who object to the transfer do not become employees of the transferee. Instead, their contracts of employment terminate by operation of law on the transfer date. There is no dismissal.[36]


Solicitors Regulation Authority


Solicitors Regulation Authority (SRA) has its professional conduct rules apply to more than 125,000 solicitors and other authorised professionals working for more than 11,000 firms and those employed internally by private and public sector companies.


CONSULTATION


Both the transferor and the transferee must inform and (if appropriate) consult with recognised trade unions or elected employee representatives (if there is no recognised union) in relation to any of their own employees who may be affected by the transfer or any measures taken in connection with it. Certain information must be provided to the representatives long enough before the transfer to enable the transferor to consult with them about it. Although there will be a duty to inform on every TUPE transfer, the duty to consult only arises where an employer envisages taking measures in respect of affected employees.[37]A failure to comply with these obligations exposes the parties to compensation equivalent to up to 13 weeks uncapped pay. The transferor and transferee may, in certain circumstances, be held to be jointly and severally liable for this compensation.[38]


CHANGING OF TERMS


The content of contracts of employment transfer with the employees and any changes to the contracts cannot be enforced as a result of a TUPE transfer. The transferee will take on the transferring employees on their existing terms of employment. If any changes to the terms of employment have been made and if the sole or principal reason is the TUPE transfer itself, then the effect of those changes will be void, unless: i) the reason for the change is for an economical, technical or organisational reason where changes are needed; or ii) if the terms of the contract allow and permit the employer to make changes to the terms of employment.[39]


PROTECTION FROM DISMISSAL


TUPE provides protection against dismissal without the need of having two years’ service, which is needed for general unfair dismissal. If the sole or principal reason for the dismissal is the TUPE transfer itself, then the dismissal will be automatically unfair. If the employer can argue the dismissal was for an economical, technical or organisational reason and changes were needed, then this is potentially unfair, and the general unfair dismissal rules will apply.[40] If an employee resigns because of a repudiatory breach of contract or change in working conditions, then the circumstances which are detrimental to the employee have deemed a dismissal to which the TUPE enhanced protection applies.[41]


BIBLIOGRAPHY


Acas Code of Practice on disciplinary and grievance procedures Published 11 March 2015 (https://www.acas.org.uk/acas-code-of-practice-for-disciplinary-and-grievance-procedures/html accessed on 08/02/2021 accessed on 08/02/2021)


Acas Guidance on Settlement Agreements December 2018 (https://archive.acas.org.uk/media/3736/Settlement-Agreements-A-guide/pdf/Settlement_agreements_Dec_18.pdf accessed on 08/02/2021)


EHRC Employment Statutory Code of Practice (http://www.equalityhumanrights.com/publication/employment-statutory-code-practice accessed on 08/02/2021)


Practical Law in the Practice Note“Equal opportunities policy (short form), Practical Law UK Standard Document” (Resource ID 8-512-7274) (https://uk.practicallaw.thomsonreuters.com accessed on 08/02/2021)


Practical Law in the Practice Note“Social media, email and internet misuse: case summaries” (https://uk.practicallaw.thomsonreuters.com accessed on 08/02/2021).


Practical Law in the Practice Note“TUPE: overview, Practical Law UK Practice Note Overview” (Resource ID 8-202-1704) (https://uk.practicallaw.thomsonreuters.com accessed on 08/02/2021)


Practical Law in the Practice Note“Whistleblower protection, Practical Law UK Practice Note” (Resource ID 8-200-3903) (https://uk.practicallaw.thomsonreuters.com accessed on 08/02/2021)


Practical Law UK Standard Document “Equal opportunities policy (short form) (Resource ID 8-512-7274) (https://uk.practicallaw.thomsonreuters.com accessed on 08/02/2021)


Practical Law UK Standard Document “Staff handbook (short form) (Resource ID 1-554-1511) (https://uk.practicallaw.thomsonreuters.com accessed on 08/02/2021)


TABLE OF CASES


British Waterways Board v Smith UKEAT/0004/15

Chaplin v Royal Devon & Exeter NHS Foundation Trust ET/1702886/09

Eweida v United Kingdom [2013] ECHR 37

Foley v Post Office and Midland Bank plc v Madden [2000] IRLR 288

Taplin v Shippam Ltd [1978] IRLR 450

Tiplady v City of Bradford Metropolitan District Council [2019] EWCA Civ 2180

Ward v Marston's Plc ET/2600869/13

Weeks v Everything Everywhere Ltd ET/2503016/12


TABLE OF STATUTES


Trade Union and Labour Relations (Consolidation) Act 1992

Employment Rights Act 1996

Employment Relations Act 1999

Equality Act 2010


FOOTNOTES

[1] s.86(1) of the Employment Rights Act (“ERA”) 1996 [2] UKEAT/0004/15 [3] ET/2503016/12 [4] s 98(4) (ERA 1996) [5] [2000] IRLR 288 [6] Acas Code of Practice on disciplinary and grievance procedures Published 11 March 2015 at https://www.acas.org.uk/acas-code-of-practice-for-disciplinary-and-grievance-procedures/html accessed on 08/02/2021 [7] Paragraph 9 Acas Code of Practice [8] Paragraph 13 Acas Code of Practice [9] Paragraph 6 Acas Code of Practice [10] Paragraph 27 Acas Code of Practice [11] Paragraph 28 Acas Code of Practice [12] Paragraph 9 Acas Code of Practice [13] Paragraph 29 Acas Code of Practice [14] ACAS Guidance on Settlement Agreements December 2018 at https://archive.acas.org.uk/media/3736/Settlement-Agreements-A-guide/pdf/Settlement_agreements_Dec_18.pdf accessed on 08/02/2021 [15] [2013] ECHR 37 [16]S.19(1) Equality Act 2010 [17] s.19(2)(d) Equality Act 2010 [18] ET/1702886/09 [19] s.86(1) ERA 1996 [20]s.100(1)(c) ERA 1996 [21] s.128 ERA 1996 [22] s.128(2) ERA 1996 [23] s.129(3)(b) ERA 1996 [24] [1978] IRLR 450 [25] Tiplady v City of Bradford Metropolitan District Council [2019] EWCA Civ 2180 [26] EHRC Employment Statutory Code of Practice (EHRC Code) (paragraph 18.1) [27] Paragraph 18.3, EHRC Code [28] sections 1-7B, ERA 1996 [29] s.94, ERA 1996 [30] s.207 Trade Union and Labour Relations (Consolidation) Act (“TULRCA”) 1992 [31] s.207A, TULRCA [32] s.10 Employment Relations Act 1999 [33] Regulation 4(1), TUPE [34] Regulation 4(3), TUPE [35] Regulation 4(2), TUPE [36] Regulation 4(7), TUPE [37] Regulation 13, TUPE [38] Regulation 15, TUPE [39] Practical Law in the Practice Note “TUPE: overview, Practical Law UK Practice Note Overview” (Resource ID 8-202-1704) (https://uk.practicallaw.thomsonreuters.com accessed on 08/02/2021) [40] Regulation 7(1), TUPE [41] Regulation 4(9) and 4(11), TUPE

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