“When the Courts apply the rules of statutory interpretation, they often end up making the law, not just explaining it”
By referring to relevant case law, discuss what this statement means and evaluate how accurate it is in relation to the Courts in England and Wales.
Maximum 50 marks
You have recently been appointed as the Head of Human Resources for Mega Kitchens Ltd., a company which manufactures and sells kitchen units and appliances from its operations site in Camford. The company employs a total of 250 staff on its premises in Camford, where the manufacturing, sales and marketing, and administration functions of the company’s business are carried out. Distribution of the company’s products is carried out through direct sales to the public and the trade from the company’s Camford premises, and through delivery of goods to customers’ addresses throughout the UK by ‘Fitters’. The ‘Fitters’ are a group of individuals, who are engaged by Mega Kitchens Ltd to collect, deliver and fit new kitchen units and appliances at customers’ premises. The ‘Fitters’ are not regarded by Mega Kitchens Ltd. as part of the permanent workforce and work for the company under a ‘Contract of Engagement’.
Your appointment is to replace the previous ‘office manager’, George Hughes, who recently retired. When you arrived in your new job you discovered that there were few up to date policies and procedures for the management of human resources, and many decisions have been made by line managers with no clear guidance from George Hughes. There appears to have been no formal training on handling difficult HR issues for line management. There is a formal disciplinary procedure and a formal grievance procedure in place, both of which appear to have been copied from an out-dated Government website without modification. There is also a ‘Staff Handbook’, which is given to all new employees when they start work at Mega Kitchens Ltd., but which also appears to be quite flimsy and out of date. Extracts from the Disciplinary and Grievance procedures, the Staff Handbook, and the ‘Contracts of Engagement’ which the company has with its Fitters, are all reproduced at the end of this case scenario.
James Easey, aged 35, works as a ‘Fitter’ for Mega Kitchens Ltd., a position he has held for the last 5 years under a standard ‘Contract of Engagement’. Although under his contract James is allowed to take on work outside his normal duties and work either for himself or another employer, in reality he has never done this all the time he has been contracted to Mega Kitchens Ltd. Similarly, even though this too is permitted under the contract, James has never substituted another fitter to do his work, but he has occasionally swapped jobs with other fitters. James has always provided at least 40 hours of his time every week exclusively to Mega Kitchens Ltd., and often many more hours than that. At the end of each week, James submits a ‘time sheet and claim for payment’ form to Mega Kitchens Ltd., which then prepares a formal ‘invoice’ from James for the money owed. Mega Kitchens Ltd. does not pay the invoice unless and until the customer pays for the work carried out by James. Over the past year, James’ average weekly payment received from Mega Kitchens Ltd. has been £600/week, which is paid without Income Tax or National Insurance Contributions deducted.
James always had a good working relationship with Mega Kitchens Ltd. and had very few problems at work. You notice from James’ personal file that there are only two matters recorded against him. One was three years ago when a member of the public complained about James’ driving of one of the company’s vehicles, alleging that James had ‘cut him up’ at a roundabout. James denied this and the matter was dealt with by the Operations Manager, Javid Hussain, advising James to ‘take it easy and be more careful’ when driving company vehicles. The other matter was a year later when a female customer complained that James had been ‘flirty and suggestive’ with her whilst fitting her new kitchen. James maintained that all conversations between him and the customer were completely professional, but accepted that some of his comments may have been misconstrued as being ‘a bit flirty’. On this occasion, James was given an informal verbal warning about his future conversations with customers.
Last month, however, Mega Kitchens Ltd. received a complaint from a customer, Mrs Hubbard, who said that James had sent her a series of inappropriate and highly suggestive WhatsApp messages and voice calls from his personal phone to her mobile. Mrs Hubbard claimed that there must have been ‘at least 40 or 50’ such messages and that many messages were sent outside working hours, including in the evenings and at weekends. Mrs Hubbard said that the messages included invitations to go for a drink with James and enquiries about whether she wanted ‘some company’ when she had told James that she was in bed. However, Mrs Hubbard said that she had deleted all the messages some time ago because she was scared that her husband may see them. On receiving this complaint, Javid Hussain called James into his office and confronted him with the allegation with the words ‘you have really done it this time – you have gone too far – I thought you would have learned your lesson from last time. What have you got to say for yourself?’ James denied that he had behaved inappropriately. James said that he recalled Mrs Hubbard as being a particularly difficult customer, and he had called and messaged her numerous times about the fitting of her new kitchen and the problems she had experienced with it. All these calls and messages were made on his work phone, supplied by Mega Kitchens Ltd. James said he had completed the fitting of Mrs Hubbard’s kitchen over three months ago, including the times he returned to Mrs Hubbard’s house to finish work with which she was not satisfied, and he wondered why she had chosen now to complain. James maintained that he had been professional throughout his dealings with Mrs Hubbard. James said that he too had deleted all the messages from his phone, as was his standard practice every month or so in order to free up memory space. Javid’s response was to say “Look, I’ve heard it all before from you – I’m not interested in hearing any more of your stories. This is gross misconduct – get out, you are fired”.
James lodged an immediate appeal against the decision to dismiss him. The appeal was heard the following week by Tom Barnaby, the Managing Director of Mega Kitchen’s Ltd. At the appeal, there was a print out of the phone records for James’ works phone, which had been obtained from the Internet Service Provider. This print out showed that there had been a total of 12 messages and/or calls between that phone and Mrs Hubbard’s phone, all around the time that Mrs Hubbard’s new kitchen was fitted, and all made within normal working time, with the exception of one at 6:30 one Friday evening and one at 10:30am the following morning. The printout did not provide details of the content of any of the messages or calls. James produced a print out of messages and calls from his personal phone for the same period – this showed no calls or messages passing between his personal phone and Mrs Hubbard’s phone. There was no other evidence used at the appeal hearing and James attended alone, but was not afforded the opportunity to ask any questions. At the end of the appeal hearing Tom read out a pre-prepared statement saying “As you have failed to establish that all the calls and messages made to this customer on your work phone were
work related, I am satisfied that you have committed an act of gross misconduct by behaving inappropriately towards a customer, and the decision to dismiss you stands”.
This morning you have received a copy of an ET1 form, which James has submitted to the Employment Tribunal, claiming that he was wrongfully and unfairly dismissed.
You are asked to prepare a report for the Board of Mega Kitchens Ltd., which sets out the legal issues that have arisen in this scenario and give your advice on the steps that should be taken by the company to try to address these problems
Further Case Scenario Background Information:
Mega Kitchens Ltd. Disciplinary Procedures (extract)
- Purpose and Scope
The Company’s aim is to encourage and help individuals to improve their conduct and achieve and maintain standards of job performance and attendance. The company rules are in your staff handbook and are also displayed in the general office at each site. This procedure applies to all employees. The aim is to ensure consistent and fair treatment for all.
- The disciplinary procedure is designed to establish the facts quickly and to deal consistently with disciplinary issues. No disciplinary action will be taken until the matter has been fully investigated.
- Employees will be informed of any allegations against them at least 3 days before any formal disciplinary meeting is held.
- At final stages only, employees will have the opportunity to state their case and be represented, if they wish, at the hearings by a fellow worker where deemed appropriate.
- No employee will be dismissed for a first breach of discipline except in the case of gross misconduct when the penalty will be dismissal without notice or payment in lieu of notice.
- The procedure may be implemented at any stage if the employee’s alleged misconduct warrants such action.
- The Procedure
Minor faults will be dealt with informally but where the matter is more serious the following procedure will be used:
Stage 1 – Oral Warning
If conduct or performance does not meet acceptable standards the employee will normally be given a formal oral warning, which will be recorded, but will be “spent” after 6 months, subject to satisfactory conduct and performance. S/he will be advised of the reason for the warning, that it is the first stage of the disciplinary procedure, and of his or her right of appeal.
Stage 2 – Written Warning
If the offence is a serious one, or if a further offence occurs, a WRITTEN WARNING will be given to the employee by the supervisor. This will give details of the complaint, the improvement required and the timescale. It will warn that action under Stage 3 (below) will be considered if there is no satisfactory improvement and will advise of the right of appeal. A copy of this warning will be kept on the individuals personnel file, but will be regarded as “spent” after 12 months of satisfactory conduct and performance.
Stage 3 – Final written warning or disciplinary suspension
If there is still a failure to improve either conduct or performance to a satisfactory level; or, if the misconduct is sufficiently serious to warrant only one written warning but not sufficiently serious to warrant dismissal (in effect both a first and final warning) A FINAL WRITTEN WARNING will be given to the employee. This will give details of the complaint, and warn that dismissal will result if there is no satisfactory improvement within a specified timescale, and will advise of the right of appeal. A copy of this final written warning will be kept by the line manager but it will be “spent” after 24 months, subject to satisfactory conduct and performance. Alternatively, consideration may be given to imposing a penalty of a disciplinary suspension without pay for up to a maximum of five working days.
Stage 4 – Dismissal
If conduct or performance is still unsatisfactory and the employee fails to reach the prescribed standard DISMISSAL will normally result. An appropriate senior manager can take the decision to dismiss. The employee will be provided, as soon as reasonably practicable, with written reasons for the dismissal and the date on which the employment will terminate.
An employee who wishes to appeal against a disciplinary decision should inform the Human Resources Manager within two working days. An appropriate manager along with the HR Manager will hear the appeal and their decision will be final. At the appeal any disciplinary penalty imposed may be reviewed but cannot be increased.
5) Gross Misconduct
The following list provides examples of offences that are normally regarded by the Company as gross misconduct:
- Theft, fraud, deliberate falsification of records, deliberate damage to company property
- Fighting, and physical assault on another person
- Serious incapability through alcohol or being under the influence of illegal drugs
- Any operation of machinery after taking any alcohol or drugs which impair abilities to operate machinery
- Serious negligence which causes unacceptable loss, damage or injury
- Serious act of insubordination
- Any periods of absence exceeding 3 days without “good cause” and without the express permission of management (employees should note the sickness absence reporting procedure in staff handbook)
If you are accused of an act of gross misconduct, you may be suspended from work on full pay, normally for no more than five working days, while the company investigates the alleged offence. If, on completion of the investigation and the disciplinary procedure, the company is satisfied that gross misconduct has occurred, the result will normally be summary dismissal without notice or payment in lieu of notice.
Mega Kitchens Ltd. Grievance Procedure (extract)
Purpose and Scope
This Procedure applies to all current employees of the company and covers all issues which are amenable to local determination and resolution. The guiding principle of this Procedure is that issues should be resolved as near their point of origin as possible and as soon as possible. In consequence the timescales included in the Procedure may be extended or shortened by mutual consent.
An employee who wishes to raise any issue in which s/he is directly concerned must first raise it with their immediate manager, making it clear that s/he is taking the first step in the procedure.
Their immediate manager will arrange a meeting as quickly as possible so that the issue can be discussed with the employee(s). This meeting will be held in a room away from the general work environment.
If a satisfactory solution has not been reached within a maximum of 5 working days the employee may refer the issue to their Manager’s superior under Stage 3 of the Procedure.
The Manager’s superior will arrange a meeting as quickly as possible so that the issue can be discussed with the employee(s). If the employee wishes to have a fellow employee as their representative present at this meeting, then the employee must notify the manager of their representative’s name and they will be invited to attend.
If a satisfactory solution has not been reached within seven working days, the employee may refer the issue to the HR Manager who will arrange for a Senior Manager to meet with the employee(s) and (where requested) their representative under stage 4 below.
The Senior Manager will arrange a meeting as soon as possible so that the issue can be discussed with the employee(s) and his/her representative – this meeting shall take place not more than seven working days from the employee’s request.
If the Senior Manager is unable to resolve the grievance, the employee(s) can request a final “Appeal” meeting with the Managing Director.
Final Appeal Meeting
The Managing Director will arrange a meeting with the employee(s) and his/her representative in no less than 7 working days (subject to his/her availability). Any decision taken by the Managing Director to resolve the grievance at this stage is final.
Note: If the grievance involves a complaint against the immediate manager of the employee(s) the matter can be referred, in the first instance directly to the Manager’s superior (as under stage 3). However, the immediate manager must be informed in writing of the grievance against him/her.
Extracts from Mega Kitchens Ltd. Staff Handbook:
“Sickness absence reporting:
All staff who are unable to attend work because of illness must telephone into their depot and speak to their line manager by no later than 10.00 am on the first morning of illness. If the illness is likely to last more than 1 week (6 continuous working days) then a doctors’ certificate is required. If an employee is unable personally to telephone in, then they can ask another person – i.e. relative or spouse, to call in on their behalf.
Failure to notify the company as above may be treated as unauthorised absence under the disciplinary procedure”.
All staff are entitled to 20 days paid holiday a year, plus all official Bank Holidays. The holiday year is from 1 October to the 30th September annually. All requests to take leave must be approved by your Manager, and will not normally be refused unless the needs of the service require you to work. To avoid any possible disappointment, you should always clear holiday dates with your Manager well in advance before making bookings or travel arrangements. Holiday entitlement must be used by end of each holiday year.
Your Manager will advise you if, for operational reasons, you are required to take leave at certain times of the year. However, due to the nature of our business there is an expectation that, where possible, the majority of your holiday entitlement will be taken during the months of July and August as these are the slowest business months for the Company.
If your employment begins or ends part way through the leave year, your holiday entitlement for that year will be calculated on a pro-rata basis for each complete calendar month of service”.
“Other Absence: Special Leave or temporary changes to working times
If employees have domestic, family or personal reasons, then unpaid leave of a short duration may be allowed at the discretion of your manager. If there are domestic, family or personal reasons for changes in your working times, these should be discussed and agreed with your Manager.”
Extracts from ‘Contract of Engagement’ between Mega Kitchens Ltd and Fitters:
- “The Contractor agrees that all services will be rendered by him/her/it as an independent contractor and that this agreement does not create an employer-employee relationship between the Contractor and the company. The Contractor shall have no right to receive any employee benefits provided by the company to its employees.”
- “In the event of the Contractor being unable or unwilling to perform the services personally, he shall arrange at his own expense entirely, for another suitable person to perform the service. The substitute contractor must be approved by the company before performing the contracted work.”
- “For the avoidance of doubt, there is no obligation on the company to provide you with a minimum amount of work or any work at all. However, where work is offered you agree to provide your services to the company for a minimum number of 40 (forty) hours per week. You are under no obligation to accept work beyond this agreed minimum, but may accept work in excess of 40 hours in any one week. You are free to provide your services to another company outside the agreed minimum number of 40 hours per week.”
- “The Contractor agrees to be responsible for all his/her own payments of Income Tax, National Insurance Contributions and other similar payments connected with the contract.”
- “The Company agrees to provide the Contractor with a suitable vehicle to perform the service contracted for. The said vehicle will remain the property of the company throughout the contract and must be returned immediately to the company upon termination of the contract. The company will be responsible for insurance, road fund licence and maintenance costs of the vehicle and will reimburse the contractor for the cost of fuel for the vehicle, but such costs will be limited to costs incurred in carrying out the company’s business only. The vehicle supplied will carry the company’s logo and the contractor is responsible for ensuring the logo remains visible at all times. The contractor will be responsible for the supply and costs of his/her own tools and equipment.”
- “The Contractor agrees to provide a professional and competent service throughout the terms of the contract and to represent the company in an appropriate and professional manner. Failure to adhere to the terms of this contract will subject the Contractor to the provisions of the company’s disciplinary procedure, as set out in the company’s staff handbook, the contents of which are hereby incorporated into this contract and to which the Contractor agrees.”
- “The Contractor agrees that for a period of six months after termination of the agreement, s/he shall not be engaged, on his/her own account or for another company, in any work of the same or similar nature to that carried out by the Contractor on behalf of the company, and shall not divert or attempt to divert from the company any business of any kind in which it is engaged, or solicit any of the company’s suppliers or customers.”
Maximum 50 marks
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