UK Legal System: Law Handbook For Start-up Companies, Legislation, Case Studies - Essay.

The legal system of United Kingdom

You have recently joined a law firm as trainee consultant and you manager asked you to prepare a “Law Handbook” which will help the new start-up companies to help on the legal system and about the key legislations that they are required to know for effectively running their business. This handbook must contain all salient legislation which a businessman must know and their impact due to non-fulfilment.  

a. Starting with an explanation of legal system of UK, include different sources of laws that organisations specially the start-up organisations must comply with. You also need to discuss each of them with its scope and impact on the businesses. 

b. Government has a vital role in the legal system of any country, you need to highlight the role of UK Government in law making and explain in detail with its salient points. Further, elaborate how statutory and common law is applied in the justice courts. 

You need to evaluate the effectiveness of the legal system in terms of recent reforms and developments. Give specific examples. 

c. You need to explain key legislation on employment and contract law with some specific examples and illustrate how these laws have potential impact upon businesses. Further, discuss their impact on the businesses with some relevant examples. 

You have submitted your task 1 and you manager is very happy with your effort. Now, he assigned you to advise to your clients who are local running businesses in your area.  You have been given three case studies to review which represent various legal problems affecting local businesses.  The areas of law to be considered contain company Law (including insolvency and liquidation); contract Law (including termination of contract) and employment Law (including Alternative Dispute Resolution). For each case presented you need to apply and justify a legal solution to the problem.

Case 1:

Gordon works as a salesman in the Orange Computers Ltd store.  His contract of employment provides for an annual salary of £10,000 and commission payments (at 9%) on any computers and peripherals he sells.  In the last three years the commission payments have amounted to an average of £11,000 per annum.

In 2015, due to cut throat competition in the local market, the business is adversely affected.  The manager, Fred, informs Gordon that the business is in severe financial trouble and that he must reduce the firm’s outgoings.  In response, Fred asks Gordon if he will forgo his salary for 2015, 2016 and 2017, and simply accept payments of commission.  Fred explained to Gordon that this was required of him (and all other staff) or the business would probably not survive and it would have to be wound up owing substantial debts to creditors.  As such, Gordon accepted the variation of the contract.

In 2016, the economy began to grow, and in small part due to governmental incentives for investment in information technology, the store has managed to trade its way through the difficult times and is making a healthy profit.  As such, Gordon feels that he should be able to receive his wages for 2017 and not simply have to rely on his commission as agreed in 2015.  He also wishes to know if he can claim for his wages from 2015 and 2016 as Orange Computers Ltd has sufficient profits to repay this money.

Advise Gordon whether he can obtain his wages for 2017, and also whether he would have any claim for the wages he agreed not to accept in the year 2015 and 2016.  Discuss in context of employment Law (including Alternative Dispute Resolution

Case 2:

After doing some research on the internet, Janet decided to call Virgin Media to arrange the purchase and installation of the internet package costing £35.00 per month, including the phone lines (monthly line rental of £11.00). The engineer came on the arranged date at 9am and installed the internet. However, he could not find the telephone point on the switchboard and suggested that he will call his supervisor and come back. Janet waited until 5pm that day for the engineer but he never returned back to complete the task. She called the Virgin Media and complained about the engineer and that she still hasn’t got the phone line yet. Finally, after several calls and e-mails they sent another engineer to fix the phone line after 3 weeks.

When the invoice from the Virgin Media arrived Janet was charged for the whole package from the day the internet was installed including the monthly phone line rental. Janet is extremely upset since she believed that her phone line should be charged after 3 weeks only.

Analyse the legal position of the service provider (Virgin Media) and the consumer (Janet) on the basis of your understanding on the various elements of contract law.

Case 3:

Blackhorse Limited is a security company providing security guards to other businesses, which is one of your client. The company has 50 employees. The company has minimal overheads, apart from the "wage cost" of the employees.

 The company had four main customers, the largest of which failed leaving Blackhorse limited with a bad debt of £100,000. Since that bad debt was incurred three months ago the company has recovered its previous level of turnover, but that turnover is now spread over ten customers.

 The cash flow reduction of £100,000 caused by the bad debt resulted in Blackhorse limited "stretching the due dates" of the payments needed to be made to the company's creditors. One of those creditors issued a winding up petition two weeks ago and the court is to consider whether or not to make a winding up order at a hearing set to take place in three weeks’ time. Discuss the different options available to your client to avoid compulsory winding up.

a.  Suggest an appropriate legal solution to each of the problems. 

b. Provide justification for the advice and solution given. 

Give an assessment of the positive and negative impact of the solution, you are suggesting to the business. 

c. Recommend legal solutions based on a different country’s legal system and/or an alternative legal framework. 

The legal system of United Kingdom

The law of the United Kingdom has their own legal system which is applicable in different areas like England and Wales, Northern Ireland, and Scotland. The great Supreme Court of the United Kingdom is one of the highest courts in the world. The United Kingdom Parliament, Northern Ireland Assembly, Scottish Parliament and National Assembly for Wales are the different legislatures in the United Kingdom which are the highest legislatures also.

The basic source of the law is the common law of the world where the civil and criminal is the main two parts and the non-statutory civil law like contract law, torts law. The statues of the UK parliament is basically depends on the Common law which are basically formed for the establishment of principals of the law of United Kingdom. The law has no major codification but the principals were made as per the development of the law by the judges in the court and applied statues, precedents and relevant principals. The courts of the England and Wales are controlled by the Senior Court of England and Wales, Court of Appeal and the High Court of Justice for the civil purposes and the Crown Court for the criminal cases. The Supreme Court is the common court for the England, Wales and Northern Ireland for the appeal cases.   

The Separation of Powers of the United Kingdom control the executive parts of the   government of the United Kingdom, Scottish Government, Wales Government and the Northern Government, judicial parts are controlled in the all parts and the legislative part is applied for the UK Parliament, Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly. The prime ministers are the original government who use their powers in every part of the country through the parliament and the UK Constitution.  

The United Kingdom Labor Law controlled the relation of the business between the workers, employers and the trade union of any company. The common contract law is applicable in the United Kingdom.   

The issue is whether Gordon can obtain his wages for 2017 and if he can claim for his wages in the year of 2015 and 2016.  

As per the case study, Gordon who works under the company have adjusted his wages of 2015 and 2016 due to the financial crisis. When the market has rises the company must give the payment to the employ. As per the Employment Rights Act 1996 he has rights to claim is wages from the company. The pat III of this act defines the protection of the wages and the sec- 18 gives the provision of the limits on the amount and the tine of the deduction for the shortage of amount. The sec- 19 gives the determination of wages by the reference to the shortage .

As per the case study, when the company is facing the financial crisis, the manager  has ask to the employees to not take the annual salary and only they will be paid the commission payment for the employment to the employee. The manager told to the employee about not giving the wages for the financial crisis and he and other employees will not get that for the 2015, 2016, 2017. However, when the financial growth has begun it is the duty of the employer that he must pay the wages to the employee because they overcome the crisis .

Key legislation on employment and contract law

As per the Employment Right Act the employer can deduct the wages amount for the financial crisis but they need to pay it back to the employees. Here, as per the situation the employee can take the help from the alternative dispute resolution for the conflict between him and the manager. The employee can take help from the dispute practitioner and resolve the conflicts in his work place. The alternative dispute resolution practitioner can use the mediation process for solving the disputes. This is the process which concerned with the employment in any organization where the employee wants to solve the conflicts with the employer.

Conclusion

As per the case study, it can be concluded that the employer has right to deduct the wages amount for the crisis of the company where the employee must agree with the deduction. The employee can claim the wages from the employer if the organization overcomes the whole crisis and they must pay the wages.

According to the case study, the issue is whether Janet are bound to pay the inter et charges where the Virgin Media is failed to provide the services from the mentioned date or the company are falsely claiming the charges.

As per the Contract Law in United Kingdom, the Postal Rule will be applied in this case where it can be stated that two or more that two parties can form a contract through the post box which includes the letter, fax, email or telephone. When one party makes the offer and another party will accept the offer of the contract which is valid as per the Contract Law .

The concept of the Postal Rule was first introduced in the case of Adams v Lindsell where parties formed the contract through postal service. Another case Henthorn v Fraser where the postal rule also applied because the contract has been made though the postal service.

As per the case study, Janet is the customer where he has ordered the Virgin Media for the installation of the internet service. The service provider sent an engineer for the installation process but he found that there is no phone connection and promised to Janet to come back by with the needed tools for the installation but he did not come back but later after 3weeks the company again sent another engineer for the installation and later she had found that the company charged her the whole package.

As per the Postal Rule, there must be the elements of the contracts should be presnts which are:

• Offer where one party must give the offer. Here the consumer i.e Janet offer the service provider to provide her the internet connection.
• The acceptance which was accepted by another party and herein the case study the service provider has accepter to pro=vide the service to the consumer through the email.
• The consideration between the parties also present in between the contract
• The contract was made verbally through an email which is legal as per the contract act.

Therefore, it can be stated that the service provider breach the contract and claim the full package internet charges from the consumer where they have failed to provide the service from the said date.

Conclusion

As per the case study, it can be concluded that the Virgin Media service provider of the internet has breach the contract which was made through the postal service and breach the elements of the postal rule. Now, the consumer Janet can take legal action against the company and not pay for the full package internet service.

Case studies for common problems in company law, contract law, and employment law

As per the case study, Blackhorse is a company who provides security guards for another business and consists of 50 employees. They have four important customers who uses the service. However, the one of the largest customer failed o give their debts of the Blackhorse limited which causes the failed of payment to the creditors of the company. Now one of the creditors of the company has issued a winding up petition two weeks ago and the court is to consider whether or not to make a winding up order at a hearing set to take place in three weeks’ time.

As per the Employment Rights Act 1996, the manager of the company first needs to make the payment to the creditor out of their financial crisis. They can reduce the wages amount of the employee then they must uses the wages amount to pay the creditors bill. The company has £100,000 bad debt which they need to pay the amount to creditors. Now, if the company can reduce the amount of wages where they can take pay the creditors amount. When the company overcomes their financial crisis then they can pay the employers of their due amount. The Employer Rights Act gives the provisions to the employer to provide the power of reduce the wage amount for from the employees and the employee can adjust with the company policy for failing in the financial crisis. The United Kingdom Labor Law controlled the relation of the business between the workers, employers and the trade union of any company. The common contract law is applicable in the United Kingdom .   

As per the Employment Rights Act 1996 he has rights to claim is wages from the company. The pat III of this act defines the protection of the wages and the sec- 18 gives the provision of the limits on the amount and the tine of the deduction for the shortage of amount. The sec- 19 gives the determination of wages by the reference to the shortage.

Reference: 

Adams v Lindsell ([1818] 1 B

Blundell, Richard, Claire Crawford, and Wenchao Jin. "What can wages and employment tell us about the UK's productivity puzzle?." The Economic Journal 124.576 (2014): 377-407.

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Confraria, João, et al. "A Case Study of Density of Retail Outlets in Portugal: Regulation and Politics in Postal Markets." The Changing Postal and Delivery Sector. Springer International Publishing, 2017. 97-114.

Hearn, John. "Protecting Consumers Using Postal and E-Commerce Delivery Services in Competitive European Markets." The Changing Postal and Delivery Sector. Springer International Publishing, 2017. 127-137.

Henthorn v Fraser [1892]

McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.

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