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The service sector is a rapidly growing industry. The service sector comprises of undertakings where individuals offer their understanding and time to expand output, performance, probability, and sustainability. The basic distinguishing factor of this sector is the provision of services rather than end goods. The service sector companies involve those companies provide services to other companies as well as final clients. Services companies include hotels, transportation companies, entertainment companies, pest control companies, security companies and many others (Keshawn 2005).
Employment laws are laws set out to govern the activities involving employer employee relationship. The impact of employment laws on the companies in the service industry could as well mean the difference between a corporation being able to stay afloat in the recession waters or not. In my analysis I will begin by discussing the areas of employment law that has the greatest impact on the service sector. I will then describe the measures that organizations take to comply with these laws in a manner that best fits with the needs of the business. Finally, I will discuss the potential impact of failing to comply with employment law (Simon 2005).
Areas of Employment Law Have Greatest Impact on the Service Sector
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One of the areas of employment law that has greatest impact on the service sector is the Contract of Employment. The fundamental aspect of employment law in almost each nation is that the freedoms and obligations of an employee and his or her employer amongst them ought to be arbitrated through this contract of employment between them. This has been practiced since the fall of the feudal system and has grown to be the central unit of contemporary economic dealings. Numerous terms and conditions, however, accompany this contract as obscured by common law or legislation, in such a way that the people are denied the freedom to accept some things to safeguard workers, and stimulate a running labour market. Looking at the U.S laws, we discover that quite a huge number of states permit the will to create or terminate employment. This means that an employer has the legal right to hire or fire an employee at any time for any legal reason, as well as a termination in desecration of public policy (Courtney 2007).
Another areas of employment law that has had a significant impact on service sector companies, t is employment tribunal claims. There has been a sharp up surge in the employment tribunal claims count. This is due to the fact that workers are regularly declining to uphold the well-defined protocols that have been stipulated by law. This might be blamed on the fact that companies basically are unwilling to look for expert legal counsel once they are faced with no other alternative course of action than to render some of their employees useless, or it might also be due to the fact that companies are doing their level best evade paying the least possible sum of redundancy pay that is required by law (Kieth 2005).
This sudden upsurge in the sum of employment tribunal claims especially in the service industry has not been overlooked by the administration. Announcements and declarations have been made by various state leaders that there ought to be an assessment on the impact of prevailing employment law procedures and protocals. It has also, presently, been acknowledged that it could be essential to change the period of time a worker would be allowed to put forward an employment tribunal claim from one year to two years.
Finally an aspect of employment law that has impacted the service sector companies is the Unfair Dismissals Acts 1977 to 2007.According to the Unfair Dismissals Acts 1977 to 2007 situations whereby unfair dismissal could hold ground is when:
- Your employer does away with the employment contract, with or without prior notification
- You do away with your employment contract, with or without prior notification, following the behavior of your employer. That is also referred to as constructive dismissal
Breaking of the unfair dismissal act by a business in the service sector would mean either they pay the compensatory reward or the employee is reinstated (Summers 2007).
The purpose of the compensatory award is to pay off the worker for any loss of wages and any other direct losses due to the unfair dismissal. The compensatory award is a figure that is determined by the tribunal and that it decides to be fair and reasonable given the situation.
Reinstatement is whereby the worker is employed back to the company under the same contractual agreement, and with the same job he was doing previously. Re-engagement on the other hand is whereby the worker is employed back to the company under the same contractual agreement, but assigned to a different job. However this remedy is only applied if there still exists trust between the employer and employee and there is a possibility of them co-existing peacefully (Norman 2008).
Measures That Organizations Take To Comply With These Laws
Most organizations in the service sector therefore have to lay down measures in order to comply with these laws in a manner that best fits the needs of the business.
One measure is presenting the workers with the written testimonials of employment. In many nations across the globe it is required by law to present written testimonials of employment together with the essential terms (essentialia negotii) to a worker. The purpose of presenting this document to an employee, is allow him or her to have a clear understanding of what entails the job, the expectations of his or her employee, terms of payment, holiday privileges, job description, notification in case of removal from office and other terms. Nonetheless, this contract is only limited to people being paid more than the minimum wage and employers do not present this document to employees working for less than minimum wage. An employee, for instance, will be hesitant to binding themselves to a contract that gives their employer their employer to fire them at will. There are, therefore, specific parts that individuals may blatantly refuse to accept due to the fact that they consider them unjust. Nevertheless this all relies completely on the specific legislation of the nation in which the employment is (Scott 2009).
Looking at Stephen’s article on employment law, another measure taken by this service industry companies is that they take advantage of this present economic condition as a scapegoat and this certainly still holds. This is whereby these companies fire employees who they deem useless and blame it on the harsh economic climate. Attempting to save your corporations money, in expense of breaking the law, might result in your corporation spending much more money than the one that you were trying to save (Stephen, 2009).
The Potential Impact of Failing to Comply With Employment Law
Failing to comply with the employment laws would leads to some grave consequences. Firstly the companies in the service sector could incur losses through paying off the employees for example a compensatory award. This is what is paid off to an employee due to unfair dismissal according to the unfair dismissal act.
Secondly these companies, for example in case of an international hotel could gain a bad name and hence loose customer. This is the case, if they are accused of discrimination and also if they are involved in court cases.
Failing to comply with employment laws would also result to uneasiness among the employees. This is due to the fact that they feel that they are being exploited and that their rights are being violated. This could result to strikes which would disrupt the normal running of these service industry corporations (Larson 2010).
In conclusion as the service sector grows, so does the need to protect the people employed in this sector. It is therefore quite obvious that there are numerous fundamentals of employment law that particularly impact the service industry both positively and negatively that should also be looked into This includes: statutory maternity leave pay, the minimum wage and other payouts.
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