The Legal Aspects of Human Resource Management

1. Introduction

Human resource management is not only about attracting, recruiting and retaining the workforce; it is also about managing them in a legal and ethical manner. This means that HR managers need to be well-versed in employment law so that they can advise the company on the best course of action to take in order to avoid legal liability. In this essay, we will discuss some of the legal aspects of HRM, namely at-will employment, wrongful termination, and discrimination.

2. At-will employment

At-will employment is a doctrine that is based on the principle of freedom of contract. This means that an employer can terminate an employee at any time and for any reason, as long as it is not illegal. Likewise, an employee is free to leave his or her job at any time. The main advantage of at-will employment is that it allows employers to flexibly manage their workforce according to their needs. For example, if a company is facing financial difficulties, it can reduce its workforce by terminating employees who are not essential to the business.

However, there are some exceptions to at-will employment. For instance, an employer cannot terminate an employee if doing so would violate public policy. Public policy refers to principles that are considered to be in the public interest, such as the right to a safe and healthy working environment or the right to freedom from discrimination.

Another exception to at-will employment is when an employee has an explicit or implicit contract with his or her employer that stipulates the terms and conditions of employment. For example, if an employee has been promised a certain level of job security, then the employer cannot terminate him or her without just cause.

Lastly, even in cases where at-will employment applies, an employer cannot terminate an employee in a way that violates the principle of good faith and fair dealing. This principle requires both parties to act in a way that is fair and reasonable, taking into account each other’s interests.

Let’s now look at a case study to see how these concepts apply in practice.

2. 1 Dan’s story

Dan was employed by ABC Corporation as a sales manager. He had been with the company for 5 years and had received positive performance reviews throughout his tenure. However, one day he was called into his boss’s office and told that his position was being eliminated due to cost-cutting measures. He was given two weeks’ notice and told to clear out his desk by the end of the day.

Dan consulted with a lawyer to see if he had any legal recourse against ABC Corporation. The lawyer explained to him that, since he was employed at will, his employer could lawfully terminate him without cause. However, the lawyer also advised him that he could file a wrongful termination claim if he believed that his termination was in violation of public policy or good faith and fair dealing.
Dan decided to file a wrongful termination claim against ABC Corporation. He argued that his termination was in violation of public policy because it was based on cost-cutting measures and not on his performance. He also argued that his employer had not acted in good faith and fair dealing because it had failed to give him adequate notice of his termination.

The court agreed with Dan and ordered ABC Corporation to reinstate him in his position and pay him damages for the harm that he had suffered.

2. 2 Public policy

As we saw in Dan’s story, public policy is one of the exceptions to at-will employment. An employer cannot terminate an employee if doing so would violate public policy. For example, it would be against public policy to terminate an employee who refuses to perform an illegal act, such as fraud or bribery. Similarly, it would be against public policy to terminate an employee who reports illegal activity within the company (i.e. whistle blowing).

3. Wrongful termination

Wrongful termination occurs when an employer terminated an employee in violation of the law or of a contract between the parties. As we saw in Dan’s story, there are two main types of wrongful termination: violation of public policy and breach of good faith and fair dealing.

3. 1 Whistle blowing

Whistle blowing is when an employee reports illegal or unethical behavior within the company. For example, an employee might report that his or her boss is embezzling company funds or that the company is violating environmental regulations. Whistle blowing is protected by public policy, which means that an employer cannot terminate an employee for doing it.

3. 2 Good faith and fair dealing

As we mentioned before, the principle of good faith and fair dealing requires both parties to act in a way that is fair and reasonable, taking into account each other’s interests. This principle is implicit in all contracts, including employment contracts. This means that, even in cases where at-will employment applies, an employer cannot terminate an employee in a way that violates good faith and fair dealing. For example, an employer cannot terminate an employee without giving him or her adequate notice or without providing a valid reason for the termination.

4. Discrimination

Discrimination occurs when an individual is treated unfairly or less favorably than others on the basis of a characteristic such as race, gender, ethnicity, age or religion. Discrimination can occur both within the workplace (i.e. when hiring, promoting or firing employees) and outside of it (i.e. when providing goods or services to customers). It is important to note that discrimination can be both intentional (i.e. when someone deliberately treats someone differently because of their race) and unintentional (i.e. when someone has a neutral policy that has a disproportionately negative impact on a particular group).

There are various laws in place to protect individuals from discrimination, such as the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967. These laws make it illegal for employers to discriminate against employees on the basis of race, color, national origin, sex, religion, age or disability.

4. 1 Racial discrimination

Racial discrimination occurs when an individual is treated unfairly or less favorably than others on the basis of their race or skin color. Racial discrimination can occur both within the workplace (i.e. when hiring, promoting or firing employees) and outside of it (i.e. when providing goods or services to customers).

There are various laws in place to protect individuals from racial discrimination, such as the Civil Rights Act of 1964. This law makes it illegal for employers to discriminate against employees on the basis of race, color, national origin or ethnicity.

4. 2 Gender discrimination

Gender discrimination occurs when an individual is treated unfairly or less favorably than others on the basis of their sex or gender. Gender discrimination can occur both within the workplace (i.e. when hiring, promoting or firing employees) and outside of it (i.e. when providing goods or services to customers).

There are various laws in place to protect individuals from gender discrimination, such as the Civil Rights Act of 1964 and the Pregnancy Discrimination Act of 1978. These laws make it illegal for employers to discriminate against employees on the basis of sex, gender, pregnancy or childbirth.

4. 3 Ethnic discrimination

Ethnic discrimination occurs when an individual is treated unfairly or less favorably than others on the basis of their national origin or ethnicity. Ethnic discrimination can occur both within the workplace (i.e. when hiring, promoting or firing employees) and outside of it (i.e. when providing goods or services to customers).

There are various laws in place to protect individuals from ethnic discrimination, such as the Civil Rights Act of 1964 and the Immigration and Nationality Act of 1965. These laws make it illegal for employers to discriminate against employees on the basis of national origin or ethnicity.

4. 4 Age discrimination

Age discrimination occurs when an individual is treated unfairly or less favorably than others on the basis of their age. Age discrimination can occur both within the workplace (i.e. when hiring, promoting or firing employees) and outside of it (i.e. when providing goods or services to customers).

There are various laws in place to protect individuals from age discrimination, such as the Age Discrimination in Employment Act of 1967. This law makes it illegal for employers to discriminate against employees on the basis of age.

4. 5 Religious discrimination

Religious discrimination occurs when an individual is treated unfairly or less favorably than others on the basis of their religion or beliefs. Religious discrimination can occur both within the workplace (i.e. when hiring, promoting or firing employees) and outside of it (i.e. when providing goods or services to customers).

There are various laws in place to protect individuals from religious discrimination, such as the Civil Rights Act of 1964 and the Religious Freedom Restoration Act of 1993. These laws make it illegal for employers to discriminate against employees on the basis of religion or beliefs.

FAQ

The main legal aspects of human resource management include compliance with employment law, health and safety law, and privacy law.

Human resource managers can ensure compliance with employment law by staying up to date on changes in the law, developing policies and procedures that comply with the law, and training employees on their rights and responsibilities under the law.

The consequences of non-compliance with employment law can include civil penalties, such as fines or damages, and criminal penalties, such as imprisonment.

Changes in employment law can impact human resource management by requiring changes to policies and procedures, increasing compliance costs, or exposing the organization to greater liability.

The challenges that human resource management faces in relation to employee privacy rights include balancing the need for information with the right of employees to privacy, ensuring that information is collected and used only for legitimate business purposes, and protecting sensitive information from unauthorized access or disclosure.

Human resource managers can protect their organization from liability in relation to employee health and safety issues by implementing policies and procedures designed to promote a safe work environment, providing training on health and safety risks and how to avoid them, conducting regular audits of workplace conditions, and taking prompt corrective action when hazards are identified.