ACCA LW · Chapter 6
Employment law MCQs with Answers
11 multiple-choice questions on Employment law for ACCA LW Corporate and Business Law. Try each one before revealing the answer and explanation.
Practise this chapter interactivelyQuestion 1
Which test, illustrated by Ready Mixed Concrete v Minister of Pensions, is used by the courts to decide whether a person is an employee by considering all the features of the relationship?
- A) The multiple (economic reality) test
- B) The control test only
- C) The officious bystander test
- D) The but for test
Show answer & explanation
Answer: A) The multiple (economic reality) test
Ready Mixed Concrete established that a contract of service exists where the worker provides work and skill in return for a wage, accepts a sufficient degree of control, and the other provisions are consistent with employment. Courts therefore weigh many factors, including mutuality of obligation and personal service. Control alone is no longer decisive, and the other tests relate to implied terms and causation.
Question 2
A contract allows a driver to send any substitute driver in her place when she is unable to work. Following Express & Echo Publications v Tanton, why does this point away from employment?
- A) Drivers can never be employees
- B) The right to send a substitute shows the employer exercises a high degree of control
- C) A contract of employment must be made in writing
- D) An unfettered right of substitution is inconsistent with the requirement of personal service
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Answer: D) An unfettered right of substitution is inconsistent with the requirement of personal service
A contract of employment requires the worker to perform the work personally. Where the worker has a genuine right to send a substitute, the obligation of personal service is absent, which strongly indicates self-employment. Employment contracts need not be in writing, although a written statement of particulars must be supplied.
Question 3
Which of the following is a common law duty implied into every contract of employment on the part of the EMPLOYER?
- A) A duty to provide a reference for every former employee
- B) A duty to give a pay rise each year
- C) A duty to provide work at all times regardless of whether payment is made
- D) A duty not to destroy the relationship of mutual trust and confidence
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Answer: D) A duty not to destroy the relationship of mutual trust and confidence
Employers are subject to implied duties to pay agreed wages, take reasonable care for employees' safety, and not, without reasonable cause, act in a way likely to destroy mutual trust and confidence. There is no general duty to provide a reference or annual pay increases. A duty to provide work exists only in limited cases, such as where earnings depend on work being given.
Question 4
Which of the following is a duty implied by common law on the part of the EMPLOYEE?
- A) To work unlimited unpaid overtime when requested
- B) To obey every instruction, whether lawful or not
- C) To give faithful service and not to compete with the employer during the employment
- D) To disclose any personal financial difficulties to the employer
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Answer: C) To give faithful service and not to compete with the employer during the employment
Employees owe implied duties of fidelity (faithful service), reasonable care and skill, and obedience to lawful and reasonable orders. In Hivac v Park Royal Scientific Instruments employees breached their duty of fidelity by working for a competitor in their spare time. There is no duty to obey unlawful orders, and no general duty to disclose personal financial matters.
Question 5
An employer dismisses an employee with immediate effect, without notice, for being five minutes late on one occasion. The employee's contract requires one month's notice. What claim is most clearly available at common law?
- A) Redundancy payment, because the post ceased to exist
- B) Wrongful dismissal, entitling the employee to damages normally based on pay for the notice period
- C) Constructive dismissal, because the employee resigned
- D) No claim, because an employer may always dismiss without notice
Show answer & explanation
Answer: B) Wrongful dismissal, entitling the employee to damages normally based on pay for the notice period
Wrongful dismissal is a common law claim for breach of contract, typically dismissal without the notice required by the contract or statute where there is no gross misconduct justifying summary dismissal. A single minor lateness is unlikely to amount to gross misconduct. Damages usually reflect the wages and benefits the employee would have earned during the notice period, subject to mitigation.
Question 6
Under the Employment Rights Act 1996, which of the following is NOT one of the potentially fair reasons for dismissal?
- A) The employee's capability or qualifications
- B) The employee's conduct
- C) Redundancy
- D) The employee's membership of a trade union
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Answer: D) The employee's membership of a trade union
The potentially fair reasons are capability or qualifications, conduct, redundancy, statutory restriction (where continued employment would be illegal) and some other substantial reason. Dismissal because of trade union membership or activities is automatically unfair. Even where a potentially fair reason exists, the employer must also act reasonably in treating it as sufficient reason for dismissal.
Question 7
An employer unilaterally cuts an employee's salary by a quarter without agreement. The employee resigns promptly in response. Following Western Excavating v Sharp, what is the employee most likely able to claim?
- A) Nothing, because an employee who resigns can never claim to have been dismissed
- B) Redundancy, because the employee's role has changed
- C) Constructive dismissal, because the employer committed a repudiatory breach of a fundamental term
- D) Wrongful dismissal only if the employer gave notice of the cut in writing
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Answer: C) Constructive dismissal, because the employer committed a repudiatory breach of a fundamental term
Constructive dismissal occurs where the employee resigns in response to a repudiatory breach of contract by the employer. Western Excavating v Sharp established that the employer's conduct must be a significant breach going to the root of the contract, not merely unreasonable behaviour. A unilateral substantial pay cut is a classic example, and the employee should resign without undue delay to avoid being treated as accepting the change.
Question 8
Which of the following situations falls within the statutory definition of redundancy under the Employment Rights Act 1996?
- A) The employee is dismissed for persistent poor time-keeping
- B) The employee's performance is below the required standard
- C) The employer's requirements for employees to carry out work of a particular kind at the employee's workplace have diminished
- D) The business is sold and all employees transfer to the buyer on the same terms
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Answer: C) The employer's requirements for employees to carry out work of a particular kind at the employee's workplace have diminished
Redundancy arises where dismissal is wholly or mainly due to the employer ceasing (or intending to cease) business, ceasing business at the employee's place of work, or a reduction in the requirement for employees to do work of a particular kind. Dismissal for conduct or capability is not redundancy. On a business transfer covered by the transfer of undertakings rules, employees transfer automatically, so no dismissal occurs.
Question 9
An employee under notice of redundancy is offered suitable alternative employment by the employer and unreasonably refuses it. What is the effect on the employee's entitlement to a statutory redundancy payment?
- A) The employee receives double the normal redundancy payment
- B) The employee loses the right to a statutory redundancy payment
- C) The employee's entitlement is unaffected because the original job has gone
- D) The employee becomes entitled to claim wrongful dismissal instead
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Answer: B) The employee loses the right to a statutory redundancy payment
Where an employer offers suitable alternative employment and the employee unreasonably refuses it (or unreasonably leaves during the statutory trial period), the employee is not entitled to a redundancy payment. Whether the offer is suitable and the refusal unreasonable depends on factors such as pay, status, location and the employee's personal circumstances. The refusal does not create a wrongful dismissal claim.
Question 10
A milkman was expressly forbidden by his employer to give lifts to passengers. He nevertheless allowed a boy to help him deliver milk, and the boy was injured by his negligent driving. In Rose v Plenty, why was the employer vicariously liable?
- A) The employer had expressly consented to the boy's presence
- B) The employee was doing an authorised act (delivering milk) in an unauthorised manner, for the purposes of the employer's business
- C) Employers are always liable for any act of their employees
- D) The boy was also an employee of the employer
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Answer: B) The employee was doing an authorised act (delivering milk) in an unauthorised manner, for the purposes of the employer's business
An employer is vicariously liable for torts committed by an employee in the course of employment. A prohibited act may still be within the course of employment if it is done in furtherance of the employer's business, as in Rose v Plenty where the boy was helping with deliveries. By contrast, in Hilton v Thomas Burton employees on a 'frolic of their own' were outside the course of employment.
Question 11
Under the Employment Rights Act 1996, what is the minimum period of notice that an employee who has been continuously employed for one month or more must give to terminate the contract?
- A) One day
- B) One week
- C) One month
- D) One week for each complete year of service
Show answer & explanation
Answer: B) One week
The statutory minimum notice to be given by an employee with at least one month's continuous employment is one week, regardless of length of service. The employer's statutory minimum notice increases with service: one week for under two years, then one week per complete year up to a maximum of twelve weeks. A contract may provide for longer notice than the statutory minimum.