CIMA BA4 · Chapter 12
Law of employment MCQs with Answers
10 multiple-choice questions on Law of employment for CIMA BA4 Fundamentals of Ethics, Corporate Governance and Business Law. Try each one before revealing the answer and explanation.
Practise this chapter interactivelyQuestion 1
Under English law, which of the following is an implied duty owed by an employee to an employer?
- A) To obey reasonable and lawful orders
- B) To provide the employer with a safe system of work
- C) To pay the employer's taxes
- D) To provide a reference for other employees
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Answer: A) To obey reasonable and lawful orders
Implied duties of employees include obeying reasonable and lawful orders, exercising reasonable care and skill, and acting in good faith (fidelity). Providing a safe system of work is a duty owed by the employer. Tax and references are not implied employee duties.
Question 2
Under English law, which of the following is an implied common law duty of an employer?
- A) To provide employees with a pension in every case
- B) To give every employee an annual pay rise
- C) To take reasonable care for the health and safety of employees
- D) To guarantee employment for life
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Answer: C) To take reasonable care for the health and safety of employees
Employers have implied duties to pay agreed wages, take reasonable care for employees' safety (competent staff, safe equipment, safe premises and safe system of work), and maintain mutual trust and confidence. Pensions, pay rises and lifetime employment are not implied by common law.
Question 3
What is the main legal basis of a claim for wrongful dismissal under English law?
- A) Breach of statutory rights under unfair dismissal legislation
- B) The tort of negligence
- C) Criminal law
- D) Breach of the contract of employment, typically dismissal without proper notice
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Answer: D) Breach of the contract of employment, typically dismissal without proper notice
Wrongful dismissal is a common law claim for breach of contract, usually where the employer dismisses without giving the notice required by the contract or statute. Unfair dismissal is a separate statutory claim focusing on the reason for and fairness of the dismissal.
Question 4
Under English law, which test is used to decide whether a person is an employee or an independent contractor, looking at all aspects of the relationship together?
- A) The postal rule
- B) The multiple (economic reality) test
- C) The but-for test
- D) The reasonable person test
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Answer: B) The multiple (economic reality) test
Courts use the multiple or economic reality test (Ready Mixed Concrete v Minister of Pensions), considering control, mutuality of obligation, whether the person provides their own equipment, bears financial risk, can delegate work, and how they are paid and taxed. No single factor is decisive. The control and integration tests are earlier, narrower tests.
Question 5
Under English law, which of the following is NOT a potentially fair reason for dismissal under the Employment Rights Act 1996?
- A) The employee's membership of a trade union
- B) The employee's conduct
- C) Redundancy
- D) The employee's capability or qualifications
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Answer: A) The employee's membership of a trade union
Under section 98 of the Employment Rights Act 1996, the potentially fair reasons are capability or qualifications, conduct, redundancy, contravention of a statutory duty or restriction, and some other substantial reason. Dismissal because of trade union membership or activities is automatically unfair (Trade Union and Labour Relations (Consolidation) Act 1992, s152). Even with a fair reason, the employer must act reasonably and follow a fair procedure.
Question 6
Under English law, an employee resigns because the employer, without consent, cuts her pay by 30%. Which claim is she most likely to bring?
- A) Redundancy
- B) Frustration of contract
- C) Constructive dismissal
- D) Breach of the duty of fidelity
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Answer: C) Constructive dismissal
Constructive dismissal occurs where the employer commits a repudiatory breach of a fundamental term and the employee resigns in response (Western Excavating v Sharp). A significant unilateral pay cut is such a breach. The resignation is treated as a dismissal, which may then be unfair.
Question 7
Under English law, which of the following is the correct definition of redundancy?
- A) Dismissal wholly or mainly because the employer ceases business, or the need for employees to do work of a particular kind has ceased or diminished
- B) Dismissal because of the employee's poor performance
- C) Dismissal because of the employee's misconduct
- D) Any dismissal where the employee is paid in lieu of notice
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Answer: A) Dismissal wholly or mainly because the employer ceases business, or the need for employees to do work of a particular kind has ceased or diminished
Under section 139 of the Employment Rights Act 1996, redundancy arises where the employer has ceased, or intends to cease, carrying on the business or the business in the place where the employee was employed, or where the need for employees to carry out work of a particular kind has ceased or diminished. Performance and conduct are separate reasons for dismissal.
Question 8
Under English law, an employee has been continuously employed by the same employer for 7 complete years. What is the minimum statutory notice the employer must give to terminate the contract, assuming the contract does not provide for longer?
- A) 1 week
- B) 7 weeks
- C) 12 weeks
- D) 1 month
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Answer: B) 7 weeks
Under section 86 of the Employment Rights Act 1996, an employer must give an employee with between one month and two years' continuous service at least one week's notice, and after two years one week for each complete year of service, up to a maximum of 12 weeks. For 7 complete years: 7 x 1 week = 7 weeks, which is below the 12-week cap. A longer contractual notice period would prevail.
Question 9
Under English law, which of the following remedies for unfair dismissal involves the employer re-employing the employee in a different but comparable job?
- A) Reinstatement
- B) Basic award
- C) Re-engagement
- D) Specific performance
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Answer: C) Re-engagement
Reinstatement means returning the employee to the same job as if never dismissed. Re-engagement means re-employment with the employer, an associated employer or a successor in comparable or suitable employment. Compensation consists of a basic award and a compensatory award. Specific performance is not ordered for employment contracts.
Question 10
Under English law, an employer, without good reason, humiliates an employee publicly and repeatedly undermines her authority. Which implied term is most likely to be breached?
- A) The duty of fidelity
- B) The duty to obey lawful orders
- C) The duty to exercise reasonable care and skill in performing work
- D) The duty to maintain mutual trust and confidence
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Answer: D) The duty to maintain mutual trust and confidence
Employers must not, without reasonable and proper cause, conduct themselves in a manner likely to destroy or seriously damage the relationship of trust and confidence (Malik v BCCI). Serious breach can justify resignation and a constructive dismissal claim. Fidelity, obedience and care and skill are duties owed by employees.