Employment

Through this search we are able to identify & analyze the factors through which small construction companies can gain competitive advantage over their close competitors. Also studied various Project Management techniques that can foster growth of small and developing companies in this sector. This report also identifies the upcoming opportunities that the small and budding companies have in the construction industry. Lastly, it also talks about the key hindrances faced by Indian construction companies in running their operations with suggestions to overcome them. Introduction The Construction industry of India is an important indicator of the placement as it creates investment opportune ties across various related sectors. The construction industry contributed an estimated RSI. 7,807 billion to the national GAP in 2013-14 which amounted to around 9%. The industry is fragmented, with a handful of major companies involved in the construction activities across all segments. Besides, there are medium sized companies specializing in niche activities and small and medium contractors who work on the subcontractor basis and carry out the work in the field.

In 2011 there were slightly over 500 construction equipment manufacturing companies in al of India The sector is labor intensive and provides employment, including indirect jobs, to more than 3. 5 core people. The period from 1950 to mid 1 ass’s witnessed the government playing an active role in the development of these services and most of construction activities during this period were carried out by State owned enterprises and supported by government departments. In the first five-year plan, construction of civil works was allotted nearly 50 % of the total capital outlay.

The first professional consultancy company, National Industrial Development Corporation (MIND), was set up in the public sector in 1954. Subsequently, many architectural, design engineering and construction companies were set up in the public sector such as Indian Railways Construction Limited (RECON), National Buildings Construction Corporation (NBC), Rail India Transportation and Engineering Services (RITES), Engineers India Limited (ELL) etc. As well as the private sector such as M N ADSTAR and Co. , Hindustan Construction Company (HOC), Nasals etc.

In India Construction has accounted for around 40 per cent of the development investment during the past 50 years. Around 16 per cent of the nation’s working population depends on construction for its livelihood and rates assets worth over 200 billion per annum. Total capital expenditure of state and central government was approximately RSI. 8,021 billion in 2011-12 which rose from RSI. L ,436 billion in 1999-2000. The share of the Indian construction sector in total gross capital formation (GIF) came down from 60 per cent in 1970-71 to 34 per cent in 1990-91.

Thereafter, it increased to 48 per cent in 1993-94 and stood at 44 per cent in 1999-2000. In the 21st century, there has been an increase in the share of the construction sector in GAP and capital formation. The main reason for this is the increasing emphasis on involving the private sector infrastructure development through public private partnerships (Peps) and mechanisms like build-operate-transfer (BOOT). LITERATURE REVIEW Introduction to the Indian Construction Industry The Construction Industry in India is the second largest employer of the country after agriculture, accounting for 1 1 % of Indian’s GAP.

It employs more than 3. 5 scores people & its total market size is estimated at RSI. scores. The level Of a country’s development is reflected by its infrastructure & the desperate need for infrastructure development has increased the demand of the construction industry in India. The Indian Construction industry can be divided into three broad segments: Residential, Industrial, Commercial & other buildings. Sewer, Roads, Highways, Bridges, Tunnels & other projects. Specialized activity such as carpentry, painting, plumbing & electrical work.

Characteristics of the Indian Construction Industry Construction industry is a major job creator: The construction industry accounts for 1 1 % of Indian’s gross domestic product (GAP). The industry also generates huge employment opportunities, due to its constant requirement for skilled and unskilled laborers. Moreover, the overall growth of this industry is also positive for sectors such as steel and cement, which are key raw materials. Low entry barriers keep industry fragmented: The construction industry is highly fragmented as low fixed capital requirements for construction contracts remove entry barriers.

Capital expenditure is only required for procuring necessary equipments unlike a manufacturing businesses, which require a setup of plants and machinery for production. Possibility of payment delays heightens working capital intensity: Construction projects are mainly funded and managed by the owner. Apart from the initial advance, contractors receive payments after each project lessons is completed. However, timely payments also depend on the owner’s credit profile and the nature of the project.

Most projects, especially infrastructure, have a gestation period of more than a year. Any delay in payments can push up receivables. Such a scenario makes the construction industry working capital intensive. Projects awarded to lowest bidders, but execution skills crucial too: All governmental construction projects are awarded through a competitive bidding process as more domestic and international contractors have forayed into various infrastructure segments. The project is finally awarded to the sweets bidder.

However, besides bidding qualifications, contractors also need to have strong project execution and technical skills to avoid cost and time overruns. To make these imperative, institutions such as National Highways Authority of India (NOAH) penalizes delayed execution of national highway projects, while awarding timely completion of the same. Input-related risks: Access to inputs is crucial for ensuring timely and cost- effective execution of projects. The major inputs for a construction include: 1 . Labor: Construction work involves both skilled and unskilled labor.

Currently, instruction players are struggling with wage increases, which can be attributed to labor shortages and rising inflation. Local job opportunities from government welfare schemes, growth in the overall rural economy and migration of laborers to Gulf countries for better prospects are some reasons that have led to a shortage of construction laborers. To solve labor issues, improve quality and cut wage costs, construction companies are now increasing the extent of mechanization, particularly in huge infrastructure projects such as highway projects. . Raw material: The construction industry is raw material-intensive. Any change in prices of raw materials like steel, cement, bitumen etc. Impacts players’ profitability. However, the impact is limited to the extent of the proportion of fixed price contracts in a company’s order book. Some construction companies also own quarries so as to ensure constant raw material supply. 3. Land acquisition and government clearances: Land and the related government clearances are the other important inputs for construction work.

Delays in these may increase the gestation period of projects, which can impact the profitability of the project. Recent developments in the Indian Construction Industry The Indian government has recently initiated some policy changes in some sectors of the industry and order inflows have improved in some others. Though, the strained financial position Of companies will continue to impact the industry’s execution pace in 2014-15. It is therefore expected that the industry’s revenues will grow at a tepid pace of 6% to 8% during the year.

The poor financial position of construction companies is reflected in their poorly profitable and highly leveraged balance sheets. Operating margins of construction companies fell by about in 2012-13, as input costs rose ND lower margin segments such as road projects gained share in the order book. Competitive pressures have also been impacting margins. Slow execution and its impact on fixed cost of companies shaved off 5% to on an average, from the operating margins of companies in 2013-14.

In order to protect their margins, players are now exercising more caution in bidding and competition in the industry has moderated. Yet, the hangover of aggressive bidding of the past and the current execution delays continue to weigh on profitability in 2014-15 also. Further, the gearing (Debt-Equity ratio) f construction companies has been rising over the past two years, impacting the financial flexibility of companies. Gearing of major construction companies rose to 3. 3 times in 2012-13, from 2. 1 times in 2008-09.

Net margins, which had been sliding since 2010-11, fell further by 7% in 2012-13 owing to higher interest outgo. The industry (with the only exception of L&T) reported net losses from April 2013 to October 2013. According to the twelfth five year plan, more than 40% of the total government spends have been allocated to construction per SE explicitly, along with various construction projects that will be undertaken for other areas of expenditure. The table below illustrates the sector wise investments for the twelfth five year plan.

Five Forces Analysis of the Indian Construction Industry Us mammary: The construction and engineering industry is characterized by large incumbents operating alongside smaller companies. Rivalry is eased somewhat by companies diversifying operations into other sectors. There are a small numbers of buyers in this industry, and typically large in size. Similarly suppliers have a great deal of power over market players as their raw materials are essential for players’ businesses. However suppliers have also offered the effects of the global economic crisis, seeing the prices of many raw materials rise.

There are few, if any, substitutes available in this industry. Bargaining power of Buyers: Buyers in this industry tend to be large and few in number. Typically the main buyers are government agencies or large private-sector customers, usually corporate rather than individuals. Generally, in this industry, customers invite market players to tender for contracts which are on the customers’ terms. This means the buyer is in a more powerful position as they specifically define the parameters of the project.

Indus Motor Company (IMC) is a joint venture between the House of Habib , Toyota Motor Corporation Japan (TMC) , and Toyota Tsusho Corporation Japan (TTC) for assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. vehicles in Pakistan through its dealership network. The company was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. The shares of company are quoted on the stock exchanges of Pakistan.

Toyota Motor Corporation and Toyota Tsusho Corporation have 25 % stake in the company equity. The majority shareholder is the House of Habib. IMC’s production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area measuring over 105 acres. Indus Motor company’s plant is the only manufacturing site in the world where both Toyota and Daihatsu brands are being manufactured. Heavy investment was made to build its production facilities based on state of art technologies. To ensure highest level of productivity world-renowned Toyota Production Systems are implemented.

IMC’s Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota Hilux Single Cabin 4×2 and 4 versions of Daihatsu Cuore. We also have a wide range of imported vehicles. Corporate Profile| | Our Profile Indus Motor Company Private Limited, (trade name, Indus Motors) is the top ranking Maruti Dealer in India. The Company having its registered office at Indus House, Chakorathukulam, Calicut and Corporate Office at Thevara, Kochi was incorporated on 11th July, 1984. The business life of the company is started by starting their Ist Dealership in Calicut in the year 1986.

The sale of Maruti vehicle is soundly boosted by marketing intelligence of the Indus Motors. Indus maintains the No. 1 dealer position continuously for the last five years. Based on the recent business reports, the company delivers one Maruti Car in every 13 minutes. The company will assist the customer from the time of choosing vehicle model, colour, finding the best finance option that suits them. They will constantly keep the customer update about their vehicle status until the delivery of the Vehicle is done.

In case of servicing of vehicles, the company is at their service, with options of collecting vehicle from doorstep and once the works over deliver it back to the customer. They have Maruti on Road Service in case customer’s vehicle gets breakdown on the way. Their Maruti skilled technicians will come to the location where and rectify the problem or if it is a major work that has to be attended at the workshop the vehicle will be towed to the nearest Service Station. Our Vision Transform Indus into World Class Dealership Forever No. 1 in India.

Delighted customers and Delighted Employees Our Mission

We will pursue the development of our financial and human resources through diversified business activities, in an ethical and socially responsible manner and in pace with the advancements of the day. We will uphold a professional code of conduct in the pursuit of our goals and are committed to taking up social responsibilities as a corporate citizen by dedicating a significant share of our productive surpluses for espousing social causes that would benefit our employees, their families and the society at large

Indus Motor Company (IMC) is a joint venture between the House of Habib,Toyota Motor Corporation Japan (TMC) , and Toyota Tsusho Corporation Japan (TTC) for assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. vehicles in Pakistan through its dealership network. The company was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. The shares of company are quoted on the stock exchanges of Pakistan.

Toyota Motor Corporation and Toyota Tsusho Corporation have 25 % stake in the company equity. The majority shareholder is the House of Habib. IMC’s production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area measuring over 105 acres. Indus Motor Company’s plant is the only manufacturing site in the world where both Toyota and Daihatsu brands are being manufactured. Heavy investment was made to build its production facilities based on state of art technologies. To ensure highest level of productivity world-renowned Toyota Production Systems are implemented.

IMC’s Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota Hilux Single Cabin 4×2 and 4 versions of Daihatsu Cuore. We also have a wide range of imported vehicles.

Vision and Mission IMC’s

Vision is to be the most respected and successful enterprise, delighting customers with a wide range of products and solutions in the automobile industry with the best people and the best technology”.

• The most respected.
• The most successful.
• Delighting customers.
• Wide range of products.
• The best people.
• The best technology.

Mission of Toyota is to provide safe & sound journey. Toyota is developing various new technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world.

Present Performance

Currently the company is performing well in automobile sector of country. Its sales for the year 2003-2004 is 29,565 units. It has captured the largest automobile market share in the country. It is greatly contributing in human resource development by training and other such activities.

The demand for its products is more than the company’s capacity. Its has certain advantages upon its competitors like largest market share, customers’ liking of its products more than its competitors. The company is continues to maintain a strong commitment towards its Human Resource. To enhance Consumer Satisfaction, extensive training programs were held during the year. Company continuously arrange service campaigns in the cities where its dealerships are present to provide quality service to customers and collect their complaints, suggestions and comments about company. The company also checks its dealerships continuously for not only maintaining but enhances its standards to give to customers maximum satisfaction.

Future Outlook

With the growth of the economy, political stability and availability of car financing, our automobile market has immense potential. According to some estimates, including that of the Pakistan Automobile Manufacturers Association (PAMA), the demand for passenger cars and light commercial vehicles could grow from 115,000 units to 160,000 units by 2006. nvestment by the industry could double to Rs 98 billion, employment could grow up from 170,500 to 290,000, and the industry’s contribution to the national exchequer could jump from the current Rs. 51. 50 billion to Rs. 121 billion. However, for the automobile sector to realize this potential, it needs a clear, consistent and longterm government policy so that automobile manufacturers and vendors, specially our foreign partners, feel confident of making long term investment for future expansion.

The status of our localization program in the post TRIMS era is still unclear even though the Government has applied for an expansion of TRIMS applicability for another two years (up to December 2005). The world is becoming more and more open. We can learn from other countries e. g. India and Thiland, who have adopted policies that not only assist indigenous manufacturing but also make their manufacturing internationally competitive.

Management Policies

Management as a team at Indus Motor Company is committed to comply with the requirements of our Integrated Management System and to endeavor to continuously improve upon it in order to:

Manufacture high Quality Products. Generate Customer Satisfaction. Provide Service to the Society. Maintain Market Leadership. Identify and avoid/mitigate those environmental aspects which have negative environmental impacts. Comply with all applicable legal, regulatory and other requirements related to Environment, Health and Safety. Design and maintain facilities, establish systems, provide training and conduct operations in a manner that safeguard people and property.

Identify, evaluate & mitigate health risks related to our operations that potentially affect our employees, contractors and the public. MANUFACTURING FACILITIES Just in Time spirit implies two opposing forces of providing fast and flexible response to customers, yet building efficient mechanisms and systems that are efficient and waste-free. The concept is to provide the right product and information, at the right time, in the right amount, in the right manner, while maintaining high standards of efficiency and cost control.

 Strengths:

1. Qualified and well trained staff
2. Biggest sale network
3. Best production plant in the world
4. Financial Strong
5. Biggest market share
6. People Trusted Products
7. High Quality Products
8. ISO Certified
9. Resale value
10. Customer Care
11. Customized products
12. Brand Image
13. Availability of Spare parts
14. Best delivery system (Transportations)

Weaknesses

• High Price of Products
• Political instability
• Low per capita income of public
• Less overhead rates of competitors
• Increasing Prices of Oil Rising inflation Opportunities
• Industry expansion
• Technology upgrading

Strong Position

1. Market Integration opening up
2. Opportunity growing in other countries
3. Newly developed Areas/Markets (e. g. Gawader)
4. Favorable govt. policies
5. Big Market
6. Economy is expanding

Threats

1. Chinese cheaper products challenge
2. Free Trade & WTO
3. Strong competition from competitors in near future
4. Instability of Government
5. High rate of Taxation
6. Bad infrastructure

Organization Hierarchey

The above chart shows the centralization in the industry. The main decision comes from the Chairman of the company while Board of Directors approves his decisions and this implement in organization by respective committees. The Board of directors is committed to good corporate governance. The company is managed and supervised responsibly and proper internal controls and risk management policy. Its procedures are in place for efficient and effective operations of the company, safeguarding of assets of the company. This is compliance with laws and regulations and proper financial reporting in accordance with International Financial Reporting standards.

Rising petrol prices

1. When and how did the cost of petrol start to rise?
2. Are there anybody else who is involved other than the drivers of motor vehicles?
3. Can we overcome the rising costs of petrol?
4. Are there any advantages of the rising of petrol costs at all?
5. How does the rising costs of petrol affect the Demand, Supply, Employment and Income section of the cycle? Petrol prices have been continually soaring throughout the decades with GST (goods and service tax), the level of demand, the gulf war and the fact that we are running out of it being the main factors.

In some cases the level and extent of competition of petrol companies in a particular location may also be a factor. Motor Vehicle drivers aren’t the only ones who’s suffering from expensive petrol, Aviation companies are also effected, recent surveys have shown that 28% of aviation companies prefer going for a more direct routing to their destinations, 40% found flying at slower speeds to save petrol, 19% cut back on hours flown, 15% started tankering fuel (getting it while it is at a lower price to save money).

We certainly cannot overcome the rising of petrol prices but people in Australia and around the world are trying to help by changing their driving habits, using public transport more often and coming up new ways to make cars more fuel efficient. It is quite obvious what the disadvantages are when it comes to talking about the rising costs of petrol but when it comes to advantages I think that people are starting to cut back on shopping sprees, dinner dates and night outs because they want to save money and use it for petrol.

There are also fewer teens on the roads because most of them obviously can’t afford petrol when the prices are this high which means that there are less drunk road accidents. A lot of people are also losing weight as a result of using bicycles to save petrol. -A lot of people in the world want oil all at the same time. Oil reserves are running low on Fuel. (Oil supply do not meet demand expectations) They do not make as much money Employment stays the same DEMAND (goes up) Supply Employment Income

ABSTRACT

With the competitive business environment  today, many firms render to minimize their costs of business operation especially in terms of staff expenses in order to maximizer profit. Therefore work place is critical to many employers to the extend that employers uses genetic testing to ascertain genetic characteristics and deficiencies of their employees in many firms today.

However the unfolding event of the  Burlington Northern Santa Fe Railway company settlement to compensate its 36 employees whom it tested without their consent gives a new awakening to examine whether it was fare to settle at $2.2 million as compensation. This dissertation shall look at the circumstances surrounding the settlement of the law suit prior to trial, in relation to different position of the various stakeholders pertaining the lawsuit.

In the business world today there are a number of problems arising from organizational which professionals in the business need to handle ethically (Brian, 2005, p. 92) .  Business ethics involves examining these  emerging problems in the business environment such as, fiduciary responsibility, cooperate governance and cooperate social re responsibilities (CSR) that encompasses shareholders relations, human resource management issues, discrimination at work place.

In this case of  Burlington Northern Railway company that surrounds genetic testing of its employees without their consent, CSR relevant because it deals with ethical duties and rights that exist between the company and society (Brian, 2005, p. 16).

Organizations should take into consideration the societal interests in its operation impacts on the community of shareholders, suppliers, customers and employees. The organization obligation is more to statutory obligation to comply with the law regarding social responsibilities but take extra steps in to improve the life of employees and their families, local community and society at large where they are located. This give the role the organization should play in the in social welfare of the society. 

Equal Employment Opportunity Commission settled the case of Northern Burlington and Santa Fe Railway Company. That ruled 36 workmen who were unknowingly were involved in a genetic test without their knowledge and consent by the company,  shall be given $2.2 million as compensation in  2002. The outstanding question remains to be,  what wrong did the NBFR  do to be penalized as such (Brian, 2005, p. 52) . In fact the NBFR denied wrong doing nor EEOC did not determine   if  the act was illegal in its settlement. NBFR admitted to have conducted undisclosed  genetic test to their employees together with comprehensive  medical check up after they filed a complaint on the CTS ( carpal tunnel syndrome ) which was resulting from working conditions of the firm (Brian, 2005, p. 123) .

The firm wanted to pilot DNA test to establish the existence of  CTS amongst its employees so that it can be a fair beginning for looking  into the claims by  their employees which they filed against them regarding carpal tunnel syndrome that resulted from firm activities. The  shocking aspect is that the settlement was done before trial in a court of law and therefore the question  whether the settlement war justified or not, relied extensively on those circumstances.

The major  circumstance surrounding the settlement was the fact that during summer that year 2002 democratic legislators together with senator tom Daschle had purpose to co-sponsor Genetic Nondiscrimination in Health Insurance and Employment Act. This bill had provision to bar Insurance companies from using  genetic testing information to make decisions on medical coverage policies and premiums determination for their clients. The bill would also prevent employers from using DNA tests to make decision as salary and wages determination,  staff recruitment and promotion declaration.

In  addition the bill provided for victims of genetic testing discrimination to sue their employer  for uncapped damages that are caused by the insurance company or employer (Brian, 2005, p. 236) . The contradiction came in from the opposing force from the republican legislators, health insurance associations of America and employers organization. Secondly was by virtue of the EEOC handling the NBFR case as the first one contributed to the kind of settlement arrived at (Brian, 2005, p. 87) . Despite of these circumstances the justification of the act towards the employees and settlement reached is in doubt.

Legally there are many avenues for the victims of  genetic testing discrimination in United States which ranges from the ADA (The Americans with Disability Act.) which is the expansion of the Civil Right Act  1964, fourth amendments constitutional prohibiting on illegal search and seizures, tittle vii of the civil right act and individual state legislation prohibiting discrimination in the work place on the basis of  results of genetic testing. However within law there are loop holes that did not adequately give the directions to address the suit properly.

Because policy framework of ADA  focuses on persons with disabilities being safeguarded against discrimination based on gene testing from employer, but does not explicitly address the genetic testing problem rather aims at protecting disabled. Secondly is the scope of its definition of the disabled person being an individual who is mentally or physically impaired that this impairment limits some life activities (Brian, 2005, p. 271).

Therefore the court at Norman- Bloodsaw in oder to arrive at a settlement NBFR classified railway case victims under the definition of ADA (Brian, 2005, p. 193) . ADA does also provide for the business to maintain viable transaction through permitting the business to perform medical examination to its employees that is work related and consistent with business necessity. The railway can base their justification to conducting the DNA test out of business necessity.

The basis of the court settlement stated that railway performed undisclosed for the rare  condition which is unrelated to the the work. But NBFR can argue that it performed specific conditions that affects  the  nature of railway work work, which is the CTS, a musculoskeletal disorder that causes pain and numbness in the hand. While consent of the employees was carted for, from their actions which constituted  permission since they filed complain to the railway as their employer and workers organization (Brian, 2005, p. 69).

However scientists disagree to as whether the genetic test which was conducted could give accurate result despite trying to establish an extremely rare conditions. Additionally the DNA tests do not in any way predict the future health of an individual, therefore test is rendered unnecessary and violation of employees right by scientists critics.

The  other side of the argument could be the significant of  genetic test to the railway company as need to protect itself from the possible tort liability in insurance transactions under the theory of employer negligence therefore likely to face responsibility in respect to third party. The worker cover policy purchased by railway may back fire to the company if it did not have adequate data in insuring its workers. Secondly the railway company might have feared its workers compensation programs are not  fully addressing genetic predispositions that may leave NBFR  liable to its employees (Brian, 2005, p. 245).

The reasons however can provide the NBFR with the ground upon which its argument can rest, but like any other businesses its aim is to maximize profit and minimize losses through price containment. Therefore this tests would help to manage human resources well, to cut down costs that are arising from  workers compensation and put up with federal regulatory legislation like OSHA that demand work place safety (Brian, 2005, p. 81).

In conclusion the issues a round the settlement of NBFR was settled unfavorably prior to trial to the railway company as it was costly. But the issue is lack of federal prohibition to use of genetic information by the employer. Secondly there was no evidence by EEOC  to prove that Burlington Northern Santa Fe Railway company used the test to discriminate against any employee at work and in any way NBFR did not violet ADA law.

In addition employer need to cut down losses that arises from workers absent ism, high insurance costs and retraining workers costs to replace those that have ultimately left the railway company. Basing on a moral  perspective the railway company had no right whatsoever to take a DNA test of its employees without their consent because each individuals privacy should be respected and protected. Therefore there is need to balance the competing interests in the society which comes from the egoistic nature of human beings that makes people strive to satisfy  there own interests, but balance should come in to have regulation that benefits employer and his employee.

REFFERENCE

 Solomon B., (2005)  Burlington Northern Santa Fe Railway;Minneapolis,MBI publishing company

The reforms aimed at the eradication of poverty and unemployment challenges through substantial recovery and improvement or productivity of investment economizing the private sector as the main engine of growth. In discussing the issues of the liberalizing of cooperative policies practices and legislation its clear that the societies have both successes and failures.

Successes of the liberalizing of cooperatives up to date To the cooperative movement, liberalizing measures were put in place with a view to create commercially autonomous member-based cooperatives that would be democratically and professionally managed; self-controlled; and self-reliant. To this effect in 1997 government published Session Paper No. 6 of 1997 on “Co-operatives n a Liberalized Economic Environment” to provide the new policy framework for the necessary reforms.

To date the role of the government was redefined from control to regulatory and facilitative in nature. The Ministry of Co-operative Development duties were confined to registration and liquidation of co-operative societies; enforcement of the Co-operative Societies Act; formulation of co-operative policy; advisory and creation of conducive environment for co-operative growth and development; registration of co-operative audits; and carrying out of inquiries, investigations and inspections which is still applicable today.

Successfully also was the enforcement of co-operative principles of voluntary and open Membership; democratic member control; member-economic participation; autonomy and independence; education, training and information; co-operation among cooperatives; and concern for community. The reforms have given autonomy to individuals will to Join or leave the cooperatives, which is still effectively being practiced, up to date. The 1966 Co- operative Societies Act was repealed and replaced by the Co-operative Societies Act, No. 2 of 1997 the new Co-operative Societies Act served to reduced government involvement in the day-to-day management of co-operatives. Cooperatives were granted authority to rule over themselves from the previous state controls by transferring the management duties in co-operatives from the Commissioner for Co- operative Development to the members through their duly elected management committees. This trend is still applicable up to date where by members have the discretion to make policies through Coco’s that benefit them. Co-operatives were no longer required to seek the permission of the Commissioner to invest, spend or borrow.

They were now free to borrow against part or the whole of their properties if heir by-laws allowed, provided the annual general meeting approved such borrowing which is still applicable today. The reforms have also given cooperatives the power to hire and fire grade staff without the commissioners consent. The cooperative movement as a result of liberalizing has seen a growth in the cooperative movement with a growth in 2004 of 10,642 cooperatives in Kenya and currently the number is increasing rapidly with the inception of other better laws such as the new constitution.

Despite the reducing trend of membership surprisingly there’s an increase in member registration in Coco’s over the years up to date new CACAOS are being formed even among the self-employed persons in the informal AU Kali) and agricultural sectors, which is a complete departure from the past where these co-operatives were only formed among the employed persons in the urban areas.

To this extent, it can be said that liberation has transformed the cooperative movement and that many citizens are appreciative of it. Liberalizing of the cooperative movement has transformed the structural organization of cooperatives. The inefficient cooperative unions are increasingly loosing their members, for cooperative societies now have the freedom to seek better service provision from there organizations or make provision for such services on their own.

Another advantage is that Agricultural co-operative unions have particularly been affected through monopoly. For instance, in the dairy sub-sector, co-operative societies were affiliated to the Kenya Cooperative Creameries (KC) that monopolized the processing and marketing of milk up to the early sass’s. It is in these circumstances that some of them like Guthrie and Lemur dairy co-operative societies have put up their own milk processing plants that are still running up to date.

With this, vertical integration f cooperatives in the dairy sector has virtually collapsed as cooperative societies now have the freedom to sell their produce to any willing buyer rather than KC and some of the societies have put up their own milk processing plants to offer the services previously provided by KC. Despite all that, non-agricultural co-operative unions have remained vibrant, particularly those in the financial sector, and have subsequently maintained the vertical structure of the cooperative movement.

For example, to date Kenya Union of Savings and Credit Cooperative (COUSCOUS) brings gather over 2,600 active COCO societies with a membership of over two million while the Kenya Rural Savings and Credit Cooperative Societies Union KEIRETSU has 45 active rural COCO societies with a membership of 1. 5 million. These unions serve as the mouthpieces of the respective CACAOS in the country; a feat that has helped the unions continue to attract rather than loose membership.

COUSCOUS also provides common shared services like education and training; business development, consultancy and research; risk management; and the inter-lending program for CACAOS called Central Finance Program. These services have attracted CACAOS to main loyal members of COUSCOUS, and helping it attain the status of the largest COCO movement in Sub-Sahara Africa. Successfully with the current liberalizing of cooperatives most of the cooperative organizations are functioning without reference to the apex organization.

The role of spokesperson and representative of the cooperative movement is increasingly being played by national cooperative organizations and cooperative unions. As an example, COUSCOUS being the mother of all Coco’s now stands out as the mouth-piece and advocate of CACAOS in all matters that affect the development and growth of these cooperatives. COUSCOUS has been vibrant in the recent past by being vocal, in opposing the retrenchment of employee’s as that would affect the membership of Cacaos.

Even more significantly, COUSCOUS was recently involved in the formulation of the yet to be debated and enacted COCO Act that sets out to make special provisions for the registration and licensing of Cacaos, prudential requirements, standard forms of accounts, co-operate governance, amalgamations, divisions and liquidations; establishment of a COCO Regulatory Authority, savings protection insurance, and setting up a Central Liquidity Fund, among others. In the circumstances, the collapse of the vertical organization of the cooperative movement in the country is increasingly becoming evident.

Another success of the liberalizing is that with liberalizing of the economy, banks such as The Cooperative Bank of Kenya have opened shareholding to individual members of co-operative societies as was duly recommended by their societies in 1996. The bank has however, retained its association with the co-operative movement by restricting 70% of the shares to co-operatives while individual members of societies hold only 30% of the shares and are not entitled to attend the annual general meeting of the ann.. This has helped to keep out private shareholders who might have bought out the bank as has been the case in other African countries.

The coming of this policy framework also saw the International Cooperative Alliance’s (CA) cooperative principles of voluntary and open membership, democratic member control; member- economic participation, autonomy and independence, education, training, cooperation among cooperatives; and concern for community became formally incorporated in the cooperative policy. The 1997 policy failed to provide for the separation of the responsibilities of elected management committees from managerial staff responsibilities.

Consequently, management decisions were still made by elected leaders that may not be qualified managers. In such response to the inadequacies of the 1997 policy, the Ministry formulated a revised policy framework titled “Kenya Cooperative Development Policy 2008”. The 2008 policy themed at ‘expanding the economic space for sustainable cooperative growth in Kenya’, focused on restructuring, strengthening and transforming cooperatives into vibrant economic entities that can confront the challenges of wealth creation, employment creation and poverty reduction as private business ventures.

To date the policy is still up and running. After the fall of Kenya National Federation of Cooperatives KNIFE, the interim Board started developing the strategy in 2007 by holding provincial consultative meetings that focused on how to revive the organization. This culminated in the National Cooperative Leaders Conference in November in 2007, which endorsed a new governance structure, revised By-Laws (2008) and a new funding strategy.

The revised By-Laws (Kenya National Federation of Cooperatives, Bibb) proposed a governance structure consisting of a secretariat composed of the Executive Director ND four heads of sections; a technical committee comprising of the Chief Executive Officers of Nachos; the General Assembly as the supreme authority consisting of 75 elected delegates; and the National Governing Council as the executive authority comprising of eight Chairmen of Nachos, seven elected regional representatives, the Commissioner for Cooperative Development and the Executive Director.

The By-Laws also address the need for strengthening of the financial capacity of KNIFE, as they propose a graduated scale of annual contribution by members based on the type of cooperative organization and annual turnover. This amends have helped to shape the federation up to date with increased number of people. The revitalization program has charted a new direction for the organization, as it restricted its activities to the core objective for which it was formed. That is, to be the mouth-piece of the cooperative movement in Kenya by engaging in advocacy, lobbying, collaboration and networking activities.

At the end of the revitalization process, the investment in institutional capacity building of KNIFE should has enabled it to address wealth creation and poverty alleviation of the cooperative movement. Liberalizing has rough about growth of banks such as the Cooperative Bank of Kenya. The Bank has not only been instrumental in providing banking services to cooperatives, but has also been the source of affordable credit for the cooperative movement. For instance, today it lends approximately EKES 3. 5 billion (USED $46. Million) annually to Cacaos, in order to increase their liquidity levels so that they can meet member demands for loans associated with school fees. Moreover, the Cooperative Bank still serves as a mechanism through which most donors to the agricultural sector, particularly those that produce coffee, can channel their support. This has allowed the Cooperative Bank to network with many donors, such as Food Aid Organization (FAA), and the European Union, among others. In the financial sector, CACAOS are also increasingly becoming innovative by developing new products to enhance their income.

For instance there’s some diversification of traditional products of savings and credit of Coco’s by introducing Front Surviving liberalizing: the cooperative movement in Kenya Front Office Service Activity (FOSS). FOSS offers services that members can use to process their monthly salary, while having access to instant cash advances (based n their salary) and maintaining withdrawal savings deposits. Currently, slightly over 250 CACAOS operate with this activity in Kenya.

In addition, the COCO movement is quickly spreading from its traditional urban and wage employment strongholds into the agricultural sector in rural areas and informal economy. As a success liberalizing has enabled the setup of free market cooperative entities that have led many people to derive their Jobs from marketing products produced by cooperatives. For instance, dairy cooperatives produce various products such as fresh ilk, ghee, butter and yoghurt; while other agricultural cooperatives market coffee, fish, pyrometer and eggs. These products are then passed on to other entities to market to retailers, wholesalers and consumers.

To date this trend continues and has helped reduce poverty and provide employment as it was the expectation of the 1996 framework policy paper. Liberalizing has made Cooperatives to be sources of income by generating opportunities for many people, particularly members of cooperatives. In 2007, primary cooperatives in the agricultural sector had a membership of 1 approximately 50% of whom were estimated to be active. The CACAOS had 6,286,894 members, 98% whom were active in the lending activities of their cooperatives. The other non-agricultural primary cooperatives had a total membership of 334,000, with approximately 50 per cent active.

These figures are clear pointers to the significant contribution of cooperatives to poverty reduction and poverty prevention in Kenya to date. This is particularly true as most of the income generated from cooperatives is mainly used to address long-term poverty prevention measures. Liberalizing has brought focus on cooperatives to the core activities of operatives, including agribusiness, entrepreneurship, savings and credit advancement regulations, leadership and governance of cooperatives, and the economic benefits of membership in cooperatives, among others.

It is apparent that any cooperative that doesn’t provide Economic gains in Kenya tends to be deserted by the members. This is evidenced by dormancy that cooperatives are currently experiencing. A few activities of such successful cooperative ventures could be viewed as attempts at offering social protection to the members and this has brought the growth in some cooperatives in the country. As an advantage the framework policy has seen transformation of the cooperative movement where benevolent funds have been introduced in most CACAOS to which members contribute regularly and only draw from them when they are bereaved.

The schemes define the relatives in whose death the member would get assistance to meet the burial expenses, as well as the respective amount of money to which he/ she would be entitled. Gracefully the institutionalizing of the framework paper policy and liberalizing has seen the transformation of the Cooperative Insurance Company(ClC). This company has the ore business of giving protection against risks associated with operation of cooperative enterprise, as well as cooperators themselves.

Significant ICC has also developed a micro-finance insurance scheme specifically for covering savings of micro-finance institutions (Miff) in case a person with a loan passes away before completing repayment. Negative aspects of the liberalizing of cooperatives Consequently, the immediate impact on most co-operatives was mainly negative. The elected leaders abused the freedom bestowed on them and to the detriment of many cooperative societies.

Corruption cases; gross mismanagement by officials; theft of operative resources; split of viable co-operatives into small uneconomic units; failure by employers to surrender members’ deposits to co-operatives (particularly Cacaos); failure to hold elections in co-operatives; favoritism in hiring and dismissal of staff; refusal by co-operative officials to vacate office after being duly voted out; conflict of interest among co-operative officials; endless litigation; unauthorized co- operative investments; and illegal payments to the management committees were increasingly reported in many co-operatives and up to date the trend is till continuing though at a reduced scale.

Though there’s a surge of cooperative societies the indication is that up to date there’s recorded numbers of dormant cooperative societies. In 2004, the Kenya Union of Savings and credit cooperatives actually estimated that 42% of the cooperative societies were dormant. The number is still increasing and this isn’t beneficial to the eradication of poverty through employment and innovation. The relative poor performance of agricultural cooperatives could also be attributed to the liberalizing of the co-operative sector without adequately preparing the co-operatives. There’s also the element of over dependence of the agriculture sector, which leads to failure unexpectedly. Liberalizing has brought about immense changes in the cooperative movement.

The Kenya National Federation of Cooperatives was the national apex of cooperative movements in Kenya. Its dominance declined drastically due to corruption and mismanagement reason being that poor management over the years saw KNIFE deviate from its core business into other activities, such as auditing, education and training as well as research and consultancy. Such activities were already being performed by some of its members, and subsequently KNIFE ended up competing with some of its members hat were offering the same services to the cooperative movement. In the circumstances some cooperatives found no reason for being members of a federation that they saw as a competitor.

However its quick revival was established in 2005 after the then minister of cooperatives dissolved Knife’s Board of Directors and replaced it with an interim board (Kenya National Federation of Cooperatives, AAA). Interim Board of Directors that was appointed by the Minister in May 2005 immediately embarked upon developing strategies for reform and restructuring to revivalist the organization (Kenya National Federation of Cooperatives, 2007). As a active impact KNIFE has largely been ineffective in representing the cooperative movement during policy and legal processes. As an example, it failed to effectively participate and influence changes to the 1997 Cooperative Societies Act that produced the Cooperative Societies (Amendment) Act, 2004.

KNIFE started monopolizing donor support after the ACT had been enacted to hold consultations on the implications of the Act, which was too late to achieve any impact. Perhaps this also explains the absence of cooperatives in national development debates. KNIFE has lacked even up to date the urge to influence policy and legislative debates in Kenya, aging it difficult to improve the visibility of the cooperative movement. This is surely a liberalizing downfall a thing that the paper framework couldn’t expect to happen. As a negative effect liberalizing has reduced government support since autonomy was given to the private sector this free market approach has unfortunately brought to the decline of, the number of trainees from Cooperative college of Kenya.

Cooperatives attending the college have been reducing since the liberalizing due to the tremendous reduction in government sponsorship to the cooperative movement for training purposes. Left on their own, most cooperatives, especially in the agricultural sector, have been unable to raise the required fees for their staff to train at the college. CONCLUSION In conclusion, the impact of liberalizing has seen cooperatives survive the market forces and open up more enterprising innovations that secure the welfare of employees. Successfully much legislation has been put in place that is still working up to date and this has helped to attract more members to cooperatives. On the downside corruption is still rampant as the societies grow new schemes are being hatched to hamper the progress of the cooperatives.

Many businesses offer their employees fringe benefits. According to Businessdictionary. com (n. d. ), “Compensation in addition to direct wages or salaries, such as company car, house allowance, medical insurance, paid holidays, pension schemes, subsidized meals. Some fringe benefits are regarded part of a taxable income. ” There are different types of fringe benefits. Every benefit offered falls under one of four different classifications. The first classification is employment security.

Maternity leave, sick time, bereavement, and cost of living adjustments are just of few of the fringe benefits that fall under this area. The next classification is health protection. Under this heading short-term and long-term disability are offered as well as workman’s compensation insurance and life insurance. Another classification is old age and retirement. Just as it sounds this area provides aging individual with deferred income options, old age assistance, and pension plans. The final classification is personnel identification, participation, and stimulation.

Different types of incentive pay are covered under this heading along with many different free or discounted services (Sardhar, n. d. ). Some of the most common fringe benefits that are offered are employment security, retrenchment compensation, layoff compensation, and safety and health. Employee security provides every employee a sense of peace for not only their physical safety but also his or her financial and mental well-being. Retrenchment and layoff compensation are supported by the industrial disputes act of 1947.

In summary, the law states that any employer who employs 50 or more people has to either give employees a full months notice of their job loss or up to 45 days of pay in the case of retrenchment. Layoff compensation is only required at 50 % of their wage up to 45 days. Most safety and health benefits are required and monitored by the Occupational, Safety, and Health Administration (Sardhar, n. d. ). Employers offer fringe benefits for many different reasons. One is to improve relations within their market niche.

Another is to support and improve the morale in the working environment. Understanding the needs of the employees and satisfying the needs that are not can be another reason businesses offer fringe benefits. Companies also choose to offer different types of fringe benefits to provide a quality working environment. Employers also provide security to their working family by protecting them from different social risks. The health and welfare of every employee is also important and another reason fringe benefits are offered.

Turnover can be very costly for any business so maintaining loyal workers is a positive effect of fringe benefits. Probably one of the most evident reason employers provide these benefits to employees is that they are required to by law (Sardhar, n. d. ). References Businessdictionary. com. (n. d. ). Fringe benefit. Retrieved from http://www. businessdictionary. com/definition/fringe-benefit. html Sardhar, M. (n. d. ). Types of fringe benefits. CiteHR. com. Retrieved from http://www. citehr. com/148249-types-fringe-benefits. html

Advise Bob of his contractual obligations to WAY Ltd. In particular, assess and evaluate his common law duties in comparison to contractual obligations as an employee and the potential outcome of breach. A contract of employment may be written or verbal and there is not a lawful duty for an employer to supply the employee with a written contract. However under the Employment Rights Act 1 996 Section 1 (1) a written statement of particulars is required and under Section 1(2) this may be given in installments but not any longer than two months after the employment has started.

Contracts contain terms’ which can either be expressed or implied and it is important for employers to think carefully when creating a contract as it may need to be relied upon in the future should any dispute or ambiguity arise. Daniels (201 2 page 35) defines expressed terms as “terms that have been discussed and agreed between the employer and employee” “they may not be in writing and they cannot diminish statutory rights”. She defines implied terms as “those that have not been specifically agreed between the employer and employee but are derived from collective agreement, statute, custom and practice and the courts”.

Examples of what is considered express terms include the amount of sick, holiday and redundancy pay and the amount of wages or hours expected to be worked. Implied terms are different in that they will be the same for most contracts of employment no matter what the activity is including duties owed to the employee by the employer and vice versa such as the duty to pay etc. Bob should be aware that under common law there are certain duties owed by him as an employee to his employer WAY Ltd.

Emir (2012 page 307) states “Since the relationship between employer and employee is one of trust ND confidence the law implies into the contract of employment the term that every employee should serve his employer faithfully’. In regards to all of the clauses and what Bob is currently doing which is working for a competitor in his spare time he is already breaching one of the first common law duties which is the duty of faithful service, Emir (2012 page 308) states that “It is a breach of the employee’s duty of faithful service to compete with the employer while he is still employed”.

The cases of Adamson v B & L Cleaning Services Ltd (1995) and Ward Evans Financial Services Ltd v Fox (2001 ) are examples of not only a breach of faithful service but also of fidelity which will be discussed further on. Clause one instructs Bob that he is not to devote any time that should be spent in work on any other business or ‘charitable endeavourer unless he has written consent by the company.

This clause set out by WAY Ltd is not reasonable in the way it is worded, as in some cases Bob has a duty to devote his time that should be spent in work to other affairs if it is necessary. One example of this would be jury duty which anyone meeting the specific criteria is obliged to take part in unless there are specific and exceptional resistances, and to enforce that Bob must have it in writing before he is to attend such activities is not reasonable.

If it were found that this clause was unreasonable then the clause may become invalid. However if it was determined to be fair then this case would be similar to Wishes Dairies v Smith (1935) where the legal principle identified was that the duty of fidelity lasts until the employment has ended. Although Bob has not yet breached this duty, he has breached several others relating to this the first one being a duty of mutual trust and confidence.

In the case of Mali v BCC AS (in Liz) 1997) Lord Steen stated “the employer shall not without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee” (Painter and Holmes 2012 page 145). The term ‘mutual’ means ‘joint’ or both in agreement so this statement works both ways in that the employee also has an implied duty not to act in such a way that would upset or cause animosity among employer and employee. Bob has broken this duty by working for a competitor even though it may be in his spare time.

It should also be recognized that although Bob appears to be a senior engineer, if he is having to work for another company in his free time due to the business not doing as well as it has been then he must be on commission or a zero hour contract as if he was on a fixed term or full time contract his pay would remain the same no matter what hours he worked. Clause two states that during the period of his employment Bob should not partake in any other work which may affect the way in which he carries out his own work for WAY Ltd. The modern practice of ‘moonlighting’ whereby an employee undertakes spare-time work outside his employment ours can raise problems, particularly if the work is in competition with the employers business” (Emir 201 2 page 318). The case of Gray v C & P Pembroke Ltd (1972) which is similar to Bob’s situation supports this idea that working for a competitor is not deemed acceptable if it is expressed in the contract otherwise, however Frame v McKenna and Graham Ltd (1974) found that it was acceptable if it not mentioned in the contract of employment.

Cases which would suggest Bob is in breach of his common law duties if followed would be Havoc Ltd V park Royal Scientific Instruments Ltd (1946), Nearby Dean of Westminster (1999), Lewis v Underworld Garages Ltd (1986), Reading v Attorney General (1951 ) and the most recent case of Vegetarian v Churchill Group Ltd (2013). Moonlighting links with the reasoning that a fiduciary duty should exist among employers and employees.

Lord Wolf’s view on fiduciary duty is that “The employer is entitled to the single-minded loyalty of his employee. The employee must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or he benefit of a third party without the informed consent of his employer” (Broodier 2012 page 1).

However there is an argument as to how far this fiduciary relationship goes and it was recognized in the case of University of Nottingham v Tweet (1999) that ambiguous terminology may cause confusion as to the nature of the relationship between employer and employee. Although the common law duties require loyalty, good faith and honesty, to assume that an employee is to give his/her all to their employer and that the contract of employment is a fiduciary one is false. However the case of Helmet Integrated Systems Ltd v Tundra (2006) is a contrast in to the extent of fiduciary duty that is owed.

The cases of Bell v Lever Brow (1931 ) and Osborn Corp. v Reecho (1984) are cases involving a senior member of the team and it is often applied that they have a greater duty owing to the employer to disclose their own misconduct than perhaps an employee would have. In clause two however, the restriction may be considered too wide in that it restricts him from undertaking any work which may prejudicially affect his ability to carry out his work for WAY and says that again it will be at he discretion of the company.

It may be deemed UN-reasonable to consider that the company would need to be informed of every activity carried out in Bob’s spare time and that it would be up to them to make a decision about how prejudicial it is. Painter and Holmes (2012 page 151) state that “The courts are very reluctant to accept that what workers do in their spare time should be of any concern of the employer as in Nova Plastics Ltd v Forget (1982). However, sometimes they are bound to do so. This statement emphasizes that although it is in the interest of the employer to be aware of hat their employees do in their spare time, the clause restricting Bob from carrying out any activity in his spare time unless the company has agreed may be to wide and unreasonable. A duty of fidelity is owed under common law and ensures that “Employees must not carry out activities that clearly conflict with the duty that they owe to their employer” (Daniels 2012 page 44).

The obligation not to compete with an employer can be regarded as an expressed term and included as a restrictive covenant. Although he has already breached this duty by working for a competitor WAY could limit this damage further if there was a restrictive lease in the contract indicating that Bob could not set up a competing business such as the partnership he wishes to indulge himself in with Michael for a certain period of time and within a certain geographical location if it is deemed ‘reasonable’.

Bob’s case is similar to the one of Sanders v parry (1967) backed up by Coleman Dammar Ltd v Sakes (2001 however the cases of Helmet Integrated Systems Ltd v Tundra (2006), Customer Systems Pl v Ransom (2012) and Tim Russ & Co v Robertson (2011) all indicate that it can be difficult to enforce these covenants if they are not deemed reasonable or the employee can prove it was after the course of employment had ended.

Along with a restrictive covenant being inserted to non-compete, if a garden leave clause were also present then it would prevent Bob from competing with WAY by going to another business such as Michaels or prevent him from setting up his own business within a certain amount of time. This clause is often inserted as it can be unclear what the interpretation of the courts will be regarding non restrictive covenants and employers wish to protect themselves from the possibility of employees leaving to work for a competing equines and taking with them knowledge they may have gained from the company.

Garden leave was brought to the attention of the courts in the case of William Hill Organization Ltd Tucker (1998) as if the courts feel the clause is too wide or UN reasonable, it may not be imposed as Simian Ltd v Christensen (2000). Garden leave often arises after the notice of termination of employment has been given either by the employer or employee and does not always have to be expressed in the contract to be effective but it can sometimes be imposed by the courts at a later date as in Christie v Johnston Carmichael (2010) and SO and R Valuation Service co LLC v Boudoirs (2008).

The courts may also decide to modify the clause and not to render it completely inadmissible if they feel it may De-skill the workers if they have too much time off as in Provident Financial Group Pl v Hayward (1988) and GHZ Group Inc v Gallstone (1993), but in certain cases they may uphold the clause if they feel it is fair as in Euro Brokers Ltd v Rabbet (1995) and Evening Company Standard v Henderson (1987). The third clause identifies the common law clause of confidentiality and again utility in which the employee is expected to operate in such a way as not to disclose confidential information about his employer.

The fundamental case for this duty is Faced Chicken Ltd v Fowler (1985) in which the Court of Appeal recognized that there is a difference in duties owed by an employee who works for the company now and an employee who has left and gave several guidelines which indicated what information would be regarded as confidential. Bob would owe a greater duty of confidentiality to WAY at the moment as he is still operating as one of their employees compared to he situation he would be in if he left as the responsibility would be lessened but not diminished.

In the case of Rob v Green (1895) Lord Asher MR. said “l think in a contract of service the Court must imply such a stipulation as I have mentioned (ii, that the servant will act with good faith towards his master), because it is a thing which must necessarily have been in view of both parties when they entered in to the contract” (Smith and Thomas 2008 page 169). The confidentiality clause is important as is protects both the employer and employee from any unnecessary information being disclosed about either party.

If Bob were to disclose information to Michael about Highway’s pricing strategy then he would be breaching his contract terms which may give reason for a fair dismissal or if he discloses it once he has left the company whether it be to Michael or anyone else then an injunction may be granted stopping him from disclosing the information. If it can be proved that the employee or ex employee has passed on confidential information and that the business has suffered a loss as a result as in Sanders v Parry (1967) and Ansell Rubber Co v Allied Rubber Industries (1 972), then damages may be awarded to the employer.

When deciding the potential outcome of breach in this case it is important to look at both sides of the employer WAY and employee Bob. In regards to the first clause, it raises the question of whether it is fair and reasonable to be imposed as discussed in paragraph three and if it is not then the employee Bob is not bound by it and there fore would not be in breach of it.

If it is found acceptable Bob has not breached it yet as he is working for Michael in his own time and not during his working hours, however if he were to breach this clause then he may be fairly dismissed by WAY under the principles et out in Wishes Dairies v Smith and any profits made by Bob could be obtained by WAY as damages if they were to take him to court. Bob has breached clause two as he is working for a competitor of the business and it is within the same trade that he works in now.

As a result Of this breach again he may be dismissed with support of the cases of Gibson v National Union of Dyers, Bleachers and Textile Workers (1972) and Gray v C & Pembroke Ltd (1972). Clause three amounts to the highest breach of all with an almost certainty of summary dismissal if he informs Michael of his employers pricing tragedy as it is a breach of fidelity. Although clause one and two are significantly serious there may be situations where ACS may try and resolve the situation if it is in the interest of both parties and a solution may be sought after.