NCC Assignment BM

NCC Assignment IAD Business Management

NCC International Advance Diploma in Computer Studies

Business Management

Expected candidate time allocation: 35 to 40 hours.

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Mark Moderated Mark Final Mark

Candidate Name : Aamir ShahzadNCC Candidate No :Title : market change, growth

and declineExamination Cycle : December 2004

Candidates attempting to gain an unfair advantage or colluding in anyway whatsoever (other than on joint assignments) are liable to be disqualified.Plagiarism is an offence.

Marker’s comment

Moderator’s comment


Table of content 1. Introduction 32. Activity 1 3

2.1. Definitions 32.1.1.Monopolistic market 32.1.2.Oligopolistic market 52.1.3.Competitive market 7

2.2. Microsoft 72.3. Apple 102.4. Sony 11

3. Activity 2 133.1. Return on investment 133.2. Function of HR 153.3. Recruitment advert 18

4. Activity 3 194.1. Tips on firing employee 194.2. Illegal reasons for firing employees 204.3. Firing employee with employment contact 214.4. Rules and regulations 234.5. Federal fair employment laws 274.6. Firing restrictions in written laws 28

5. Bibliography 286. Appendices 30

6.1. Employment termination contract 307. Index 31

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1. Introduction Business management is a dynamic process, as organization function in ever changing market conditions. This assignment is an investigation and comment on different aspect of growth, decline and change in market, and also some of the issues that management face in such circumstances.

2. Activity 1In this activity we did these tasks

1. Define the terma. Monopolistic marketb. Oligopolistic marketc. Competitive market

2. Find the market type, core products, new product and their effect of Microsoft, Apple and Sony.

2.1.Definitions

2.1.1.Monopolistic marketWe can understand monopolistic market in following words. When there is no competition and only one individual or business provides a good or service, the market cannot set an efficient price. In such instances, a monopoly is said to exist. However, economists maintain that a monopoly does not exist simply because there is only one provider of a good or service.

The monopoly doesn't really give the consumers a fair chance to test the new market, but almost forces them to buy into whatever product the monopoly sells.

Along with using their current products to dominate new markets, monopolies sometimes take over markets where they aren't competitors. Because the monopoly has so much revenue, the cost of taking over another company is minimal.

Monopolies create a lot of fear in consumers because they mean that even in this capitalist society, people cannot get the best products for their money. The monopolies slow down innovation and efficiency, buying other companies when they do not have the leading product, and raising prices to make more money.

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A monopoly can set prices artificially high because it has no serious competitors to force it to do otherwise. It can also arbitrarily limit the supply of the good or service it provides to create scarcity and drive prices up.

Legally, a monopoly or "trust" exists when an individual or firm can explicitly force competitors out of business by slashing prices, buying up and hoarding supplies, bribery or intimidation.

In economics, a monopoly (from the Greek monos, one + polein, to sell) is defined as a market situation where there is only one provider of a product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide (and a lack of viable substitute goods), as well as high barriers to entry for potential competitors on the market.

2.1.1.1.Characteristics A. Monopoly is a market with:

1. High barriers to entry

2. Single seller of a well-defined product for which there are no good substitutes

B. Only a few markets exist with only one seller but it is worth studying

1. Help us understand markets with few sellers

C. Price and output under monopoly

1. The market demand curve is the monopolist’s demand

2. Monopolist’s will expand output until marginal revenue equals marginal cost

a. The monopolist will charge the price on the demand curve consistent with that output

D. Profits under Monopoly

1. High entry barriers protect monopolists from competitive pressures

a. Monopolists can earn long run profits

2. Sometimes demand and costs conditions are such that monopolists can’t earn a profit

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a. When the demand curve is always below, the monopolist will incur losses

2.1.2.Oligopolistic marketAn oligopoly is a market form for "few sellers". Because there are few participants in this type of market, each oligopolist is aware of the actions of the others. Oligopolistic markets are characterised by interactivity. The decisions of one firm influence, and are influenced by, the decisions of other firms.

Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may collude to raise prices and restrict production in the same way as a monopoly

2.1.2.1.CharacteristicsA. Small number of rival firms

B. Interdependence among oligopolistic firms

1. Decisions of a firm often influence the demand, price, and profit of rivals

C. Substantial economies of scale

1. Large scale production is generally required to achieve minimum per unit cost

D. Significant barriers to entry

1. Economies of scale

2. Patent rights

3. Control over an essential resource

4. Government imposed entry restraints

5. High entry barriers distinguishes oligopoly from a competitive price searcher market

E. Products may be either identical or differentiated

1. Non-price competition includes style, quality, and advertising

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2.1.2.2.Price and outputA. No general theory exists for price and output under oligopoly

1. If the firms operated independently, they would drive down the price to the per unit cost of production

2. If the firms colluded perfectly, the price would rise to the monopoly price level.

3. The outcome is usually between these two extreme outcomes

B. Incentives to Collude and form cartels

1. Collusion: Agreement among firms to avoid competitive practices such as price reductions in order to maximize market profits

2. Cartels: An organization of sellers who coordinate supply decisions in order to maximize members’ profits

3. Oligopolists have a strong incentive to collude and raise their prices

4. Each firm has an incentive to cheat by lowering their prices because the demand curve facing each firm is more elastic than the market demand curve

5. This conflict makes collusive agreements difficult to maintain

C. Obstacles to collusion

1. As the number of firms in an oligopolistic market increases, the likelihood of effective collusion declines.

a. As the number of firms increases, the objectives of individual firms will conflict with those of the industry

2. When it is difficult to detect and eliminate price cuts, collusion is less attractive.

a. Price cuts can be better credit terms, faster delivery, free added services, improvements in quality, etc.

3. Low entry barriers are an obstacle to collusion.

a. Long run profits will not exist if potential rivals are able to enter the market

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4. Unstable demand conditions are an obstacle to collusion

a. The more expectations differ among firms, the higher the possibility of conflicts among the firms

5. Vigorous antitrust action increases the cost of collusion

a. The higher the cost of getting caught, the less collusion

2.1.3.Competitive marketA market with many buyers and sellers trading identical products so that each buyer and seller is a price taker

A market in which there are many buyers and many sellers so that each has a negligible impact on the market priceA market where no firm has the power to affect the market price of a goodA market in which no buyer or seller has market power.

2.2.Microsoft

2.2.1.Market type Microsoft controls a major backbone of the industry. Microsoft controls the operating systems of computers, which no computer can run without. Using their market share of the operating systems, Microsoft has attempted to parlay its success into other markets. Microsoft has successfully done so with its major applications such as Word, Excel, and Office. These products rose to market dominance after Microsoft's own Windows became the leading operating system.Microsoft attempted to use its dominance of the operating system market with its release of Windows 95 to enter the online service market. Microsoft bundled Windows 95 with The Microsoft Network and also attempted to disable the competition. Through this process, the monopoly doesn't really give the consumers a fair chance to test the new market, but almost forces them to buy into whatever product the monopoly sells. Because it comes as part of the package, Microsoft users will test Microsoft Network when they install Windows 95, rather than exploring the other online services. But is Microsoft's market share (about 90%) so massive that it can behave like a monopoly? As a matter of legal and economic fact, Microsoft is at least "monopolistic." It has such a commanding share of the operating systems market that it can, in many respects, behave like a monopoly. But is that necessarily bad for consumers? It is manifestly bad for Microsoft's competitors, just as AT&T's dominance was bad for

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its competition. After AT&T was broken up, companies like MCI and Sprint emerged as major competitors in the long-distance telephone service market.For example, in the Microsoft case, the Windows operating system is enormously popular, but the potential for a competing firm to provide a similar product exists. In fact, Macintosh is a small but important competitor in the computer and operating system market. Linux has also emerged in recent months as a viable alternative to Microsoft Windows.Many observers have argued that to break up Microsoft would send the wrong message to individuals and businesses in the United States. If a company produces a product that is so good that everyone wants to buy it, should that company be punished? But dividing the company into two or three smaller companies, others have argued, would force Microsoft to compete on a more level playing field with other software companies. Moreover, they argue, with competition, the quality of software would improve and prices would probably drop.

2.2.2.Core product

2.2.2.1.Operating Systems• Windows 9x, 200x, etc

• MS-DOS

2.2.2.2.Office• Access

• Excel

• FrontPage

• Outlook

• PowerPoint

• Word

2.2.2.3.Servers• Index Server

• Internet Information Server

• Mail Server

• BackOffice Server

• BizTalk Server

• Commerce Server

• Content Management Server\

• Exchange Server

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• Mobile Information Server

• Proxy Server

2.2.2.4.Programming• BASIC & QuickBASIC

• Microsoft Project

• Microsoft XML

• MSDN

• Visual Basic

• Visual C#

• Visual FoxPro

• Visual InterDev

• Visual J#

• Visual SourceSafe

2.2.2.5.Others• Active Server Pages

• Encarta

• Greetings

• Money

• PhotoDraw

• Plus!

• Publisher

• Visio 2000

2.2.3.New product: Game consolesGames

• Halo 2

• Fable

• Microsoft Flight Simulator 2004: A Century of Flight

2.2.3.1.Market type Market of game console is Oligopolistic

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2.2.3.2.CompetitorSony, Nintendo

2.2.3.3.Progress in market Microsoft has decided they want to take over the game-console industry... not for the income per se (they actually lose money on each Xbox console sold), but because everyone who buys a game console has one less reason to buy a "real computer" (i.e. one running Windows). The Xbox currently outclasses other systems in terms of game-playing specs, but that won't be true for very long. Sales have been disappointing compared to launches like the PS2 (and the fact that the machines have damaged people's CDs and DVDs isn't helping). The Sony PlayStation is an incredibly popular and powerful system, with by far the largest selection of games available. The expandability of the PS2 means it will be able to do a lot more than just run game software (something Microsoft won't let the Xbox do, because that would undermine the "need" for Windows), and can even play CDs and DVDs. Meanwhile, the price of the older "PS one" units and games is going down, making them an even better deal.

2.3.Apple

2.3.1.Market typeIts market type is oligopolistic.

2.3.2.Core product• Apple ImageWriter

• Apple LaserWriter

• Apple Lossless Encoding

• Apple Mac

• Apple Macintosh

• Apple Mail

• Apple PowerMac

• Apple QuickTake

• Apple QuickTime

2.3.3.New product: Portable audio devices (iPod)The iPod is a hard drive based music player from Apple Computer. That can play MP3, WAV, AAC, M4A (MPEG-4 Audio standard) , AIFF and Apple Lossless . In addition to playing music, iPods may be used as an external hard drive. iPods are distinguished by their small size, simple user interface based on a central scroll wheel, and fast FireWire or USB 2.0 connection. As of January, 2004, the iPod was

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the most popular digital music player in the United States, having over 50% of the market. The super-slim iPod defines what a digital music player should be. It’s lighter than two CDs, can hold up to 10,000 songs, thousands of digital photos and works as a personal voice recorder. Now you can sync with iTunes for Mac and Windows at blazing speeds, and take your entire music collection with you wherever you go.15 GB, 20 GB and 40 GB Models At just over half an inch thick, the iPod fits comfortably in the palm of your hand and slips easily into your pocket -- and your life. Merely 5.6 ounces, it weighs less than two Compact Discs, and even many cell phones. And yet the iPod gives you a huge 15GB, 20GB or 40GB hard drive -- big enough to hold 10,000 songs. Do the math: that’s four weeks of music played continuously, 24/7 -- or one new song a day for the next 27 years.

2.3.3.1.Market typeMarket of iPod is oligopolistic

2.3.3.2.CompetitorSony

2.3.3.3.Progress in marketMany students are falling in love with the iPod

2.4.Sony Sony is a consumer electronics corporation based in Tokyo (the capital of Japan). It was founded on May 7, 1946 as the Tokyo Telecommunications Engineering with about 20 employees. Their first consumer product, in the late 1940s was a rice boiler. As it grew into a major international corporation, Sony acquired other companies with longer histories, including Columbia Records (the oldest continuously produced brand name in recorded sound, dating back to 1888)Key People

President Tim Sarnoff SVP Operations Tom Hershey SVP Technology George Joblove

Top Competitors

• Matsushita

• Philips Electronics

• Sanyo

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2.4.1.Market typeIts type is competitive market

2.4.2.Core product•Reel-to-reel tape recorders

•Video tape recording

•Betamax

•Betacam

•Computer:

•VAIO

•Video game consoles

•PlayStation

•Computer printers

•Sony PictureStation DPP-EX50

•Removable media

•MiniDisc

•Memory Stick

•Robotics

•Personal stereo:

•Walkman

•Discman

•Television

•LCD WEGA

•Projector

•Digital video cameras

•Sony DCR-PC330

•Ebook display device

2.4.3.New product: Film production

2.4.3.1.Market typeIts market type is competitive.

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2.4.3.2.Competitor• MGM

• Fox

• Disney

• Time worrier

2.4.3.3.Progress in marketSony has a strong position in market. Specially, Sony’s produced file “Spider Man” is a very popular film.

3. Activity 2In this activity we did these tasks

1. Return on Investments with worked example2. Function of HR3. Recruitment advert

3.1.Return on Investment

3.1.1.Accounting Rate of ReturnAccounting Rate of return = profit / (capital employed * 100)Accounting Rate of return = (average annual net profit before interest and tax * 100) / initial capital employed on the projectAccounting Rate of return = (average annual net profit before interest and tax * 100) / average annual capital employed on the project

3.1.2.Worked example

Costs Yr0 Yr1 Yr2 Yr3 Yr4 Yr5 Total

Analysis 1.8 1.8

Design 1.8 1.8

Coding 2.4 2.4

Testing 1.2 1.2

Installing 1.3 1.3

Hardware 1.6 1.6

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Costs Yr0 Yr1 Yr2 Yr3 Yr4 Yr5 Total

Other 2.6 2.5

Running 1 1 1 1 1 1 6

Total 13.6 1 1 1 1 1 18.6

Savings

Clerical 0 1.5 1.5 1.5 1.5 1.5 7.5

Paper 0 2.5 2.5 2.5 2.5 2.5 12.5

Other 0 2.3 2.3 2.3 2.3 2.3 11.5

Benefits

Image 0 1.6 1.6 1.6 1.6 1.6 8

Transaction 0 2.9 2.9 2.9 2.9 2.9 14.5

Other 0 1.3 1.3 1.3 1.3 1.3 6.5

Total 0 12.1 12.1 12.1 12.1 12.1 60.5

Net benefit -13.6 11.1 11.1 11.1 11.1 11.1 41.9

Accounting Rate of return = (average annual net profit before interest and tax * 100) / initial capital employed on the projectAccounting Rate of return = (41.9/6) * 100 / 13.6Accounting Rate of return = 51.348

Accounting Rate of return = (average annual net profit before interest and tax * 100) / average annual capital employed on the projectAccounting Rate of return = (41.9/6) * 100 / 3.1Accounting Rate of return = 225.269

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3.2.Function of HR

3.2.1.PersonnelIt is responsible for the policies or rules tat govern how staff or employees are treated. The policies should cover the company intention for all personnel issues, such as:

• Maternity pay;

• Holiday entitlements

• Statutory sick pay;

• Disciplinary procedures.

The personnel function can be carried out by departmental (line) managers as part of their overall roll, or be the responsibility of a specialist department.

The personnel section is responsible for:

• Determining staff policy including recommending salary and employment conditions

• Staff recruitment

• Preparing job specification

• Arranging and conducting selection processes

• Making job offers

• Checking reference

• Supporting staff enquires

• Maintaining staff records

• Staff welfare including benefits

• Dismissal and disciplinary process

Employee managementEmployee management comprises three areas:

• Line management, or the supervision of the employee’s routine work;

• Staff management, covering pay, conditions, health and safety, etc.;

• Human resources management, which recognizes the importance of people as vital organizational resource needing special management resource;

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3.2.1.1.Traditional role of the personnel department (line & staff management)

• Recruitment and selection

• Standardized treatment of staff

• Employment regulations

• Provision of coordinated information

3.2.1.1.1.Recruitment• Ensure required Skills, qualifications, experience

• Can be Internal or external recruitment

• Sets the salary package?

3.2.1.1.2.Standardized treatment of staff• Personnel policy

• Set proper Communications procedures

• Appraisal procedures

• Training and development

• Pay and benefits

3.2.1.1.3.Employment regulations• Recruitment

• Health and safety

• Illness, sick pay, compensation

• Disciplinary procedures

• Dismissal

3.2.1.1.4.Provision of coordinated information• Planned numbers and types of employees

• Actual numbers

• Employee analyses

• Time keeping, absence and turnover statistics

• Employment costs

3.2.1.2.Human resource management• Proactive management

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o Wide-ranging resourcing

o Re-structuring

o Career progression

• Planning for the futureo New skills required

o New working practices

• Managing change

3.2.2.Payroll• It perform necessary calculations and produce a pay slip for the employee

and the physical transfer of funds

3.2.3.Training & staff developmentAres of training are:

• Induction training

• Skills training

• Staff development

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3.3.Recruitment advert

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WantedJunior programmer for system developmentTo be based at Islamabad

Qualification required: BCS/BIT

Primary job function includes

• Maintenance of Databases

• Maintenance of Data Dictionary

• Maintenance of Documentation

• Maintenance of Software

Experience: at least one year of system development using following tools

• VB, VC, C++, Java

• Ms-SQL server, Oracle

• CASE Tools

• Networking

Expected Salary: 15,000

Apply in confidence with your C.V & latest photos

Before 25 March, 2005

ASC Company LtdIT Department Manager

F9, IslamabadPakistan


4. Activity 3Can we fire an employee for any reason? No. Although the law gives employers a great deal of leeway in deciding whether to fire an employee, there are limits.If the employee does not have an employment contract and if you have never made any promises to the employee about termination, then you can fire the employee for any reason that isn't illegal.If the employee has an employment contract or if you have made promises to the employee, then that contract or those promises will control when you can fire the employee. In most cases with an employment contract or where you made promises, you can only fire the employee for something called "good cause". In addition, you cannot terminate these employees for any illegal reason

4.1.Tips on Firing Employees• Don’t take firing lightly: Usually, even a very weak job performance can be

brought up to a satisfactory level. Firing, on the other hand, involves a significant legal risk. It also has a traumatic impact on other members of your staff, even if they understand and appreciate the reasons for the termination.

• Don’t hesitate to consult with counsel: If you have any questions regarding a firing, consult with an expert employment attorney prior to the termination. You may save yourself the legal fees of a post-firing lawsuit.

• Plan what you are going to say: If you don’t carefully plan out what you are going to say during a firing, and stick to it, chances are you will offer kind words regarding their work performance. This can lead to legal action. During a firing, you don’t want to even hint at anything positive in the person’s job performance.

• Be calm: Even if the employee you are firing irritates you, don’t let on. If he or she lashes out verbally, don’t get excited. Soon this person will be gone and will no longer be your problem.

• Be humane: Treat the employee you are firing as kindly as possible during the termination process. This is a very traumatic experience for them. Being kind, without conveying anything positive about their job performance, can assuage this trauma. And, of course, it can decrease the odds that someone will bring a wrongful firing suit against your company or place negative phone calls to your remaining staff.

• Avoid surprises: Give weak employees every opportunity to improve their work performance or attitude before opting to let them go. If you can prove that you have given them every possible chance, there will be less grounds for a lawsuit. Plus, other employees will feel less threatened by the implications of the firing. Additionally, employees who have been aware for some time that their continued employment is on the line will find the actual firing less traumatic. It may well be that they will feel “clued,” and will seek and find

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employment elsewhere before you can fire them. At all costs, you want to avoid firing someone who has no idea that his or her job is in jeopardy.

• Have a strong paper trail: Good documentation of poor work performance or attitude is essential in defending against a wrongful firing suit. Make a record of any verbal warnings you have given to the employee and, if possible, issue written warnings to him or her well before the firing. Negative performance reviews are a must.

4.2. Illegal Reasons for Firing EmployeesThere are certain reasons that you can never use to fire an employee. Both state and federal law forbid you from using certain reasons to fire an employee. These prohibitions apply regardless of whether the employee has a contract for employment with you or not.

4.2.1.DiscriminationFederal law makes it illegal for most employers to fire an employee because of the employee's race, gender, national origin, disability, religion or age (if the person is older than 40). Federal law also prohibits most employers from firing someone because that person is pregnant or because that person has recently given birth or because of any related medical conditions. .Most states also have anti-discrimination laws that include all of the characteristics listed in the federal law. Many state laws, however, are broader than federal law. They include additional prohibitions and they include a wider range of employers.

4.2.2.RetaliationIt is illegal for employers to fire employees for asserting their rights under the state and federal anti-discrimination laws.

4.2.3.Refusal to Submit to a Lie Detector TestThe federal Employee Polygraph Protection Act prohibits most employers from terminating employees for refusing to take a lie detector test. Many state laws also set out strong prohibitions against using lie detector tests.

4.2.4.Alien StatusThe federal Immigration Reform and Control Act (IRCA) prohibits most employers from using an employee's alien status as a reason for terminating that employee so long as that employee is legally eligible to work in the United States.

4.2.5.Complaining about OSHA ViolationsThe federal Occupational Safety and Health Act (OSHA) makes it illegal for employers to fire employees for complaining that work conditions fall short of complying with state or federal health and safety rules.

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4.2.6.Violations of Public PolicyMost states prohibit employers from firing an employee in violation of public policy -- that is, for reasons that most people would find morally or ethically wrong. Of course, morals and ethics can be relative things, so the law will vary from state to state. Some states may prohibit reasons that other states do not. In addition, the reason must be pretty bad to violate public policy. A reason that strikes most people as merely mean or unfair usually won't do it. Despite this relativity, most states agree that the following would violate public policy and would therefore be illegal:

• Terminating an employee for refusing to commit an illegal act (such as refusing to falsify insurance claims)

• Terminating an employee for complaining about your illegal conduct (such as your failure to pay minimum wage), and

• Terminating an employee for exercising a legal right (such as voting or other political activity).

4.3.Firing Employees With Employment ContractsEmployment contracts can limit your ability to fire employees. If an employee has an employment contract -- whether written or oral, express or implied -- that contract may limit your ability to terminate the employee. Usually, if an employment contract exists (which is not always easy to determine), you must treat the employee fairly and only fire him or her for "good cause."

4.3.1.Determining Whether There's a ContractThe first step in learning the reasons for which you can fire an employee is to determine if you have an employee contract with him or her. Occasionally, this will be as simple as opening the employee's personnel file and seeing a document labeled "employment contract." This type of contract is called an express written contract. Usually, however, it's not that easy. This is because employers sometimes create employment contracts without meaning to. This type of contract -- called an implied contract -- binds employers as much as written contracts do. Employers create implied contracts when they promise the employee something, usually job security. These promises can occur in all sorts of circumstances, such as during a casual conversation with an employee or as part of a discussion in an employee handbook. No matter how the promise occurs, if a court thinks the promise has enough weight and if the court thinks the employee has relied on that promise (usually through continued employment), the court will view that promise as a contract and will bind you to it. Figuring out whether you have unintentionally created one of these types of contracts can be tricky business. Past court decisions do provide some guidance, however. Courts have found that an implied contract was formed in the following circumstances:

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• In trying to convince a prospective employee to take a job, an employer promises the employee that he will only be fired if he doesn't do his job well.

• An employee manual states that once employees have been with a company for more than 90 days, employees become permanent.

• During an evaluation, a supervisor gives an employee a glowing review and tells the employee that he has a long future at the company unless he does something really wrong.

Don't let the specter of implied contracts worry you too much, however. The vast majority of employees in this country are working without a contract -- express or implied. If you are dealing with an employee who has only been in the job for a year or less and if you feel certain that you have never promised the employee job security, then the chances are that the employee does not have an implied contract and that you can fire the employee for any reason that isn't illegal. Also, even if the employee does have an implied contract, you can still fire the employee for good cause

4.3.2.Standards for Firing Employees With Employment Contracts

Regardless of what type of contract you have with the employee, that contract will obligate you to treat an employee fairly. This obligation is called the covenant of good faith and fair dealing. If you have an express written contract with an employee, it will usually state the reasons for which the employee can be fired. If you want to terminate that employee, you must follow what the contract says. Often, contracts will simply state that an employee can only be terminated for something called good cause. Sometimes, however, the contract will be more detailed. Either way, you must follow the contract terms.Usually, the existence of an implied employment contract means that you can fire an employee only for good cause.

4.3.2.1.Good Faith and Fair DealingIf you have a contract with an employee, then you have an obligation to treat that employee fairly. Although this rule might seem like a gaping hole in your ability to terminate employees, it really isn't. To breach this obligation, employers have to engage in very egregious conduct. For example:

• Firing employees to prevent them from collecting sales commissions • Firing employees just before their retirement benefits vest, and • Fabricating evidence of poor performance when the real motivation is to

replace the employee with someone who will work for lower pay.

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4.3.2.2.Good CauseMost employment contracts require that employees only be terminated for good cause. The exact meaning of good cause varies from state to state, but generally it means what it says: You must have a legitimate reason for firing the employee. In general, the termination must be based on reasons related to business needs and goals. Other examples of good cause include the following:

• Poor job performance • Low productivity • Refusal to follow instructions • Habitual tardiness • Excessive absences from work • Possession of a weapon at work • Threats of violence • Violating company rules • Stealing or other criminal activity • Dishonesty • Endangering health and safety • Revealing company trade secrets • Harassing co-workers • Disrupting the work environment • Preventing co-workers from doing their jobs, and Insubordination.

4.4.Rules and regulationThe following questions and answers will be of interest to employers and employees under federal jurisdiction. These are for Canada. It is available from any Labour Program office of Human Resources Development.

4.4.1.Rules for Group Termination

1. What constitutes a group termination?

The termination of 50 or more employees from a single industrial establishment either simultaneously or within any period not exceeding four consecutive weeks.

2. To whom must an employer give notice of a group termination?

Written notice of a group termination must be given to the Minister of Labour and copies sent to:

a. The Minister of Human Resources Development b. The Canada Employment Insurance Commission

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c. Any trade union certified to represent any employee in the group being terminated;

d. Any employee in the group being terminated who is not represented by a trade union. (This requirement may be met by posting a copy of the notice in the work place where people can see it.)

3. When must an employer give notice of a group termination?

At least 16 weeks before the date the terminations commence.

4. What information must an employer include in the notice?

A notice of group termination of employment must include:

a. The name of the employer; b. The location at which the termination is to take place; c. The nature of the industry of the employer; d. The date or dates on which the employer intends to terminate the

employment of any one or more employees; e. The estimated number of employees in each occupational classification whose

employment will be terminated; f. The reason for the termination of employment; and g. The name of any trade union certified to represent any employee in the

group of employees whose employment is to be terminated or recognized by the employer as bargaining agent for such employees.

5. Is it possible for an employer to obtain a waiver from the requirement to give notice?

Yes. The Code provides that the Minister of Labour may waive any requirement of this Division where it is shown that such application would be prejudicial to the interests of the employee or of the employer, or would be detrimental to the operation of the industrial establishment. The Minister of Labour may also waive any or all of the requirements of this Division if it is demonstrated that measures are already in place that are substantially the same as those required to be established. Applications for such a waiver should be made as early as possible to the Minister of Labour.

6. Does an employer have obligations in-group termination situations other than the notice requirement?

Yes. With some exceptions (see question 12), employers undertaking group terminations are required to establish a committee of employer and employee representatives. See also questions 14-26.

7. What is the purpose of the committee?

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To develop an adjustment program aimed at eliminating the necessity for the termination or, where that is not possible, to minimize its impact on affected employees and assist them in obtaining other employment.

8. When must an employer establish a committee?

An employer must establish a committee immediately upon providing the notice of termination. The committee must hold its first meeting within two weeks of the date the notice is given.

9. How much time does a committee have to develop an adjustment program?

The maximum time allowed is 16 weeks or the length of the notice period.

10. What happens if the committee cannot agree on an adjustment program?

Either party may apply to the Minister of Labour for the appointment of an arbitrator to settle outstanding issues. However, application cannot be made until at least six weeks after the notice of termination is given.

11. Are there restrictions on the arbitrator's authority?

Yes. The arbitrator has a duty to assist the parties in developing a program. However, his or her authority to arbitrate is restricted to matters that are normally the subject of collective agreement clauses on termination of employment. An arbitrator is not empowered to review the employer's decision to terminate, or to delay the termination.

12. Under what circumstances are employers not required to establish a joint planning committee?

In broad terms, employers are not required to establish joint planning committees if the Minister of Labour has granted a waiver from that requirement as detailed in question 5.

4.4.2.Rules for Lay-Offs

13. Are all lay-offs considered terminations?

No. Certain lay-offs do not constitute terminations of employment such as when:

a. a lay-off is a result of a strike or lockout; b. the term of the lay-off is three months or less; c. the term of the lay-off is for more than 3 months but not more than 12

months, and the employees maintain recall rights pursuant to a collective agreement.

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In certain circumstances, other lay-offs of more than three months may not constitute a termination of employment.

4.4.3.Rules for Individual Termination

14. What notice or payment in lieu of notice must be given to an employee whose employment is being terminated?

An employee is entitled to written notice of the employer's intention to terminate his or her employment, at least two weeks before the date specified in the notice. In lieu of such notice, the employee is entitled to two weeks' wages at the regular rate.

15. Does the requirement for notice or pay in lieu apply to all employees?

It applies to any employee whose employment is being terminated except as follows:

a. an employee who has not completed three consecutive months of continuous employment;

b. an employee who terminates his or her own employment; c. an employee who is dismissed for just cause; d. an employee who is on a lay-off that does not constitute a termination of

employment (see question 13).

16. Is an employer required to give individual notice of termination or pay in lieu of notice to an employee covered by a group termination notice?

Yes. Even though an employee's termination is included under a notice given in respect of a group termination, individual notice is still required.

17. Does this provision apply in the case of an employee covered by an agreement which provides for "bumping rights", that is, which authorizes an employee whose position becomes redundant to displace someone having less seniority?

When an employee is covered by a collective agreement that provides for "bumping rights", the employer must advise the union in writing two weeks' before the position becomes redundant and post a copy of the notice prominently in the work place. The employer may, however, choose to pay two weeks regular wages to the laid-off employee in lieu of notice.

18. Does the Code require an employee to give notice if he or she terminates the employment?

No.

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4.5.Federal Fair Employment LawsThe following table shows some of the federal fair employment laws that are of general application. Normally, the effect of these laws starts with the hiring process and continues through the termination of the employment relationship.

Federal Law Employment-Related ProhibitionWho's Subject to the Law?

Title VII of the Civil Rights Act

Prevents discrimination against employees on the basis of race, color, religion, sex or national origin.

Employers having at least 15 employees.

Age Discrimination in Employment Act

Prevents discrimination on the basis of age against employees who are over 40 years old.


Americans with Disabilities Act

Prevents discrimination against disabled employees.


Immigration Reform and Control Act

Prevents discrimination against employees on the basis of national origin or citizenship status.


National Labor Relations Act

Prevents discrimination against employees who engage in or who refuse to engage in union activity. Also protects nonunion employees who act together in an effort to improve or protest working conditions that affect them on the job.

Employers whose business has a significant impact on interstate commerce.

Employee Retirement Income Security Act

Prevents employees from being discharged solely to prevent them from vesting or qualifying for benefits under qualified pension plans.

Employers who maintain qualified pension plans for their employees' benefit.

Retaliatory discharge laws. Apart from antidiscrimination laws, a number of federal laws make it unlawful for an employer to fire an employee merely for asserting rights under those laws. For example, the federal law providing minimum wage and overtime rules (the Fair Labor Standards Act) protects from discharge employees who start proceedings or who take other actions in an attempt to have the law

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enforced. Similar restrictions on so-called "retaliatory" discharges are provided under the Occupational Safety and Health Act, the Vietnam Era Veterans Reemployment Act, the Employee Polygraph Protection Act, various environmental protection laws such as the Clean Air Act, and several other federal laws.Firing substance abusers. If alcohol or drug use has caused one of your employees to have a dangerous accident, endanger another employee, or not show up for work frequently, you may be tempted to eliminate the "problem" by simply firing the employee. However, before doing so, you should keep in mind that federal and state laws that protect disabled employees against discrimination may apply to alcoholics or drug users. In other words, it may be unlawful for you to fire an employee for a substance abuse problem unless you have first given the employee a reasonable chance for rehabilitation.

4.6.Firing Restrictions in Written LawsWhat's one of the easiest ways to find yourself defending a wrongful discharge lawsuit? Fire an employee under circumstances that violate a fair employment law. Numerous federal, state, and even local laws restrict an employer's right to fire an employee for discriminatory or retaliatory reasons.

• Federal fair employment laws: Federal laws protect employees against various forms of discrimination in the workplace. This protection lasts throughout the entire employment relationship, including the period leading up to and ending with an employee's separation from the business. Thus, for example, you could run afoul of federal law if you fire an employee solely on the basis of the employee's race, color, religious preferences, gender, national origin, disabilities (including substance abuse problems), or age.

• State firing restrictions: Every state has its own laws that make it unlawful for an employer to fire an employee under certain circumstances. Many states have their own discrimination laws that offer employees similar, if not broader, protections as the corresponding federal laws. For example, state laws, unlike their federal counterparts, may protect employees from discrimination on the basis of sexual orientation or personal appearance. Furthermore, many state laws apply to employers that corresponding federal laws exempt from their coverage. Other frequently encountered limitations prevent employees from being fired merely because they file claims for workers' compensation benefits, report an employer's illegal activity, serve on jury duty, or refuse to take a lie detector test.

4.7.Legal Restrictions on FiringIf you enter into a formal employment contract with an employee (or a union contract with a group of employees), you'll frequently specify in the contract the proposed length of the employment relationship and the reasons for which either party can end the relationship. In other words, the contract's terms will generally govern your ability to fire the employee, as well as the employee's ability to quit. If

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either party attempts to terminate the relationship in violation of those terms, a potential breach of contract claim arises.Assuming that a formal contract does not govern your employment relationships, as is generally the case, what limitations restrict your ability to fire your employees?In all states, such relationships are governed by the "employment-at-will" doctrine. "Employment-at-will" means that there's a presumption that the employee is employed at the employer's will for an indefinite period rather than for a fixed term. Traditionally, both the employer and the employee have had the ability to end an at-will relationship at any time and for any reason. However, at least from the employer's perspective, the unlimited freedom to fire at-will employees at any time for good cause, bad cause, or no cause at all has been eroded in recent years by the federal and state governments and the courts. The exceptions that these institutions have carved into the employment-at-will doctrine form the foundation for most wrongful discharge claims, in which employees sue you for lost wages, punitive damages, and occasionally, reinstatement in their job.

• Limitations in written laws: numerous federal and state laws potentially restrict an employer's ability to fire at-will employees. These laws fall into two general categories. The first category consists of those laws that make it illegal for employers to discriminate against certain individuals. The second category consists of laws that make it illegal for an employer to retaliate against employees who exercise rights conferred by the laws or who take steps to see that the laws are enforced. Courts, too, have taken steps to limit an employer's ability to fire at-will employees. In doing so, they generally rely on one of the following theories:

• The implied contract limitation: that some statement or document from the employer effectively created a formal employment contract where none previously existed. For example, stating that employees will be fired only for good cause in your handbook may form the basis for such an "implied" contract.

• The public policy limitation: that the firing goes against "public policy" by infringing on some right granted employees by federal or state law or because it is otherwise morally or socially wrong. For example, firing an employee merely for filing a workers' compensation claim is illegal.

• The bad faith limitation: the few courts that have relied on this theory presume that employers are generally obligated to deal fairly and in good faith with all their employees. For example, firing an employee for the sole purpose of denying the employee a bonus that the employee has earned but not yet received may be unlawful in some states.

5. Bibliography • Managing business project book• Business management book

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• Business organization book• Business communication book • Previous assignments• Internet

6. Appendices

6.1.EMPLOYMENT TERMINATION CONTRACT (SAMPLE)Most employees are familiar with employment contracts, which cover all the issues of the job and the employee’s and employer’s rights and responsibilities. Sometimes the parties also have a contract that covers just the end of the employment relationship. It includes some of the issues covered in the employment contract plus additional obligations or benefits the parties negotiated at termination. It might also contain a “release” by the employee of any claim he or she might otherwise have against the employer, in exchange for a nice severance package. You might find that an employment termination contract is the best way to protect yourself as you leave one job and start another.TERMINATION CONTRACTEmployer [name of company] and Employee [employee’s name] hereby agree to thisTermination Contract.Employee and Employer had an employment agreement from [start date] to [termination date], in which they agreed that they would resolve any employment dispute as follows [method of dispute resolution, such as arbitration, and/or choice of law].Employee hereby agrees and obligates [himself/herself] to the following:1. Employee will not engage in any competition with Employer for the period of [duration of noncompetition agreement, such as one year], which includes employment with another company in the same or similar business as Employer, establishment of a new company in the same or similar business as Employer, or any contractual arrangement under which Employee consults, advises, or assists another company in the same or similar business.2. Employee will not engage in conduct or make statements relating to [his/her] employment or this Termination Contract that can be construed as critical or derogatory of Employer its employees, agents, partners, shareholders, officers, directors, and affiliated companies.3. Employee releases and discharges all claims, complaints, charges, disputes, and demands against Employer and its employees, agents, partners, shareholders, officers, directors, and affiliated companies, except for claims, complaints, charges, disputes, or demands that could arise from a breach of this Termination Contract, such as claims for back pay, front pay, damages, and fees such as attorneys’ fees, that could arise from federal or state employment laws or from any conduct by Employer. Employee has had the opportunity to consult with [his/her] attorney and

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is aware of [his/her] legal rights, but knowingly and voluntarily waives those rights to the extent possible under law.4. Employee will not share, divulge or disclose any information about Employer or its employees, agents, partners, shareholders, officers, directors, and affiliated companies that Employee knows is confidential or is considered a trade secret, trademark, service mark, trade name, patent, or copyright, including information or a product invented or developed by Employee during [his/her] employment with Employer.5. Employee has surrendered to Employer paper and electronic copies of all letters, memoranda, documents, records, and other material that is the property of Employer. Employee has also surrendered to Employer all other tangible property of Employer, including keys, products, charge cards, telephones, pagers, computer and other equipment, and vehicles.6. Employee will not share, divulge, or disclose the provisions of this Termination Agreement except to Employee’s family, agents, representatives, or advisors, or to the extent required by law. Employer and Employee further agree that in consideration for the above agreements and promises, Employer will pay Employee as follows: [terms of severance payment, such as lump-sum amount or payment schedule]. Such severance payment constitutes the entire obligation of Employer to Employee. Employer and Employee further agree that in the event of any breach of this Termination Contract or default hereunder, the injured party has the right to pursue any legal action available to enjoin the breaching party from further injurious conduct and/or to recover from the breaching party damages for such breach or default.Dated:

Signed:

7. Index

Accounting Rate of Return 13

Competitive 7

Discrimination 20

Employment Contracts 21

Employment Termination Contract 30

Fair Employment Laws 27

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Group Termination 23

HR 15

Individual Termination 26

Lay-Offs 25

Monopolistic 3

Occupational Safety and Health Act 20

Oligopolistic 5

OSHA 20

Payroll 17

Personnel 15

Recruitment 16

Retaliation 20

Written Laws 28

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NCC Assignment BM

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