BULAW5911 Managing The Legal Environment Assignment Help
1. What, if anything, is different in an employment contract as compared to other types of contract such that they tend to attract higher levels of regulation and enforcement?
2. What common factors can you identify in the exploitation cases that have been reported/investigated?
3. Should there be freedom of contract in relation to employment contracts?Why or why not?
4. What risk management issues should an employer or potential employer consider when deciding on terms and conditions of employment?
5. Referring to one example of where employee exploitation has been identified, what steps should the employer have taken to address the legal risks of the situation?
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Features of Woolworths
The Woolworths is a retail company Headquartered in New South Wales (NSW), Australia. This Public organization serves the areas of Australia and New Zealand. The following are features of this organization:
Size of organization: Woolworths is one of the most eminent and largest supermarkets in Australia. This has near about 3000 outlets all over Australia and New Zealand. The organization is so vast that this employs near about 201,000 employees (Woolworths Group., 2019). Woolworths serve their customers with a number of products and services.
Structure of organization: The hierarchy of this organization is very simple; this starts with the Board of Directors and the CEO and ends with the employees. The different departments of this organization are Human Resources, Research and Development, Inventory Control, Marketing Department, and the Finance Department (Woolworths Group., 2019). To control the other business operations, the organization has the department of Logistics department, Advertisement department, and the department of Domestics and International Operations.
Responsibility for the environment: The Woolworths group is inclined to implement and perform the responsibilities of the Corporate Social Responsibilities (CSR). The managing department of this organization has developed the strategies to reduce the impact of organizational activities on the environment. The organization takes part in the CUFA project to perform the CSR (Corporate Social Responsibility Strategy | Woolworths Employees Credit Union., 2019).
Priorities: Customers are the priority of this organization. Instead of focusing on more revenue, the organization motives to focus on the customers and provide them with the superior quality of services. The organization aims to introduce innovations and new concepts to develop their products and satisfy customer needs as well.
Performance: The Woolworths is the best performer in Australia in the sector of Retailing. The organization has developed strategies like NPD, Product Evolution to increase their sales. Woolworths has recorded a 12.5% rise in its profit margin (Woolworths Group., 2019).
Purpose of Organization: The purpose of the organization is to enhance the quality of life of the customers. Woolworths aims to ensure the quality of life with superior, fresh, healthy and hygienic products. The organization's vision is to be the world's most eminent and trusted retailer.
Services provided by Woolworths
The Woolworths group conducts the business operation through the subsidiaries of Woolworth's supermarket, Woolworths online, Woolworths Finance, Caltex Woolworths, Big W, and ALH group. The Woolworths supermarket serves customers with domestic products. The groceries like fresh fruits, vegetable, bread, packed meal, soft drinks, health drinks and other food products (Woolworths Group., 2019). The organization conducts the retail of the household products like Phenyl, room fresheners, cleaning products and so on. The beauty products, baby products, cosmetics are also availed here. Woolworth's online serves the customers will the facility of online purchasing. The Caltex Woolworths is a subsidiary of Woolworths Group that conducts the business of petrol. The financial services of Insurance, Investment planning, Brokerage, Credit, and debit services, personal loans and insurance services are provided by Woolworths Finance (Woolworths Financial Services | Woolworths.co.za. (2019). The Big W provides the services of general merchandise. The organization provides the services of everyday services, hotels, and liquors.
Legal Governance, Management, and leadership issues
The legal governance issues of Woolworths are:
Accountability: The CEO of Woolworths is responsible for managing the governance of the organization. The CEO has not performed the responsibility to assess the day to day activities and business operations of Woolworths and report this to the Board members. This issue of Accountability is stimulating the incidents of mismanagement and poor governance.
Implementation of Acts: The organization is facing the issue of disobeying of laws and legislation. Woolworths is not abiding the Corporation Act, 2001; which lead the organization to be penalized of $3 million (10 challenges for Woolworths, 2015). There is a lack of accountability of both the managers' and the employees to maintain the law. Disobeying the laws is creating a big issue related to legal governance.
The management issues of Woolworths are:
HRM issues: the organization is dealing with the issue of employee management. The Human Resources Department of Woolworths is lacking to recruit the right talent for the organization. Moreover, the organization has not recently conducted the Training and Development program for the employees of the marketing department. This is increasing the rate of employee turnover. Moreover, the HRM team is not concerned about employee retention (Jones, & Jones, 2015). In spite of taking the steps for employee retention, the organization is conducting fresh interviews after employee turnover.
Communication: This has become remarkable management related issue of Woolworths. Woolworths belongs to the retail industry, hence, the organization needs to have an overview of the market scenario, customer needs, feedbacks and other business-related incidents. Woolworths has deployed its own B2B integration for integrating the suppliers with the organization. Sill there is a communication gap between the suppliers and the purchasing department that is creating issues in the supply chain of Woolworths (Woolworths chairman and board must be held accountable for poor governance. 2016).
Issues of employee safety: The managers are responsible for the workplace health and safety of the employees working in the organization. The organization is immensely facing the issues of management of the employees. Woolworths is lacking to provide its employees with adequate workplace safety. Moreover, the management is not taking the liability of providing compensation to the employees. Woolworths did not comply with the Fair Work Act, 2009, which lead the company to be penalized of $231,000 for not providing compensation for workplace injury with an employee (worksafe.qld.gov.au, 2019).
The leadership issues of Woolworths are:
Effectiveness of leadership: The current leaders of Woolworths are not effective enough to motivate the employees, develop the skills and development of the employees, and inspire them to face new challenges with a positive attitude. The lacks of effectively of the departmental leaders are resulting in the downfall of the skill of employees, strategic thinking, and set a performance standard. This caused the diminishing growth of the organization Woolworths. This issue is reducing the growth of the organization's revenue and sales margin. The market results reveal that Woolworths had faced a slower growth of the sales of Liquor products. The sales of liquor have been increased by 0.2% only. Moreover, the leadership issue lessens the fourth quarter growth by 0.7% (Woolworths Financial Services | Woolworths.co.za. (2019).
Relationship between leaders and employees: Woolworths is facing the problem of the unsatisfactory relationship between employees and management. The leaders do not treat the employees with modesty and do not give predominance to the employee's security and want. This is creating conflict between the employees and the managers and hence the productivity of the employees is reducing. This results in the increasing rate of employee turnover of the organization. The unsuccessful relationship between the leaders and the employees are giving birth to the issues of higher employee turnover rate. The employee turnover rate for the last year of Woolworths was 11.12% (Woolworths profit jumps, but supermarket warns bag ban is now hurting sales. 2018).
Legislation important in regulating Woolworths
The most important legislation that is important for the regulation of Woolworths is Competition and Consumer Act, 2010 whose objective is to enhance welfare by promoting competition and fair trading for the protection of consumers. As per the Competition and Consumer Act, 2010, section 99, subsection 1, the organization needs to apply a label on the goods that are to be supplied in the form or band or ticket. As per the Consumer and Competition Act, 2010, section 99, Woolworths needs to ensure that the goods and products being supplied to consumers are properly labelled (Legislation.gov.au, 2019). The other regulation that Woolworths needs to follow is the Work Health and Safety Act, 2011, which states that employees need to be compensated for the injury caused at the work. As per the Work Health and Safety Act, 2011, the employees that are entitled to compensation for the injury caused at the workplace. As per Work Health and Safety Act, 2011, Category 1, the employer is liable to pay the penalty of $3,00,000 or need to serve 5 years of jail provided that the employees are suffering from any kind of serious injury or death (worksafe.qld.gov.au, 2019). Similarly, as per Work Health and Safety Act, 2011, category 2, the employer needs to pay employee nearly $ 1.5 million provided the employees are suffering from any kind of injury or risk of death and have indulged in any kind of illegal electrical activity.
As per the Corporation Act, 2001, section, 191, the employers need to disclose all the relevant information to the investors (Legislation.gov.au, 2019). Woolworths faced this risk and need to pay a penalty of $3 million because it did not disclose the complete information related to the investors. As per the Corporation Act, 2011, section 2, the remuneration needs to be provided to employees is there performance targets are met. The breaching of this law may result in an organization may a penalty as decided by the Government of Australia.
The most important law that Woolworths need to abide by is Australian Consumer law.
As per Australian Consumer law, the consumer has the right to claim refund or compensation for the product that causes serious injury to them. Moreover, as per Australian Consumer law, section 2, prohibits an organization from engaging in misleading and deceptive conduct. Woolworths indulged in misleading practices that are sold goods that hazardous for health thereby affecting the reputation of the organization. As per the Australian Consumer Law, the product by customers or consumer comes with automated guarantees. As per Australian Consumer law, the product or service provided by the organization fails to meet consumer expect taxations then the consumers have the right to ask for repairing, replacement, or refunding of the product. Moreover, as per Australian Consumer law, the consumers have the right to seek compensation for losses and damages that customer may suffer due to a problem with the product.
The other law that Woolworths need to comply with is Privacy Act, 1988, which states that all the information related to customers' needs to be handled properly. The objective of Privacy Act, 1988, is to protect the privacy of individuals (Oaic.gov.au, 2019). The employer needs to maintain a record of employee's personal information such as the number of hours worked by the employees, leave to be given to the employees and the benefits to be provided to employees. As per Privacy Act, 1988, the personal information such as bank account details, address and telephone number of their customers cannot be shared without the consent of the customers. The sharing of information can lead to breaching of act and legislation thereby resulting in an organization has to pay penalty to the Government of Australia.
Legal Risk for Woolworths
Disclosure of Information
Woolworths is facing legal action related to the plunging of share prices sparked by a downgrade of profits due to which it may cost Woolworths (NewsComAu, 2015). The result of this case is that the Woolworths had to pay nearly $ 100 million in order to settle the case against it over plunging of share prices. As per the Corporation Act, 2001, section 6, the company needs to disclose the activities to its investors. Woolworths in 2015, is found to be breaching Corporation Act, 2001, as the company failed to inform the investors of significant risks for its profit projections. As per the Corporation Act, 2001, section 6, the corporations need to make timely and appropriate market disclosure or else it may result in causing a loss for shareholders (Legislation.gov.au, 2019).
Misleading and False Representation of Products
Another legal risk that Woolworths faced is that it engaged in misleading and made false claims and representations about the safety of its products due to which it has to pay a penalty of nearly $ 3 million (accc.gov.au, 2016). As per the Competition and Consumer Act, 2010, section 6, subsection 1, the organization is liable to pay penalty for deceptive and misleading conduct with consumers. As per the Competition and Consumer Act, 2010, section 6, subsection 1, the consumer can claim for damages caused due to a false representation of the product. Similarly, As per the Australian Competition and Consumer Commission, Section 2, it prohibits an organization from indulging in deceptive or misleading conduct in trading or selling of activities. As per this law, it is unlawful to provide consumer misleading or incorrect information related to product safety. As per Australian Consumer Law, the goods and service purchased by consumer come with a guarantee and the consumer have the right to ask refunds if the good is found to be defective. As per the Australian Consumer Law, the consumer has the right to claim a refund from the organization due to injuries caused by its products.
Safety of Employees
In case of Mr Berhane vs Woolworths, Woolworths face is breaching of duty of care. Woolworths need to pay his former worker a penalty of $ 231,000 as the employee claimed compensation from Woolworths for his personal injuries. In this case former employees win the case and he is entitled to be paid $230k (abc.net.au, 2017). The employee stated that Woolworths indulged in breaching a duty of care as it pushed him to work faster for meeting its performance targets. As per the Fair Work Act, 2009, section 104, the employee is entitled to receive compensation for the injury caused in the workplace. As per this Act, the employee is entitled to pay compensation to the employee if he suffers from any kind of serious injury in the workplace. Similarly, as per, Workers Compensation and Rehabilitation Act, 2003, the employer cannot dismiss their employees within 12 months provided they suffer from work-relatedinjury(worksafe.qld.gov.au,2019). As per this Act, Woolworths is entitled to take the former employee in his job as the person is suffered from a shoulder injury that is caused by the workplace. As per the Work and Health Safety Act, 2011, the employees are entitled to pay a penalty of $ 300,000 provided the duty holder is endangered to death or serious injury (worksafe.qld.gov.au, 2019). Similarly as per Work Health and Safety Act, 2011, the employer or organization is entitled to pay employees $ 1.5 million provided they fail to comply with health and safety duty. These acts ensure that the safety of employees are maintained and they are compensated as per the hours worked and achieve compensation for the injury caused in the workplace.
Data Protection and Security
Another legal risk that Woolworths is entitled to face is hacking and phishing of its customer personal information. As per, Privacy Act, 1988, the personal information such as individual signature, details of bank account, address, medical record and mobile number needs to be kept private by the organization (Oaic.gov.au,2019). The major legal risk that Woolworths face is hacking and phishing of information of customers thereby affecting the reputation of the organization. As per the Privacy Act, 1988, the data collected by the organization needs to keep safe and protected by the organization. The online sales lead to leakage of personal information thereby affecting the reputation of the organization. The collecting of high-level information related to customers can result in the decline of online phishing of information.
As per Taxation Administration Regulations, 2017, the retail industry is c compelled to pay tax to the government for the goods and services sold (Legislation.gov.aus, 2019). Woolworths may face legal risk if the company does not pay the tax for the respective years. As per Taxation Administration Regulations, 2017, the tax to be paid by the retailers whose income is more $500 million is entitled to pay income tax to the Government of Australia (Woolworthsgroup.com.au.2018, Annual Report). In addition, another problem that Woolworth's face is related to the regulatory environment that is the increase in online sales may lead to driving costs related to trade and tariffs. This leads to creating hypersensitive markets and price wars in Australia. Woolworth's reputation may be affected due to non-compliance of laws and procedures of Government of Australia.
Reasons and Implications of legal risk to Woolworths
Woolworths needs to obey the laws and legislation to avoid the issues of disobedience of law in the present and upcoming days.
Short term risks:
1. Risk of penalty: Woolworths need to implicate the laws and legislation to avoid the risk of penalty. If Woolworths do not abide by the acts and laws, the organization may have to face the risk of penalty as prosecution. Recently Woolworths had been penalized as the laws of the Corporation Act (2001) and the Work and Health Safety Act (2011) were not implemented and abided by this organization. The amount of penalty is very high; hence both the penalty drew a massive change in Woolworth's capital.
2. Risk of safety: with the aim to prevail the workplace health and safety, the organization needs to abide by the norms. The Work and Health Safety Act will assist the organization to manage the safety-related issues of the employees in the workplace. These laws will empower Woolworths to minimize the risks of workplace injury, minor or severe accidents and safety-related issues of the people engaged in the workplace.
3. Risk of conflict: The disobedience of general rules and regulations will create issues of conflict between the employees and the managers. For instance, if the Work Health and Safety Act or the Privacy Act is not implemented, this will give birth to the objection of the employees and stakeholders and will bring conflict between the organization and its stakeholders.
4. Risk of unethical culture: Woolworths need to implicate the legislation to ensure the existence of ethical culture and morale in the organization. If the organization will not be strict regarding the laws, the employees, suppliers may get uncontrolled and hamper the organizational discipline. The disobedience of the authority will bring the opacity to the stakeholders or the employees to break the discipline of the organization and the organizational culture will be unethical. Hence, Woolworths need to implement the laws within the workplace to avoid the risk of unethical culture and indiscipline.
5. Risk of employee turnover: when the employees will feel that their organization is not concerned about their security, safety, and rights, they will be detached from their organization. Woolworths is experiencing the issues of lack of employee engagement. Lack of employee engagement is resulting in the rise of employee turnover rate. Hence, to reduce the increasing rated of employee turnover, Woolworths need to implement the laws.
Long term risks:
1. Risk of bad impression: The disobedience of laws and acts may result to deteriorate the impression or brand name of Woolworth's group. If the Fair Work Act, Work Health and Safety Act, Privacy Act, Taxation Administration Regulations are not implemented by the organization, people will have a perception that the organization is not ethical and disciplined. This will destroy the organization's brand name.
2. Risk of lower customer loyalty: The Deterioration of organization's impression and brand name will directly affect its customers. The customers will lose faith in the organization and hence the customer engagement and customer loyalty will be disrupted. This is a long-term risk of insubordination of laws. If the company losses customer loyalty, the target market of Woolworths will be decreased, consequently, the revenue generation will also be decreased.
3. Risk of the downfall of business: Downfall of business growth is also a future consequent of disobedience of law. This is the summation of all the consequences of disobedience of laws. If Woolworths will not abide by the legislation, the employee turnover rate will be increased. Additionally, this will give birth to the conflicts between the organization and the stakeholders. Consequently, the organizational activities will be hampered and Woolworth will face a number of issues regarding their business (Mswela, 2016). Moreover, the deterioration of the brand name will decrease customer loyalty. As the organization will lose its customers, the revenue will be decreased. As a result, the company will not have adequate capital to invest in future business expansions. Ultimately, Woolworths will experience a downfall of business growth.
4. Risk of license cancellation: the Australian government has developed regulation of cancelling the trade license of the companies if the basic norms, laws and legislation are not abode. Hence, Woolworths may face the issue of cancellation of business license if the laws are not abode. To ensure the existence of a trade license, Woolworths needs to implicate the legal norms. Moreover, as per the Taxation Administration Regulations, 2017, the organization has to be penalized and stop its sells activities if the organization does not abide by the taxation law. Hence, to ensure a smooth and continuous flow of business activities, Woolworths has to be accountable to maintain the laws.
5. Conflict with other competitive organizations: The disobedience of the Competition and Consumer Act, 2010; the organization has to conduct fair-trading to maintain competition in the business market and protect customer rights. If the laws are not successfully implemented, there will be a conflict created within the competitive farms. Hence, Woolworths need to implement the laws to sustain peace within the competitive farms.
Woolworths need to implicate the laws and regulations to avoid the present and upcoming legal risks.
Strategic Options for Management
Strategic options making is the method of producing a preference of probable upcoming strategies. Strategic option is a major stride in the plan setting up procedure. It takes part in creation of strategic choices, e.g. development, attainment, diversification or awareness, assessment of the choices to measure their comparative qualities and viability, choice of the alternative that the organization will follow. It can happen that the organization may choose more than one strategy chosen though there is a possibility of an inbuilt risk or drawback to any alternative chosen. Even though there are methods for examining detailed options, the choice is often biased and expected to be prejudiced by the morals of managers and other groups with awareness in the organization. With such awareness to settle on the scale and path of an organization, options also have to be prepared concerning how to accomplish the objective. For such, 5 key qualitative portions should be evaluated when allowing for strategic choices: reliability, strength, viability, business threat and elasticity (Mswela, 2016).
There are certain problems that Woolworth faces where losing their loyal customers is a notable problem in future scope of the organization. The entire impact of the issue creates a very strong drawback on the total sales revenue of the company. Woolworths known for their global relation building with customer with their online shopping options; thus losing their valuable customers could thus hamper their business in the online market industry ( Legislation.gov.au,2019). Apart from that there are certain legal issues that the organization are suffering with and have planned some strategic options to manage and resolve those issues from future hindrances. The strategic options are:
1. Business-secret observance officer: Woolworths like other companies also have their elusive property of patents, ownership, brand name and business information and secrets symbolize the majority of their significance. They have processed a business-secret observance officer to safeguard their trade secrets from unnecessary leaking.
2. Misleading and False Representation of product: Woolworth was alleged due to the false statement on their products and misleading the customers. Thus, legal cases and police warrant was charged against them and their reputation falls significantly. To avoid such misleading, customers must ensure that they-
- Never neglect important information of the product
- Buy products with clear and justified price.
- Never fabricate the quality and ability of a product
3. Safety requirements: Woolworth faced the risk of employee safety and even privacy related threats. To prevent these Woolworth initiates strategic options to regular inspect their employee's performance and provide staff training. The following are some of the strategies Woolworth implemented:
- Employee training facility
- Recruiting skilled staffs for the organization
- Conducting safety assessment regularly in the workplace
4. Taxation issues: Woolworths as a renowned e-commerce organization has a huge customer base worldwide. Their annual earnings and sales revenue is also significantly high and thus the requirement of submitting tax to the government is regularity. The company imposed:
- A pledge to conformity with the strength as well as the correspondence of the taxation and set of laws in the nations they currently deal with
- A assurance not to relocate value shaped to tax reducing jurisdictions
- The employ of tax laws planned for tax evading
- An intention to shift pricing
- Implementation of tax havens
The cost benefit analysis is based on the recommendations provided for Woolworths focusing on the legal risks that they face. As per the recommendations, they need to hire skilled workers, implement high level software and tools and also provide risk assessment training to the employee. So the CBA table is build up synthesizing on those requirements and the benefits that the company will earn after successful implementations of the requirements. The total cost calculated is of $2, 32,655 which is a sign of profit as compared with the budget $3, 10,000 and the benefits i.e., $4, 84,000.
A vital strategic investigation of Woolworths has been conceded with an outlook to measure the significant strategies implemented by Woolworth and the presentation of whole investigation has showed that Woolworths is determined especially in the direction of achieving elevated growth and sales in its process. This growth is principally acknowledged by its sturdy commitment in the direction of its consumers and the workers. The study of the legal risks and legislations related issues as dealt by the Australian e-commerce and online retail industry point outs that the reasons such as political circumstance which is mainly turning governmental impacts, altering social ways and trends within the purchaser and also the unfavorable financial circumstances including exceedingly spirited business surroundings have each and every one exaggerated the strategy and development of Woolworths in a depressing way. The investigation also analyzed that the in-house state of affairs have also influenced the development prospective of Woolworths and by following all the strategies, the subsequent recommendations are measured to be crucial:
- It is suggested that Woolworths must plan at framing its plan consistent comparing with the biased conditions as rampant across the Australia.
- It should plan for initiating the strategy option of fair price policy in their products.
- Woolworths should aim at doing incessant improvement and this meticulous factor must be incorporated as an important part the strategy plan. This is generally because the customer communal trends and choices are screening enthusiasm which can be well addressed by allowing this approach of elevated growth.
- The suggestions to Woolworths strategy options also includes that it must focus in the direction of advance enhancing it's sustain from expert employees by providing added training and improvement method to its consumers.
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