Author: Andre Coleman

The annual budgeting process has been criticised as a cumbersome process which occupies considerable management time; concentrating unduly on short term financial control; having undesirable effects on motivation of managers; emphasising formal organisation structure.

Introduction

A budget is a quantitative measurable long term plan with specified corporate goals set to be achieved within a specific time period. The annual budget is usually divided into sub-plans usually quarterly and is based on an annual strategic business plan. It is formulated by following a process that requires careful analysis and evaluation of organizational objectives, alternatives, strategic options, decisions and actions and implementation of objectives as well as monitoring of results. The comprehensive nature of the budgeting process thus require participation of managers and executives who are responsible for the planning of actual operations, coordination of activities, communication of plans to responsibility centres; motivate managers to achieve budget goals; controlling activities; and evaluating performance. In all of these processes and activities, one notices the conflicting roles of budgets that involve planning, motivation and performance evaluation (Drury 2004). Due to these conflicting roles of budgets, in the recent years critics are of the opinion that the annual budget process is merely a waste of resource and a burden to management rather than enabling them to control their management environment. In the following discussion the researcher shall discuss the factors concerned and offers some recommendation for improvement of the annual budget process.

Discussion

a. Management time consumption

Conventional annual budget process is a quantified plan prepared and approved to define the course of action and activities to be carried out during a specified time period utilizing certain amount of resources to achieve given objectives (Drury 2004). The process deals with projection of activities, contingencies, strategies and interaction of processes within an organization. Budgets are also controls in the planning process to ensure the organization does not deviate from its financial and operational goals. These activities and processes require extensive analysis of organizational processes; plans for targets to be achieved by individual departments and by the overall organization; and results expected to be achieved etc. Consequently, one observes that the annual budgeting process is a complex and tedious process that requires top management directives and participation of lower management and staffs. Not only this but according to Jeremy Hope and Robin Fraser (2003) the traditional budget process require four to five months for completion and efforts of 20 to 30 percent of the manager’s time.

Furthermore, traditional budgeting is based on incremental budgeting whereby expenditures or revenue estimations are based the increments on the previous outcomes, and does not necessarily reflect the need of the environment in which the firm operates resulting in unachievable targets and undesirable outcomes. To resolve modern day organizations are focussing more on rolling forecasts and driver based budgeting models which are concentrated on participation and usage of drivers that operate the organization (Hunt 2003).

b. Short financial control

Another aspect of the annual budget process is that it is divided and based on quarterly objectives and results. Whether the organization is segmented into profit centres; cost centres; revenue or investment centres, the basic premise is that each of these centres are responsible for the designated outcome set by the annual budget. The overall outcome is estimated based on the quarterly results. The objective for quarterly results is to enable management to estimate expected results at the end of the year and also to use budgets as financial controls to counteract deviation, if there are any before the situation proliferate out of hand. Yet this very factor not only takes up a lot of management time but it also forces managers to dedicate significant time to target achievements, financial objectives and compliance with the process therein instead of concentrating on management excellence.

c. Undesirable effect on manager motivation

The pressure to deliver as Hope and Fraser (2003) note force managers and their teams to concentrate on sales targets; customers order of goods whether they want it or not; and achieve financial objectives. There is less and less time for managers to concentrate on team building; motivation; performance level; evaluation; or even time for designing effective and productive departmental structure to achieve better results. For this reason budgeting process tend to motivate managers to set their objectives to financial objectives and deliverables rather than on working as a team. The managers are thus the gatekeepers while the team members are forced to become dissociated from the organization’s structure.

d. Emphasis on formal organizational structure

Given the emphasis on extensive and detailed planning at the departmental level, it is imperative that organizations have formal structure so that budgeting process can be integrated into the forecasting and goal achievement activities. Formal organizational structure is also required for building and approving budgets through communication and coordination. Managers are therefore expected to align day to day activities with organizational strategies and budgets in order to achieve the desired objectives. Without a formal organizational structure, it would be difficult for the management to have a control over operational activities and financial consequences therein.

Conclusion

Given the above discussion, the researcher deduce that the annual budgeting process is a tedious process that eats up the time of management and lower staff alike without much productivity. The reason for this low productivity despite well planned budgeting is because of the long process that entails and the nature of the budgeting process. Budgeting from a top down approach is usually an imposition rather than participation. In modern day organization participation of team members, managers and supervisors with the top management is imperative for efficient operation. Dictated objectives and plans do not help in this regard. For this reason many organizations are changing their approach to budgeting by focussing on operational outcomes and inputs to fixate targets reinforced by incentives rather than outlined targets to be achieved without any motivation. As McGregor indicate in his Theory X/Y human beings are liable to work better if their desired motivation are in place (2005) and they are satisfied. Similarly, effective organizational planning in the form of budgets should be based on firm’s ability to respond to change and more importantly on the satisfaction of those who are responsible for carrying out the plans. Increased participation not only encourages responsibility but also makes accountability easier as individuals feel they are responsible for the operational outcomes. They are not bogged by the imposed accountability (Hunt 2003).

References

McGregor, D. 2005, The Human Side of Enterprise, Annotated Edition. McGraw-Hill.

Drury, C., 2004, Management and Cost Accounting, London: Thompson Business Press, 6th Edition.

Hope, J. and Fraser, R. Feb 2003, Trash The Budget. Optimize, Issue 22.

Hunt, S. Aug 2003, Budgets Roll With The Times. Optimize, Issue 22.

Systematic approach to recruitment and selection, and its efficacy in attracting diverse workforce within the equal opportunities employment legal framework

Introduction

In modern organizations, diversity management has become synonymous with fair and equal opportunities employment, even though traditional context of equal opportunities is closely related with legal aspects of treatments of potential and current employees. Today, diversity management activities are grounded in monitoring of direct and indirect discrimination and interventions to reinforce fair treatment of women, ethnic minorities, the aged and the disabled. Therefore, the fairness paradigm has become the benchmark for managing differences and must be congruent with business objectives. This paradigm emerged from the perspectives that organizations need a diverse workforce to re-think and re-define primary tasks related to strategies including organizational objectives, goals, markets, products and resource allocations (Cornelius, Gooch and Todd in Noon and Ogbonna 2001). Diversity management is different from equal opportunities, yet it is based on the same foundation. Equal opportunities amplify policies and practices that reflect the external legal framework and offer chances for competition. In human resource management, this is usually inherent in the practices of recruitment and selection, and at times in training and development. The basic premise is to ensure that equal opportunities should be given to people who are in competition with each other for areas of employment and selection, regardless of their age, gender, race or disability. The objective is not to elicit equal outcome.

When implemented within the organizational framework that follows systematic approach to human resources management, the fine line between equal opportunities and diversity management, at times, becomes blurred. Consequently, organizations are often found striving for a balance in maintaining diverse workforce within the realms of the equal opportunity laws to achieve equality and organizational strategic objectives. Given the blurring definition of diversity and equal opportunities in employment, critics find systematic approach to recruitment and selection less appealing as strategic human resource management component. Others argue that as a critical component of HRM, recruitment and selection accommodates for both external and internal environmental change. In the ensuing discussion, the researcher shall evaluate the extent of the validity of this debate, and determine how attractive systematic approach to recruitment and selection is in acquiring diverse workforce in organizations, and how successful organizations have been in integrating equal opportunities practices.

Critical Evaluation of Systematic Approach to Recruitment and Selection

Recruitment and selection processes are essential for strategic HRM involving and including job identification, job description, interviews, selection and orientation. It involves complex techniques and skills that assist decision-makers in selecting applicants for achieving organizational objectives, as well as personifies the organizational values, culture, behaviour and discipline. Recruitment and selection processes are based on systematic evaluation of personal and professional values, interpersonal skills, problem solving ability, attitude and behaviour of candidates, and testing them whether their attributes are congruent with the organizational values and objectives. Testing the type of employees the firm is about to hire helps determine the type of personality and how to mould them to the organizational culture. Selection decision is often based on a host of factors pertaining to job match, ability, professional qualifications, personal abilities, as well as employee’s personality to match with the organization (Cornelius, Gooch and Todd in Noon and Ogbonna 2001). This traditional approach (also known as systematic approach) has evolved over the years and become refined as strategic recruitment and selection processes. Traditional approaches to recruitment and selection in earlier organizations based on psychometric models often assess applicant’s performance with job fit whereas in modern organizations the systematic approach to recruitment and selection processes is strategic in nature, even though the foundation of the system has remained congruent with traditional approach (Beardwell and Holden 2003).

Experts (Beardwell and Holden 2003; Thornhill et al., 2000) believe modern systematic approach to resourcing organizations has harmoniously integrated overall organizational strategies and processes rather than merely focusing on job-specific criteria. As a result, recruitment and selection processes have strategic implications, starting from how resourcing offers competitive advantage in the short run to valuing employees as organizational assets. The processes are aimed at achieving organizational objectives aligned with long-term organizational strategic vision. Components of systematic approach to recruitment, which include job analysis, job descriptions, development of competence frameworks, identification of person specifications and accountability, as well as advertisement, executive search, and Internet recruitment provide alternatives and ease to the process of recruitment for organizational resource acquisition.

Alternatively, traditional approach to selection has remained somewhat similar to the preceding methods. For example, earlier recruitment processes have heavily relied on evaluation criteria, reliability on validity of candidate information, techniques of interviews and psychometric tests. Selection has also been based on matching job types with work styles through simulated evaluation tests. Today these components of selection are conducted in the same manner but often aided by the use of information technology systems and refined by integration of organizational objectives. Nevertheless, the fact remains – recruitment and selection processes play critical roles in resourcing organizations and pooling of work skills. According to Beardwell and Holden (2003), HRM processes such as recruitment and selection are no longer viewed as the “best-fit approach” but have changed to “resource-based view” or “best practice approach”. This makes them imperative for supporting corporate strategies and organizational change management by acting as a lever for competitive advantage for organizations.

Not only this, systematic approach to recruitment and selection has been set out to enable organizational management to establish frameworks for performance management. It is at this initial stage that managers determine roles, responsibilities, and performance outcomes to match with the most suitably skilled and motivated candidates for achieving organizational objectives. Moreover, basic principles for systematic approach to recruitment involve setting competitive framework for candidates to gauge future performance. For instance, evaluation and testing processes involve simulated tasks, psychometric tests, and validation of qualifications. It is through these simulated tests that managers gauge attitudes, behaviours, personality, and interaction with the candidates to determine job and candidate match. Selection is based on merit defined by the job specifications, individual commitment, and suitability for the positions within the company. The objectivity is to combine worker attributes, skills, and abilities, and fit it within the organizational policies, procedures, and cultural frameworks, and thereby not to waste efforts and resources in conflict, power relations, subordination and normative institutional clashes in the future (Lucas 2003).

In this regard, one could observe that systematic approach to recruitment, selection integrates external environmental factors like legal frameworks in policies, and procedures to ensure organizations establish a direct relationship with the candidates, job market and the legal environment. From this perspective, systematic approach to recruitment and selection processes is also said to have contributed to promoting and establishing trends for fair employment. However, critics do not have a consensus on fair distribution of representations of individuals where recruitment and selection processes are concerned. For example, Cornelius, Gooch and Todd (2001) are of the view that traditional equal-opportunity practices usually have unequal outcomes, depending on the culture of the organization, as well as the type of workforce required for the job. For example, gender and age discrimination are likely to become issues for “unequal” employment in industries where workers are required to be male of young age such as the logging industry. Commitment towards equal opportunity for fair representation of groups of individuals in recruitment and selection processes does not add value but rather hinders achievement of organizational objectives. Consequently, systematic approaches to recruitment and selection are not really effective in resolving strategic HRM issues pertaining to establishment of legal frameworks. Yet, one cannot deny the fact that organizations have not benefited from the systematic approach to pursue fair treatment and equal opportunities for employment. It is the essence of the systematic approach to recruitment, which takes into account of the changing environment, as well as business strategies that makes it dynamic, and thereby is effective in resolving management issues of diversity.

Attraction of diverse workforce and implementation of equal opportunities employment

There are many factors that are responsible for making an organization attractive for employees. Organizational reputation recognized for its fairness, culture, wage and talent pool, for example, are attraction for candidates. Similarly, job attractiveness is also dependent on the processes of recruitment and selection, and goals and ideology of the organization. In most organizations today, having a diverse workforce is no longer a luxury but a necessity and even a competitive advantage. A diverse workforce is essential in pooling skills and qualifications for achieving organizational strategic objectives in today’s complex business environment (Sims 2002). Diversity, many claim, is distinguishable from equal opportunity as it serves the self-interest of organizations rather than social justice. It involves pursuance of policies that meet the demand of labour pool, and thereby gain the best qualifications from employees. It makes the economic justification for hiring individuals valuable in terms of business requirement, and labour market supply. It takes into account of the expressed need for employee satisfaction, which would lead to quality in productivity and increasing the talent pool direly required by dynamic organizations (Noon and Ogbonna 2001).

Diversity is intrinsically linked with equal opportunity, according to experts (Thornley 2003). They argue that the labour market is typically characterized by competition where individuals compete for employment based on commutative justice. Free competition is prevalent and the reward for it is employment. Candidates vie for positions in organizations through display of qualifications, academic performance, ownership of skills, attitudes, and positive behaviours. Employers, on the other hand, form benchmarks for employment based on organizational requirements, policies and procedures in recruitment and selection. Employers are also mandated to follow government policy to benchmark wages, inflation and competitiveness for fair distribution of income and wealth. The government controls fair distribution of income by implementing policies of equal employment opportunities to eliminate formal and informal discrimination based on gender, age, race and disability. In the UK, this practice is regulated by the EOC and through legal Acts often tends to constrain organizations for implementing fair employment.

Despite critical objections to the efficacy and strategic nature of systematic approach to recruitment and selection, management of organizations cannot deny the fact that HRM processes have integrated diversity and equal opportunities policies and procedures to avoid adverse effects of the law. The EOC has formulated laws such as the Employment Act 1989/2002, Sex Discrimination Act, Equal Pay Act, Disability Discrimination Act 1995, Race Relations Act 1976, Employment Relations Act 1999 and the Employment Equality Regulations 2003 to curb discrimination of applicants for employment based on their gender, race, age and disability. To ensure that these laws are implemented within organizations, organizations have started to invest heavily in HRM processes congruent with the prescribed legal frameworks set by the EOC and the government. For most organizations, investment in these processes are necessary for compliance, while for others it is the long-term objective-achievement efforts as they view making their organization attractive to potential talents a strategic activity in itself. Consequently, HRM processes have been devised based on objective testing of candidates. Recruitment and selection models used for evaluating job performance, personality tests, cognitive ability tests, as well as testing of job knowledge take into account of achievement and skill proficiency. Organizations no longer depend on individual interviewer impressions to select and match candidates based on qualifications matching with job criteria. Instead, candidates are being tested for their abilities, skills and knowledge correlating with job performance regardless of their sex, age, race or disability (Hough and Oswald 2000). Furthermore, organizations are also using integrity tests and self-reports to check reliability and validity of counterproductive work behaviours. These systematic methods of recruitment and selection are based on the premise that effective recruitment leads to smooth functioning of organizations and successful recruitment and selection is based on finding the right person with the right skills, expertise and qualifications for achieving organizational objectives and contributing towards organizational values. For this purpose, a fair and consistent system of recruitment helps lessen the burden of employee conflict, turnover, absenteeism and dismissals.

According to the Workforce Development Plan (2004) in the UK, for organizations to develop leadership capacity in their respective industry, they must develop skills and capacity of workforce, organizational performance management framework, pay and rewards system and, most importantly, ensure that equal opportunity and diversity practices are aligned with the entire recruitment and selection processes. The focus on abilities and aptitudes, and not stereotypes, would help lead to fair judgements about individuals based on their merits rather than their gender, age, race or disability (EOC 2006).

Conclusion

From the above discussion, one can conclude that the strategic nature of the systematic approach to recruitment and selection has made it the ideal tool for today’s organizations to gain a competitive advantage in acquisition of skills and a diverse workforce. Strategic HRM requires that processes be in line with internal and external factors affecting organizational dynamics. For this purpose, these processes have to be flexible to accommodate change in the business environment. Two of the main factors that have been affecting modern organizations are equal employment opportunities and diversity. Self-interest for competitive advantage, as well as legal mandates have motivated organizations to invest in HRM processes and techniques to promote diversity and equal opportunities employment. These are evident in the various techniques used in recruitment and selection tests, as well as policies for hiring candidates. The practice is not isolated but rather has become the benchmark for organizations to attract a diverse workforce and remain aligned with the legal framework. Despite critics’ arguments, one could conclude that the traditional approach to recruitment and selection in today’s organizations is objective in providing the required competitive advantage and strategic edge for competing in the highly dynamic business environment.

References

Beardwell, I. Holden, L. and Claydon (2003) Human Resource Management – A Contemporary Approach. Fourth Edition. FT Prentice Hall.

Employers Organization for Local Government (2004) Workforce Development Planning – Guidance Document – May 2004. Employers Organization for Local Government, Online accessed on 12 January 2007 from: http://www.idea-knowledge.gov.uk/idk/aio/4465769.

Equal Opportunities Commission (2006) Recruiting Staff Guidance for Managers and Supervisors, May 2006. Equal Opportunities Commission.

Hough, L. M. and Oswald, F. L. (2000) Personnel Selection: Looking toward the Future-Remembering the Past. Annual Review of Psychology. pp. 631.

Lucas, R. E. (2003) Employment Relations in the Hospitality and Tourism Industries. Routledge: New York. pp. 84

Millmore, M. (2003) Just How Extensive is the Practice of Strategic Recruitment and Selection? Journal of Management pp. 87

Noon, M. and Ogbonna, E. (eds) (2001) Equality, Diversity and Disadvantage in Employment. Palgrave: Basingstoke, England. pp. 32.

Sims, R. R. (2002) Organizational Success through Effective Human Resources Management. Quorum Books: Westport, CT. Publication Year: pp. 107

Storey, J. (1992) Developments in the Management of Human Resources, Oxford: Blackwell.

Thornhill, A., Lewis, P., Millmore, M. and Saunders, M. (2000) Managing Change: A Human Resource Strategy Approach, Harlow: Financial Times, Prentice Hall.

Thornley, C. (2003) “Labour market policy and inequality in the UK” in Industrial and Labour Market Policy and Performance: Issues and Perspectives (eds) Cofey, D and Thornley, C., Routledge: New York. pp. 83

STRATEGY IN PRACTICE – Amazon.com

Introduction to Strategy

In the Words of Johnson & Scholes (2002), Strategy is the direction and scope of an organisation over the long term which achieves advantage for the establishment through its configuration of resources within a changing environment and to fulfil stakeholder expectations. In some respects strategy can be seen as a reflection of the attitudes and beliefs of those who have the most influence on the organisation.

According to Lynch (2000), the essence of corporate strategy is the identification of the purpose of the organisation and the plans and actions to achieve that purpose. Corporate strategy is often perceived as one of the most critical managerial activities that bring together the organisation’s internal resources and its external relationships with its customers, suppliers, competitors and the socio-economic environment in which it exists. In his conceptualisation of the Strategy concept Lynch (2002) clearly identifies three distinct aspects that have been discussed below:

Resources Strategy – Companies, Businesses and firms hold or acquire a wide range of resources. A firm’s resources and capabilities include all the financial, physical, human and organisational assets used by a firm to develop, manufacture and deliver products or services to its customers Barney (1991). The purpose of strategy is to make the best use of the available resources so as to outperform competition.
Environmental Strategy – The term environment includes every aspect external to the organisation. No organisation can gain competitiveness with a lack of vision for its environment. Focus that is restricted merely to what lies inside the boundaries of the firm is best criticised as incomplete and insufficient. Organisations need to and must be in synchronisation with their surroundings. It is here that strategy comes to play a major role.
Adding Value – Lynch has stressed on the notion of value addition. Apart from the above corporate strategy must meet the need to add value to the supplies brought into the organisation. To ensure its long term survival, the organisation must take the supplies, add value to them through its operations and then deliver its output to the customers. The purpose of corporate strategy is to bring the conditions under which the organisation is able to create this vital additional value. It must also ensure that the organisation adapts to the changes in the environment so that it can continue to add value in future.

In essence Strategy provides Decision Support (Grant, 2004) “to the extent that decision makers are limited by bounded rationality, strategy in the form of guidelines and decision criteria can enhance the quality and consistency of strategic decision making. It also helps in better decision making by pooling together the knowledge of many individuals and by facilitating the application of various analytical tools.”

Strategy also acts as a Co-ordinating device. The many tools and components of strategy i.e. Vision, Mission, Objectives etc. bring together the entire organisation as a single locomotive headed in one direction. With all departments and personnel aiming towards the common goals, co-ordination can be achieved with greater ease. Strategy provides the organisation a target to work for. Strategy is forward looking; it establishes a direction to guide actions. It also sets aspirations for the company that can act as motivators for the whole organisation.

The strategy function, as is evident from above, permeates through all organisational membranes to pervade into all levels and is not restricted to any particular zone. Practically all authors in field of Strategic Management acknowledge the prevalence of varied levels of strategy. Johnson & Scholes (2002) believe that Corporate level strategy relates to “the overall purpose and scope of an organisation and how value will be added to the different parts (business units) of the organisation. It is also likely to be concerned with the expectations of the owners. It is the basis of other strategic decisions and may well take the form of a mission statement.” Corporate strategy deals with the ways in which a corporation manages a set of businesses together. (Grant, 1995)

Business unit strategy is about how to compete successfully in particular markets. Business Strategy deals with the way in which a single business firm or an individual unit of a larger firm competes within a particular industry or market.

Operational strategies are concerned with how the component parts of an organisation deliver effectively the corporate and business level strategies in terms of resources, processes and people. They deal with the day-to-day working of the various sections in a firm. Operational strategies are more about implementation than planning.

Thus, “Strategic management involves understanding the strategic position of an organisation, making strategic choices for future and turning strategy into action.

The strategic position is concerned with the impact on strategy of the external environment, internal resources and competences and the expectations and influences of stakeholders.

Strategic choices include understanding the underlying bases for future strategy at both the corporate and business unit levels and the options for developing strategy in terms of both the directions and methods of development.

Strategy into action is concerned with ensuring that strategies are working in practice.” (Johnson & Scholes, 2002)

This report aims to analyse the strategy in practice at Amazon.com. Amazon.com is one of the most successful e-businesses and undoubtedly the champion of all online retailers or e-tailers as they are often referred to. It has revolutionised the retail sector of business and is a subject of innumerable studies and research in the current e-commerce era.

The material used for study has been drawn from the Amazon.com case study^[1] and the web based portal for the company Amazon.com^[2]. The report shall use existing theory as a basis to realise how strategy has worked for Amazon.com in practice. Although it is challenging to capture every aspect of the organisation’s life so far, effort has been made to cite relevant examples so to get a glimpse of its strategic approach.

The Amazon.com Case

A summary^[3] of the Amazon.com case shall prepare the grounds to lay the analysis in the light of theories discussed. A number of strategic concepts shall be cited to gain deeper insights to particular issues.

With the explosive growth in internet companies’ market capitalisation positions, one would ask if some hype is at play. But the trend data clearly reveal that the internet is for real. According to Forrester research the total value of goods and services purchased online exceeded US$43 billion in 1998. Amazon.com believes that it is well positioned to capitalise^[4] on this growth.

According to Media Metrix 16% of web users visited Amazon.com’s stores in December 1998. ‘In a very short period of time Amazon.com has become one of the world’s most recognised brands’, said Jaleh Bisharat, Vice-president, Marketing, Amazon.com.

With Amazon.com’s current strategy combined with the ongoing recruitment of entrepreneurial top management team for each business segment, the challenge for Amazon.com is on the strategic implementation front.

Bezos had always been fascinated with technology. He came up with the statistic that the electronic world would grow at the rate of 2300% monthly. Bezos said, when something is growing that fast, every second counts.

Bezos considered selling a variety of products online, but he settled for books because the worldwide market is large, the price point is low and the range of titles is large.

Being unsure of the ideal location, Seattle was chosen because it was the location of book distributor Ingram, which has continued to provide 60% of Amazon.com’s books. Seattle also provided a favourable sales tax climate and a high-tech workforce.

“I know nothing about the book industry…I can get them to the customer and forget about bricks and mortar”, said Bezos in an attempt to raise funds for his venture.

After its entry into the market, Amazon.com had no significant rivals and there were no dominant traditional players. Even at this time Amazon.com was providing a powerful search facility as well as a host of services not provided by other online competitors. Analysts warned of a volatile internet sector with strategic plans constantly being revised.

Despite aggressive competitive entry, Amazon.com passed many milestones in 1997. The most notable of these was its ability to raise net proceeds of almost US$50 million in May. This enabled aggressive investment in building the business.

Amazon.com focussed on establishing its executive team, which included the recruitment of Richard Dalzell of Wal-Mart. In the same year, 1997, Amazon.com offered the lowest book prices anywhere in the world.

Extensive promotional relationships with other dominant internet players were concluded which reinforced Amazon.com’s momentum, e.g. Yahoo!, Excite, AOL etc.

In 1998 the company launched music, video and gift stores in the US and expanded operations to UK and Germany. Jimmy Wright of Wal-Mart joined the company in the same year.

Amazon.com’s expansion programme is evidence of a growth strategy via acquisitions, strategic relations and internal development. It received the Computerworld Smithsonian Award for having demonstrated vision and leadership in the innovative use of information technology. With its highly qualified top management team and the success trends, Amazon.com continued to enhance the total customer experience of shopping, giving them wider product range to choose from and more sophisticated services to complement them.

The case study then goes on to list the various achievements of the company. It also provides detail information on the financial and personnel aspects of the organisation. These details have been passed over as they are beyond the scope of this paper.

The Analysis of Strategic Practices

The Basic Approach

The Internet is one of the most fascinating products of the developments in information technology. It received mixed reactions from the public and the entrepreneurs. While most of them were overwhelmed with the possibilities and others called it “an over hyped mania”, only a few saw it as a business opportunity. Jeff Bezos had the vision that created “Ex ante limits” to competition (Peteraf, 1993) and gave Amazon.com the “First-mover advantage”.

Among the various lenses or attitudes towards Strategy that have been theorised, Amazon.com’s approach can be regarded as that of an Ideas lens. The ideas lens (Johnson & Scholes, 2002) sees strategy as a result of new ideas that can come from anywhere in the organisation. It promotes innovative thinking and does not inhibit experimentation. This is well evident in the very start-up of Amazon.com as an enterprise. Further, this approach is better characterised as “Emergent” than “Prescriptive” (Lynch, 2000). The dynamic nature of the internet environment makes a planned and prescribed approach unsuitable. Amazon.com’s strategy evolved largely during the course of its life depending on its position at that instant in time. In the words of Miles & Snow (1987) Amazon.com as an entity is a “Prospector” who looks for new opportunities and is willing to take risks to be able to exploit the same. Stated in general, Amazon.com’s strategy is an ambitious one.

Pattern of Strategy development

In his business development Bezos attempted a “Transformational change” in strategy through the creation of an entirely new service. The change resulted in success because it created new expectations that did not exist earlier; Amazon.com was ahead of its time. Further, the ability to convert the transformational change into a business winner comes from the fact that as the strategy for the firm was emerging, there was little mismatch between the intended and the realised strategy (Mintzberg & Walters, 1985). It is important to strike harmony among the understanding of the environment, identified opportunity, the strategy intended to capture such opportunity and finally the actual resultant strategy that was implemented. Without this happening, the transformational change would most often end in a failure.

Stakeholder Mapping

“Stakeholders are those individuals or groups who depend on the organisation to fulfil their own goals, and on whom in turn the organisation depends” (Johnson & Scholes, 2002). For Amazon.com the major stakeholders were its customers, investors and Jeff Bezos himself. With respect to the Stakeholder Mapping drawn up by Savage et al (1991) Bezos and the investors can be referred to as “Dominant Stakeholders” while the customers would identify as “Dependent Stakeholders”.

Environment

The internet industry is characterised by a high degree of “Changeability” (Lynch, 2000) i.e. there is a greater number of new problems and each problem is more complex than in other sectors. Moreover it is not very “Predictable” due to a high rate of change and uncertainty of future circumstances. This made Amazon.com’s business environment highly turbulent. As a new entrant Amazon.com had to cope with all these difficulties; but once settled these factors acted as “Barriers to entry” (Porter, 1985) for its competitors.

Culture

Culture within an organisation consists of the shared basic assumptions that have worked well enough to be considered valid and passed to fellow employees over time (adapted from Schein, 1985). It refers to “the way we do things around here”. While there can be several factors affecting the culture at a work place, in case of Amazon.com it is the ownership and technological factors. Jeff Bezos is the leader of the organisation and also the cultural head bringing in ambition and motivation to the organisation. The work practices, routines, plans, the entire business is largely governed by the technological abilities inside and the advancements outside the organisation.

The Cultural web is another important aspect that has a definitive impact on the strategy an organisation pursues. The Cultural Web (Johnson & Scholes, 2002) consists of the Routines & Rituals, Stories, Symbols, Power Structures, Control Systems and the Organisational Structure. For Amazon.com its brand name acts as a major symbol that binds together the various components of the system. It symbolises the scale of operations that Bezos aimed at, thus cultivating an aggressive work culture. If one was to draw out the power structure at Amazon.com, it would be a flat pyramid with Jeff Bezos at the peak. Although the investment came from outside, Amazon.com was his dream and “his” venture. He did not promise any profits in the first 5 years, but his faith in the idea won the investors’ confidence. All this clearly indicates the prevalence of a “Power Culture” at Amazon.com (Handy, 1993).

Key Strategic Highlights

Based on its first mover advantage Amazon.com was able to capitalise on the heterogeneity of its resources. It reaped benefits from the Ex post and Ex ante limits to competition (Peteraf, 1993). Its technological knowledge behind the search engine was imperfectly imitable for the competitors. Even if the rivals came up with substitute systems, the “first mover” position always allowed an edge in favour of Amazon.com. Employees and technicians at Amazon.com learnt to adapt and innovate better than the competitors, simply because the latter were merely copying what Amazon had done.

The Knowledge at Amazon.com was rare, valuable, not easily imitable and well organised to allow the company to enjoy a resource based competitive advantage over its rivals (Barney, 1995).

The technological skills were Amazon.com’s core competence that was used to create the Search facility – their core product which was at the heart of Amazon’s web based store/services – the end product (Hamel & Prahalad, 1990). However, it also needs to be mentioned here that the Amazon.com was rich in dynamic capabilities (Teece, 1997) to be able to successfully carry out the above. The top management team which consisted ex-Wal-mart employees, were aware of their strengths as well as the business environment to be able to identify their core competence. They ensured carrying out the best use of their resources and maintained the momentum gathered from the initial push. Even with the best resources and opportunities a business may not succeed, if those managing it are not aware of their responsibilities. It is the management that lays out the strategy and takes all decisions that are critical to the overall success.

Expansion

Given the knowledge of Ansoff’s Matrix Amazon.com for a start pursued Market development i.e. offered the existing products to new markets. It also used Cost leadership (Porter, 1985) to expand its customer base. As the website served more and more customers over time, Amazon.com introduced new products to the existing market – a product development effort. Finally, with a secure market position Amazon.com was capable of Diversification i.e. offering new products to new markets.

Not all of Amazon.com’s offerings were indigenous. It had partnered with several other wed based companies. While most of the early partnerships were aimed at gaining a greater exposure to the target audience, later excusive relationships were created to add to the existing list of products and services that were offered on the website. The motive behind these alliances was largely “Exploitative” (Koza, 1998). Such business alliances were primarily aimed at tapping into each others’ customer bases and render mutual benefits to the parties involved.

Amazon.com’s approach to collaboration is well explained by the M-B-A (Make, Buy, or Ally) matrix. It allied with services such as Yahoo and Excite because the service was not important to Amazon’s business – it sought more traffic. However, in case of similar companies such as Bookpages and Telebook, Amazon.com preferred a “Buy” because of the importance to the business activity. It also had the requisite skills to run these companies. Amazon.com did not want to allow these smaller companies to grow and later pose a threat to them.

Conclusion

Amazon.com can be easily regarded as a strategy champion. It had all the components of a great Entrepreneurial tale, and shall be cited in many more academic works in future. However, it must not be overlooked that for the first five years Amazon.com did not make any profits. Moreover, with the growth in market share, loss per share also grew. If all other competitors would have grouped together to attack Amazon from all fronts, it could have been a different story.

Essentially, Amazon’s first mover advantage was crucial. The fact that Amazon possessed the above resources and capabilities at the emergence of e-commerce is of vital importance. Therefore, it is questionable whether or not Amazon would have managed to achieve similar results if it were to launch today in 2004 in such a hypercompetitive market. Primarily, Amazon’s success was due to effective leveraging of its resources, especially knowledge and managing the capabilities derived from these resources.

REFERENCES

Barney, Jay B.. – Firm resources and sustained competitive advantage From: Journal of management vol 17 (1) 1991 p.99-120.
Grant, R. M. (Robert Morris), 1948- – Contemporary strategy analysis : concepts, techniques, applications / Robe.. – 5th ed – . – Oxford : Blackwell, 2004
Johnson, Gerry. – Exploring corporate strategy / Gerry Johnson, Kevan Scholes. – 6th ed.. – Harlow : Financial Times/Prentice Hall, 2002.
Lynch, Richard L.. – Corporate strategy / Richard Lynch. – 3rd ed. – Harlow : Financial Times Prentice Hall, 2003.
Mintzberg, Henry. – Strategy safari : the complete guide through the wilds of strategic manage… – Harlow : Financial Times Prentice Hall, 2001.
Mintzberg, H. and Waters, J.A. – Of strategies, deliberate and emergent Strategic management journal. – John Wiley and Sons Inc. Vol 6 (1985) p.257-272
Peteraf, M. – The cornerstones of competitive advantage: a resource-based view Strategic management journal. – John Wiley and Sons Inc. Vol 14 (3) 1993 p.179-191
Porter, M.E. – From competitive advantage to corporate strategy. Harvard business review – Harvard Business School Publishing Corporation, 1987
Prahalad, C.K. and Hamel, G. – The core competence of the corporation Harvard business review. – Harvard Business School Publishing Corporation. Vol 68 (3) 1990 p.79-91
Schein, Edgar H. (Edgar Henry), 1928-. – Organizational culture and leadership. – 2nd ed. – San Francisco, Calif. : Jossey-Bass, 1992. – (Jossey-Bass management series).
Teece, D. et al – Dynamic capabilities and strategic management Strategic management journal vol 17 (7) 1997 p.509-533
Whittington, Richard, 1958- – What is strategy – and does it matter? / Richard Whittington – 2nd ed – . – London : Thomson Learning, 2001 – – 1861523777
Footnotes

^[1] Amazon.com – from start up to the new millennium, Stockport & Street in Johnson & Scholes (2002)

^[2] www.amazon.com

^[3] This is a self prepared summary using the information provided in the Amazon.com Case study by Stockport & Street. The purpose of the summary is informative and allows connection with the report – it has therefore been included in the main text.

^[4] Such text in bold are exhibits of strategic highlights

Introduction to Scandinavian Civil Law

Scandinavian civil law applies to the five Scandinavian countries, namely Denmark, Sweden, Iceland, Finland and Norway. Historically, it has it roots set in Germanic law, but Scandinavian civil law is now more closely akin to the civil law of the common law countries such as the UK and Australia.

History of Scandinavian Civil Law

Scandinavian civil law has not always been recognised as a unified system of law for the five Scandinavian countries. Until the early 9^th century, Scandinavian civil law did not exist as a concept at all; instead, the five nations all had their own independent legal and administrative systems. Despite the five countries having their own systems, legally, they were all based on similar theories and it was not long until they started to merge into one body of Scandinavian civil law.

Initially, Scandinavian civil law was entirely unwritten; it was based on customs and social development that gradually became a codified system. The customary type of Scandinavian civil law was managed by group meetings which could be attended by all men. This system of Scandinavian civil law worked well until the 11^th century when the rules became too difficult to manage and some basic laws were codified into a written text. Generally, Scandinavian civil law was put together by private individuals, although increasingly the king became involved. By the 13^th century, the body of Scandinavian law was largely complete in its current form.

Scandinavian civil law became much more unified across the five countries, over the centuries. However, there were still differences regarding where the laws originated from. For example, the Gulathing Law originated from Norway, in the 11^th century, whereas the Law of Uppland came from Sweden, in the 13^th century.

These early laws formed the basis of future Scandinavian civil law; however, they were not in the same format as modern Scandinavian civil law. The first codification of Scandinavian civil law started with the areas of matrimony, property, inheritance and contract, although gradually this extended to cover the areas of administrative and criminal law. Religious law was dealt with entirely separately, with its own court and justice decisions.

Despite the early shift towards codifying Scandinavian civil law, the first common law system that was centrally arranged was actually criminal law, particularly in the area of manslaughter and blood feuds. Religious law also started to become intertwined into the Scandinavian civil law, primarily in order to ensure that assisting the poor was something written down in law.

Power also shifted towards the king, with King Magnus’s Swedish code of 1350 being the first of its kind, placing power on the King’s officials to manage the commencement of criminal proceedings. Although this only dealt with the criminal law element of the legal system, it was, nevertheless, the beginning of the Scandinavian civil system as we know it today.

By 1380, Denmark and Norway had come under the rule of one king, although the legal systems remained independent. This unification was the first step towards the Scandinavian civil law becoming one system. Over the next three hundred years, the Scandinavian civil law system gradually gained codification and unification across the two countries, influences of which filtered into the neighbouring countries.

The codes that were developed by the two Scandinavian countries were extremely well written and the envy of many of other countries. The wording in this code of Scandinavian civil law was both simple and easy to understand. Sweden was one of the first countries to accept the new code, actively, and it became clear that this was set to be the widely accepted Scandinavian civil law code.

Scandinavian Civil Law Today

Whilst the historic codes were both popular and widely accepted, the complexity of modern life has meant that Scandinavian civil law has more recently become regulated by more and more statutes. During this modern development, the five Scandinavian countries have all largely followed the same basic theories, yet have generated their own legal standards. Essentially, all Scandinavian civil law is based on the Swedish laws of the early 18^th century.

Although there is a degree of separation in terms of legal structures in the Scandinavian countries, there is still the agreement between the states to cooperate on matters of legislation. This agreement was entered into in 1872 and has become more and more important and the foundation of Scandinavian civil law as we know it today. Typically, areas such as commerce and contracts have always ensured that there is conformity amongst the Scandinavian states. One of the main benefits of having a largely uniform Scandinavian civil law is that trade and movement of both people and commerce is much more fluently achieved across the Scandinavian countries.

Scandinavian civil law is a unique blend of many different legal systems, although most notably German and French laws. This influence is primarily down to the way in which the law is taught in Scandinavia, with many Scandinavian based lawyers studying in France and Germany before returning to practise in Scandinavia. Despite the unique format of the Scandinavian civil law, it does largely follow in line with other European countries when it comes to matters of international trade and shipping.

Although it has been necessary for Scandinavian civil law to become suitably in line with other European states, the Scandinavian states have opted to stay as straightforward and close to real life practicalities, as possible. This is particularly evident when it comes to welfare law. In a similar way to the English law courts, the judges are largely responsible for making the law, although in a different way to the English courts. For example, there is no principle of binding precedent, which makes Scandinavian civil law particularly flexible and able to deal with changes is social needs as and when they arise.

Scandinavian civil law is very flexible, yet sufficiently structured to allow the Scandinavian states to compete on an entirely level footing with other European states for the purposes of commercial contracts. Many legal theorists believe that Scandinavian civil law is, in fact, a model code which should be considered by many other modern countries across the world.

Brief 187810

Sale of Goods/Consumer Protection question

To:Mr Supervisor

From: Richard Ross

Re: Graham Marshall – The Pine Tree

I met with Mr Marshall of The Pine Tree on 28^th February 2006.

Mr Marshall explained that he was being pursued for a claim by The Wine Imporium in respect of 3 items that he had ordered on 2^nd February 2006.

Mr Marshall ordered the following items:

A bottle of vintage port, priced at ?1,500
2 dozen bottles of Eldorado sherry at ?800
5 litres of Shangri-La wine at ?900

The Wine was to be purchased for Mr Marshall’s business, which is a restaurant.

It was agreed that the port and sherry would be delivered on 8^th February; but the goods were destroyed in a fire at the Imporium’s premises, and the goods were therefore not delivered. Despite this, the Imporium have issued an invoice dated 10^th February 2006, and are seeking payment of ?3,200. He is now being pressed for payment and has received a letter from solicitors acting for the Emporium (a copy is attached to this report).

Mr Marshall also purchased 5 dozen wine glasses, again for his restaurant at a cost of ?60. These items collected by Mr Marshall.

My view of the legal position is as follows:

There is a distinction between ownership and possession. Clearly, at the time of the fire, the Emporium were still in possession of the goods, but who owned them at that time is a different and more complex question.

The transfer of ownership has important legal consequences. It is of significance when considering who is liable when goods are damaged. The general rule is that risk of loss normally passes from seller to buyer at the same time as property legally passes. Therefore, if property has passed to Mr Marshall as at 7^th February 2006, he will bear the loss, and have to meet the Emporium’s claim.

The Sale of Goods Act 1979 (“SOGA”) contains detailed rules governing various aspects of transfer. The time when property is transferred is dealt with by Ss 16-19.

Section 20(1) SOGA deals with risk and provides that:

“Unless otherwise agreed, the goods remain at the seller’s risk until the property in them is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not.”

If Mr Marshall dealt as a consumer, this position would be varied by the Sale and Supply of Goods to Consumers Regulations 2002 (“The Regulations”).

S4 of the Regulations amends S20 SOGA. It provides that after subsection (3) there is inserted-

“In a case where the buyer deals as consumer …, subsections (1) to (3) above must be ignored and the goods remain at the seller’s risk until they are delivered to the consumer.”.

A “consumer” is defined in the Regulations as “any natural person who, in the contracts covered by these Regulations, is acting for purposes which are outside his trade, business or profession”

Mr Marshall was however buying the wine for his restaurant, and therefore will not fall within the definition of consumer. In that case, the general rule in S20(1) SOGA will apply.

The relevant question is therefore whether as at 7^th February the goods had transferred to Mr Marshall. The basic rule is that property passes when the parties intend it to pass. This is reflected in S17 SOGA. However, this is subject to the overriding provision of S18 SOGA which provides separate rules for unascertained goods.

Therefore, whether goods have transferred will depend on whether the goods are specific, or unascertained goods.

Are the goods specific goods?

Specific goods are defined at S16 SOGA as “goods identified and agreed on at the time a contract of sale is made”. Goods can only be classified as “specific” if it is possible to identify the precise subject matter of the sale at the time when the contract is made. Any goods purchased as a self service purchase (as most consumer items in supermarkets are) will be for specific goods.

Unascertained goods are not defined by the SOGA, but will comprise of goods that are not specific. This will cover any generic goods, or goods that form part of a larger consignment, or come from a source which is specified in the contract.

The Shangri-La was to be taken from a case in the cellar of the Emporium, and therefore this is clearly unascertained, since it comes from part of a larger consignment.

The Eldorado sherry is specified by description, but it is a purely generic description, and again will be for unascertained goods. It is different to the example above of self service purchases, since the specific bottles had not been selected by Mr Marshall.

The situation with regard to the vintage port is more complex. Mr Smith of the Emporium told our client at the time of the sale that he thought that this bottle was the last remaining bottle. If that is indeed the case, then the purchase was for a specific bottle of port. It is my view that this is a contract for a specific item.

Specified goods

S17 SOGA reflects the common law rule that property in specified goods, such as the port, passes when the parties intend it to pass. This means that if there is a clause in the contract, such as a retention of title clause, property passes under the terms of that clause. It is also possible that this may be implied from the parties’ conduct, trade practice or custom, or any other relevant circumstances.

There is no express provision, and no relevant trade practice. A term may however be implied if, eg, payment is deferred – this may imply that property passes on payment. Payment in this case was not due on delivery, and therefore it is possible to argue that in the case of the vintage port, if it is indeed for specific goods, there was an implied agreement that the property; and risk; did not pass until delivery. (confirmed in Dobson v General Accident co Ltd^[1]

Diplock LJ indicated in R V Ward Ltd v Bignall^[2] that the courts will be very ready to infer an intention that property will not pass until delivery; thereby ousting the statutory rule.

If this argument fails, the point will be governed by S18 SOGA. This sets out five rules, which govern the situation. The first three relate to specific goods, and the first is the basic rule.

The first rule states:-

“where there is an unconditional contract for the sale of specific goods in a deliverable state, the property passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.”

“Unconditional” means that there is no term in the contract postponing transfer until one of the parties performs a specified act.^[3]

In Underwood v Burgh Castle Brick and Cement Syndicate^[4] it was held that an engine which was cemented to the sellers floor at the time the contract was made was not in a deliverable state until it was dismantled and ready for transport.

There is nothing however in Mr Marshall’s case to render the contract conditional, and therefore the contract is unconditional.

Therefore, if the port is specified, with no express or implied condition, then risk passed to Mr Marshall on 2^nd February 2006. It is however my view that, because payment is delayed, a court would infer a term that property (and risk) did not pass.

(The remaining three rules are not relevant to Mr Marshall’s case, and only apply to goods not in a deliverable state at time of contract; or where the seller needs to do something to ascertain the price (eg weigh the goods) or where goods are bought on approval.)

I would also comment that the statutory rule will only apply if the damage was accidental. S20(3) SOGA provides that “nothing in this section shall affect the duties and liabilities of either seller or buyer as a bailee of the goods for the other party”.

There is however no evidence to suggest that the fire was not accidental.

Unspecified goods

In the case of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.^[5]

Rule 5 of S18 SOGA will therefore apply to unascertained goods. This applies where no contrary intention appears, as in this case. The rule states:

“1.Where there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, te property in the goods then passes to the buyer and the assent may be express or implied and may be given either before or after the appropriation is made.

2.Whether in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee…for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is to be taken to have unconditionally appropriated the goods to the contract.”

This means that the goods remain unascertained, and risk remains with the seller until the goods are:

in a deliverable condition, and
unconditionally appropriated (ie irrevocably earmarked),

Pearson J stated in Carlos Federspiel & Co SA v Twigg (Charles) Ltd^[6] that to be unconditionally appropriated, “the parties must have had, or be reasonably supposed to have had an intention to attach the contract irrevocably to those goods so that those goods and no others are the subject of the sale and become the property of the buyer”.

In that case, bicycles were packed up and labelled, and shipping arrangements had been made by the seller. The goods had also be paid for by the buyer, when the seller went bankrupt. It was held that at the time the seller went bankrupt, the goods had not been appropriated, and the buyer had no title. This is because the seller could have changed his mind before he handed the goods over to the shipper.

0

In Hendy Lennox v Graham Puttick^[7] it was held that appropriation took place once the sellers had assembled the generators and the buyers received invoices and delivery notes indicating the serial numbers.

Therefore, the seller must perform an act which puts the goods out of his control, so that he cannot use them to perform another contract.

We do not know whether the goods had been selected ready to be delivered to Mr Marshall. However, there is no evidence to support the fact that the goods have been irrevocably attached to the contract; certainly there is no consent to such an attachment by Mr Marshall. (In order to pass property, the appropriation must be made with the express or implied consent of each party).

Goods purchased from a bulk source may however become ascertained by exhaustion. This will be relevant to the Shangri La wine, which was to be purchased from a cask in the cellar of the Emporium. If that cask only had 5 litres left in that case, that wine would have been unconditionally appropriated to the contract.^[8] This is however unlikely.

I therefore conclude that as at 7^th February 2006, the goods had not been appropriated to the contract, and therefore at the time of the fire, the goods remained unascertained. Risk in the unascertained goods remains with the Emporium.

(I would mention for completeness that The Sale of Goods (Amendment) Act 1995 creates an exception to the rule relating to goods where the bulk is identified in contracts; but only applies where the buyer has paid for some or all of the goods. Its aim was to protect buyers who have paid for goods, and the seller subsequently becomes insolvent. It will not be relevant here).

Overview

It is my view that in all probability, the vintage port will be a specified item. Since payment is delayed until after delivery, I believe that risk will have not have passed at 7^th February 2006.

The wine will have been ascertained if it was the last 5 litres in the cask, but this seems unlikely. Therefore, both the sherry and wine were unascertained goods, not unconditionally appropriated to the contract as at 7^th February. Under S16 SOGA, no property passes until goods are ascertained, therefore risk again remained with the Emporium.

Frustrated contracts

Where goods perish whilst still at the sellers risk, he is not able to perform the contract – he cannot insist on the buyer accepting other goods without the buyers consent. Common law rules of frustration and mistake may excuse a seller from liability if performance becomes impossible.

Ss 6 and 7 SOGA contains rules that are broadly analogous to the common law rules of frustration. Where they apply, the common law rules are displaced.

S6 SOGA provides “where there is a contract for the sale of specific goods, and the goods without the knowledge of the seller have perished at the time when a contract is made, the contract is void.

(S6 is equivalent to the common law rule of mistake)

In Mr Marshall’s case, the contract was made on 2^nd February, and the goods destroyed on 7^th February. This will therefore not apply.

S7 SOGA provides “Where there is an agreement to sell specific goods and subsequently the goods, without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is avoided.”

This is equivalent to the common law rule on frustration, and displaces the impact of the Law Reform (Frustrated Contracts) Act 1943 (the “43 Act”). Therefore, this Act does not apply to the perishing of specific goods, and therefore the contract is not frustrated.

I therefore conclude that, for any specific goods, which on the balance of probability will in this case be the bottle of vintage port, the bottle has been damaged after the contract is concluded, and S7 SOGA will therefore apply.

An item perishes if it has “so changed s to become an unmerchantable thing that no honest seller would sell” (Asfar & Co v Bludnell^[9]– a case where dates impregnated with river water and sewage were found to have perished)

The port has clearly perished. Therefore, the contract is avoided, and the Emporium cannot sue for the price.

Unascertained goods

The statutory rules only apply to specific goods that have perished. The wine and sherry do not fall into this category, since they are for unascertained goods.

The sherry is purely generic. This means that other sherry of the same description can be purchased and supplied (assuming they are still available). Therefore the Emporium must source more sherry from another source – or pay damages to Mr Marshall for non-delivery. There is certainly no requirement for Mr Marshall to pay for these goods before they are delivered.

With regard to the wine, the source has been specified in the contract. It is therefore impossible for the Emporium to supply the wine. S7 will not apply, because it is not for the sale of specific goods. The contract will therefore be frustrated under the 43 Act. This means that adjustments for expenses incurred, and benefits received are possible. However, in this case, there does not appear to be any such expenses or benefits.

Therefore, the Emporium must supply the sherry – or face a claim for damages for non-delivery. However, there is no obligation on either party with regard to the port, or the wine.

Wine Glasses

Property in the wine glasses has clearly passed, as has risk. Whether Mr Marshall can reclaim his money will depend on when the glasses were broken.

S14 SOGA contains implied terms about quality and fitness.

If the glasses were broken before Mr Marshall paid and took delivery of them, they were not goods of satisfactory quality^[10] and he will be entitled to a refund.

If the glasses were broken at a later date, it will be a question of whether the glasses were broken because they were faulty or whether Mr Marshall mishandled them. If the goods contained an inherent fault, it can be argued that they were not fit for purpose. S 14(2b) SOGA provides that to be of satisfactory quality, goods must be fit for all purposes for which the goods are commonly supplied. It goes on to state that goods should be free from minor defects, be safe and durable.

Therefore, if the goods were not safe and durable (to the extent that glasses should be expected to be) Mr Marshall would be entitled to a refund.

Conclusion

Mr Marshall has no obligation to pay any money to the Emporium at this stage. If the Emporium does deliver the sherry, he will then be obliged to pay the price; but not before.

Indeed, Mr Marshall may have a claim against the Emporium if they fail to deliver replacement sherry to him; and if the wine glasses were indeed defective.

Bibliography

Consumer Law and Practice, fifth edition – Robert Lowe and Geoffrey Woodruff, Sweet & Maxwell 1999

Law Reform (Frustrated Contracts) Act 1943

The Sale of Goods Act 1979

The Sale and Supply of Goods to Consumers Regulations 2002

The Sale of Goods (Amendment) Act 1995

Asfar & Co v Bludnell [1886] 1QB 123

Carlos Federspiel & Co SA v Twigg (Charles) Ltd [1957] 1 Lloyd’s Rep 241

Dobson v General Accident co Ltd [990] 1 QB 274

Hendy Lennox v Graham Puttick [1984] 2 All ER 152

R V Ward Ltd v Bignall [1967] 1 QB 534

Underwood v Burgh Castle Brick and Cement Syndicate [1922] 1 KB 343

1

Research Proposal

Provocation, diminished responsibility and the reasonable (wo)man; the implications of the Law Reform Commission’s recommendations.

Introduction

The crime of murder is one defined by the common law as the intention to unlawfully kill another human being with malice afore thought. Currently, in England and Wales the legal system does not differentiate between different ‘types’ of murder, such as first and second degree.^[1] There are however, defences available to defendants, which could enable either an acquittal (some general defences), or a conviction of some lesser offence (specific defences). Under the Homicide Act 1957 an individual can plead the defences of provocation, diminished responsibility or claim that he or she was involved in a suicide pact. If such defences are successful, this will have the result of bringing a charge of murder down to one of manslaughter and thus, termed ‘voluntary manslaughter’. The first of the two defences have developed a considerable amount of case law and many of these decisions have related to abusive relationships where the abused has killed the alleged abuser.

The law relating to the defence of provocation has held that an individual must have been provoked (by either words or actions), resulting in a total loss of self control,^[2] and that a reasonable person in the same situation would have acted in the same manner. The first two aspects of the defence have been referred to as the ‘subjective’ elements and the third part as ‘objective’. The so-called objective element has become more and more subjective in nature. In R v Camplin, Lord Diplock acknowledged that the test was not ‘wholly objective’^[3] and in the case of R v Smith (Morgan James)^[4] it was asserted that the characteristics of the defendant should be attributed to the ‘reasonable person’ and this includes not only characteristics that had bearing on the actual provocation, but also on the ability of an individual to maintain his or her self control. In context of the so-called ‘battered wife’ cases, the judiciary have also applied this principle.^[5]

The specific defences outlined above are justified on the basis that in some circumstances, the law should recognise that there are reasons as to why an individual should not be convicted of the more serious offence of murder and thus, subject to a mandatory life sentence. The issue with the provocation defence relating to an individual who has suffered long-term abuse, is that such individuals will not always be able to rely on it as there may be some aspect of pre-meditation. The law has also recognised that such individuals suffering from some ‘abnormality of mind’ may not be fully responsible for his or her conduct and therefore should be convicted of manslaughter instead of murder. The effect of abuse on an individual’s mental state can in certain circumstances, amount to an ‘abnormality of mind’ and thus satisfy the defence of diminished responsibility.^[6]

The purpose of the proposed research is to examine the current state of the law and look at the way in which abused women are dealt with when charged with murder. In line with the Law Commission’s proposals to reform the law of homicide, the research will also examine the extent to which the proposed change in the law will impact on this area. It is submitted that the current state of the law is not adequate in dealing with such individuals and it remains to be answered as to whether the proposals will make any real difference.

The Law Commission’s Consultation Paper proposes to maintain the defence of diminished responsibility and comments that there are no grounds for abolishing the defence based upon arguments that it gender discriminatory. The paper comments at one point:

“Was the abnormality of mental functioning really a substantial cause of the defendant’s conduct if other factors were at work? Or, were the other factors, jealousy, anger, a desire to dominate or punish, the real or predominant explanation, with the abnormality of mind being a minor background factor of inadequate moral significance to affect the verdict?”^[7]

The research will examine the defence of provocation and the so-called objective element in order to determine how this fits with the nature of a long term build up of abuse suffered by some women. Is there a true ‘loss of control’ in such circumstances and is it appropriate to attribute the full characteristics of such people to the reasonable (wo)man? Furthermore, by also enabling such individuals to plead the defence of diminished responsibility, as the above quote would seem to suggest, is the law simply ‘categorising’ these people to as their conduct is not viewed quite as seriously as a person who commits murder? Thus, the term ‘abnormality of mind’ is not one used in psychiatric terminology and the courts have been left to establish exactly what the phrase means on a case-by-case basis. It seems doubtful as to whether this is a sufficient approach for the law to take.

Objectives

Analyse the current law relating to the defences of provocation and diminished responsibility and establish how these apply to women in long-term abusive relationships.
Present the justifications for the defences and apply them in context of the proposed research theme.
Establish the proposed reforms in the area.
Critically analyse the proposed reforms in line with the research topic in order to determine whether they are sufficient.

Value of the Research

Add to the current academic debate in this field.
Establish the appropriateness of the Law Commission’s reforms.
Personal interest to the researcher.

Theoretical research based on literature search and critical analysis.

Sources:

Domestic legislation, cases in domestic and international jurisdictions
Books and periodical articles.
Law Commission Reports.
Statistics from the Home Office (relating to domestic violence/fatal offences from domestic relationships).
Preliminary Plan (Chapters)
Abstract
Introduction and overview of the topic
Analysis of the existing law on provocation/diminished responsibility
Analysis of the Law Commission’s proposals for reform
Conclusion (including any further suggestions for the direction the law should take for the future).

Essential Reading:

(As well as the most current academic text books on the subject)

Legislation:

Homicide Act 1957

Family Law Act 1996 – see Part IV relating to domestic violence provisions

Protection From Harassment Act 1997

See also the Law Reform’s paper: The Law Commission Consultation Paper No 177, A New Homicide Act For England And Wales?

At http://www.lawcom.gov.uk/docs/cp177_web.pdf

Cases:

Jersey v Holley [2005] UKPC 23 R v Mohammed [2005] EWCA Crim 180 R v Ahluwalia (1992) 4 All.E.R 889 R v Bedder (1954) 2All.E.R. 801 DPP v Camplin (1978) A.C. 705 R v Duffy [1949] 1 All.E.R 932 R v Newell (1980) 71 Cr.App.R. 331 R v Roberts [1990] Crim.L.R 122 R v Thornton (No.2) (1996) 2 All.E.R 1023 R v Richens (1993) 4 All.E.R 877 R v Humphreys (1995) 4 All E.R 1008 R v Morhall (1995) 3 All E.R 659 R v Luc Thiet Thuan (1996) 2 All E.R 1033 R v Smith (Morgan James) (2000) 4 All. E.R. 289 R v Keaveney (2004) LTL 22.04.04 Extempore – unreported – find it on Lawtel

Journals:

Toczek, ‘The action of the reasonable man’, (1996) N.L.J. 146, 835 Toczek, ‘Self-control and the Reasonable Man’ (2000) NLJ 150, 1222 Oliver, ‘Provocation and non-violent homosexual advances’ (1999) J.Crim.L. 63(6) 586-592 Thomas, ‘Sentencing: manslaughter – manslaughter by reason of provocation – manslaughter of spouse of partner’ (2003) Crim.L.R. June 414-417 Neal & Bagaric, ‘Provocation: the ongoing subservience of principle to tradition’, (2003) J.Crim.L 67(3) 237-256 Gardner, ‘The mark of responsibility’ (2003) O.J.L.S 23(2) 157-171

{N.B – Some psychology literature may be relevant on this topic – search the online journals for killing stemming from domestic violence.

Further research will also be needed to obtain further literature – search www.ingenta.com and your university library should be able to order any articles of relevance that they do not have on site/access to online journal. Also search for any recent reviews of the Law Commission’s proposals

You may also need to add to this proposal and include a timescale and any further information you wish to add – such as the length of the research (this is obviously information not available)}

1

Research Critique

Introduction

Research involves the use of systematic procedures to answer an inquiry. It involves data collection, synthesis and analysis in the light of the question or inquiry; and formulation of conclusions and recommendations, (Badke, 2004). General types of research include experimental studies which “are used to test the effect of a treatment or intervention”, (Peat, 2001, p. 16). Clinical trails fall under the broad category of experimental trials. Clinical trials are controlled experiments with patients, which range from “studies to prevent, detect, diagnose, control and treat health problems to studies of the psychological impact of a health problem and ways to improve people’s health, comfort, functioning, and quality of life”, (Brooten, 2006, p.86). Generally, clinical trials can be categorised into either randomised trials or non-randomised trials.

This paper will try to evaluate the scientific research conducted by Vickers and colleagues (2004), entitled: Acupuncture for chronic headache in primary care: large, pragmatic, randomised trial, which was published on 15 March 2004 at the British Medical Journal. This particular topic was selected due to its relevance to this field of study. Numerous insights from this field of study and valuable best practice information in quantitative research methods can be gained from undertaking this critiquing task. This critique will be carried out using the research framework for critiquing health research formulated by Caldwell and co-workers (2005), which provides a comprehensive set of criteria against which the elements of the research article by Vickers and colleagues (2004) can be appropriately measured. This paper will first evaluate the overview of the study, including the abstract, literature review and the methodology used. Next, it will critically analyse issues concerning research ethics, data protection and research funding. Then, it will evaluate the reliability, validity of the research results, including the sampling methods employed. It will then identify the specific strengths and weaknesses of the research article. Finally, the concluding judgement about the research article will be presented.

Below are the definitions of selected important terms used in the research article:

Acupuncture – pertains to the “technique of traditional Chinese medicine, in which a number of very fine metal needles are inserted into the skin at specially designated points”, (“Acupuncture”, 2007).
ANCOVA – stands for ‘analysis of covariance’ which is a statistical treatment that combines analysis of variance (ANOVA) and regression; whereby “the predictable component of the individual differences can be removed with regression analysis”, (Anderson, 2001, p. 283).
Chronic – “all impairments or deviations from normal that have one or more of the following characteristics: are permanent; leave residual disability; are caused by nonreversible pathological alteration; require special training of the patient for rehabilitation; or may be expected to require a long period of supervision, observation or care”, (Sidell, 1997, p. 1)
Negative binomial regression – “is one of a class of mixed Poisson models that mix a second source of variance with the Poisson variance to account for overdispersion”, (Cohen, et al., 2003, p. 531).
Outcome measures – “reflect patient health status at either the individual or the aggregate (population) level”, (Stommel & Wills, 2004, p. 234).
Randomised trial – A randomised trial is a clinical trial that pertains to “an experiment in which therapies under investigation are allocated by a chance mechanism”, (Brooten, 2006, p.86).
Sham Treatment – is the experimental treatment that “has no effect and which subjects cannot distinguish from the active treatment “(Peat, 2001, p. 20).

Critical Analysis

In March 15, 2004, the BMJ Publishing Group Ltd, a wholly owned subsidiary of the British Medical Association, published the research article in its medical journal, the British Medical Journal (BMJ). Its “print BMJ has been published continuously since 1840, and now appears in four weekly editions, varying only in their advertising content. Together, their circulation totals about 122 000 copies, of which 10 000 are distributed outside Britain”, (BMJ, undated). Its website provides “the full text of everything published in the print journal since 1994, as well as much material unique to the web”, (BMJ, undated).These make the BMJ Publishing Group Ltd. an influential and authoritative source of medical articles.

The authors are recognized medical practitioners with different fields of specialisations. Andrew Vickers is an assistant attending research methodologist at the Integrative Medicine Service, Biostatistics Service, Memorial Sloan-Kettering Cancer Center in New York; Rebecca Rees is a research officer at the Evidence for Policy and Practice Information and Co-ordinating Centre (EPPI-Centre), Social Science Research Unit in London; Catherine E Zollman is a general medical practitioner from Montpelier Health Centre in Bristol; Rob McCarney is a research officer at the Department of Psychological Medicine, Imperial College in London; Nadia Ellis is lecturer Department of Health and Social Sciences, Coventry University in Coventry; and both Peter Fisher, who is the director of research and Robbert Van Haselen who works as the deputy director of research are from Royal London Homeopathic Hospital. Thus, based on their qualifications, the authors have the credibility, needed knowledge and expertise to engage in an extensive scientific study such as the article being evaluated.

The article is appropriately titled as Acupuncture for chronic headache in primary care: large, pragmatic, randomised trial, since it essentially focussed on the effectiveness of the use of acupuncture to relieve chronic headache. Moreover, the title expressly implies that the methodology utilizes a large sample in the randomised trial. The abstract appears to be concise and complete. In a few paragraphs, the essential research components were summarised in the abstract, namely: (1) the research objective; (2) setting; (3) participants; (4) interventions; (5) main outcome measures; (6) results; and (7) conclusions. The abstract provides the complete key information that the readers need to fully understand the article. The introduction explained the health costs related to headache, which is the main topic of the article, including the need to apply other approaches in its treatment, particularly, acupuncture. The introduction also provides the main aim or rationale of the study, which was: “to estimate the effects of acupuncture in practice^{” in} general; and “to determine the effects of a policy of ‘use acupuncture’ on headache, health status, days off sick, and use of resources in patients with chronic headache compared with a policy of “avoid acupuncture”, in particular, (Vickers et al., 2004). However, the literature review was limited to only one source of published work – the Cochrane review of 26 randomised trials. This would be very insufficient in terms of the extent of evaluating available sources of information related to the topic of the study. Moreover, it does not provide a comprehensive evaluation of scholarly work from which the rationale of the study could be based.

The study is a quantitative research, since the data obtained are represented in the form of numbers and statistical treatment was employed to interpret the data gathered (Grinnell & Unrau, 2005, p. 62). Despite the lack of implicit statement of the hypothesis, the audience or reader can obtain a general notion or idea of what is being tested (the effectiveness of acupuncture in the treatment of chronic headache). However, the variables were not clearly defined. Nevertheless, the procedures employed in the methodology were intricate and systematic. The participants were clearly identified and adequately described in the study. In the accrual of patients, several stages were established to facilitate the flow and recruitment of participants. Figure 1 in the appendix illustrates the flow of participants in the study. Moreover, ethical principles were upheld during the conduct of participant recruitment. Since most legal instruments expressly prohibit the use of human subjects for medical research, the researchers obtained written informed consent from the participants.

The researchers implemented a system to ensure randomization of the study through a ‘password protected database’, thereby eliminating the potential for bias and subsequently improving the quality of the results. As Peat (2001, p. 28), explains: “ in randomised controlled trials, the quality of the evidence is improved if measurement bias, such as observer or reporting bias, is reduced by using objective outcome measurements and if observers are blinded to the group status of the subjects. The method of data collection proves to be valid and reliable, as evidenced by the relatively high number of treatments (12 treatments) employed over a sufficient length of time (3 months). Moreover, a follow-up procedure was implemented to generate “a global estimate of current and baseline headache severity”, (Vickers, et al., 2004). This further enhanced the validity of the results. The large sample size helped ensure the reliability of the results. Additionally, the use of measurable outcomes such as the Likert scale of headache severity helped eliminate bias by extending common measurement criteria for the respondents. The article correlated its results with the findings in “prior literature on acupuncture”, (Vickers, et al., 2004), suggesting a high degree of validity of results generated.

The presentation of results was systematic and at the same time, clear and comprehensive. The results portion explained the process of participant recruitment including the flow of participants through the trial, patient compliance and dropout rate and their characteristics. It also provided a clear explanation of data that were obtained with accompanying tables and graphs. Thus, the audience can easily comprehend the results obtained. In the discussion, the results generated were translated into the main findings of the study which were stated in a clear, yet simple manner. Moreover, the strengths and the limitations were identified and discussed clearly.

The strengths of the research article are anchored on its methodology, such as in the recruitment of participants with a large sample size, the implementation of a system to conceal the randomization and the meticulous follow-up procedure one year after the experiment. Such procedures helped ensure that the research findings are reliable and valid. On the other hand, one of the limitations of the study is the absence of sham acupuncture for the participants, thereby failing to consider the potential placebo effects. Additionally, the participants were not blinded in the study; thereby raising the possibility of bias in terms of the participants’ assessments of their headache scores. In terms of the literature review, the article failed to provide an objective evaluation of a sufficient body of literature related to the topic of the research. Thus, it failed to address the gaps in knowledge related to acupuncture and chronic headache due to the lack of an extensive evaluation of available literature.

Conclusion

In the final analysis, the research article serves as an additional source of authoritative and credible information regarding the use of acupuncture for the relief of chronic headache. The findings of the study strongly support available scientific evidence. The weaknesses of the research article discussed above can serve as important considerations for researchers who are planning to engage in a similar undertaking – they must evaluate a substantial body of literature to gain insight into the currently available information and subsequently identify knowledge gaps. Moreover, future randomised clinical studies in acupuncture should include a sham treatment to be able to consider potential placebo effects; and blinding of participants must be observed to eliminate bias.

Bibliography

Acupuncture. (2007). In The Columbia Encyclopedia (6th ed.). New York: Columbia University Press.
Anderson, N.H., 2001. Empirical Direction in Design and Analysis. Mahwah, NJ: Lawrence Erlbaum Associates.
Badke, W.B., 2004. Research strategies: Finding your way through the information fog. (Second Edition). New York: iUniverse, Inc.
British Medical Journal. Undated. Available from: http://resources.bmj.com/bmj/about-bmj. [Accessed: 18 April, 2008].
Brooten, D., 2006. Clinical Trails. In: Encyclopedia of Nursing Research (Second Edition). Joyce Fitzpatrick and Wallace, J.J., (Eds). New York: Springer Publishing Company.
Caldwell, K., Henshaw, L., Taylor, G., 2005. Developing a framework for critiquing health research. Journal of Health, Social and Environmental Issues, 6(1), 45-54.
Cohen, J., Cohen, P., West, S.G. and Aiken, L.S., 2003. Applied Multiple Regression / Correlation Analysis for the Behavioral Sciences. Hillsdale, NJ: Erlbaum.
Grinnell, R. M., Unrau, Y. A., (Eds.), 2005. Social Work Research and Evaluation: Quantitative and Qualitative Approaches (7th ed.). New York: Oxford University Press.
Peat, J. K. (Ed.), 2001. Health Science Research: A Handbook of Quantitative Methods. Crows Nest, N.S.W.: Allen & Unwin.
Sidell, N. L. , 1997. Adult Adjustment to Chronic Illness: A Review of the Literature. Health and Social Work, 22(1), 5+.
Stommels, M., Wills, C.E., 2004. Clinical Research: Concepts and Principles for Advanced Practice Nurses. Philadelphia: Lippincott Williams and Wilkins
Vickers, A.J., Rees, R., Zollman, C.E., McCarney, R., Smith, C.M., Ellis, N., Fisher, P., 2004. Acupuncture for chronic headache in primary care: large, pragmatic, randomised trial. Available from: http://www.bmj.com/cgi/content/full/328/7442/744. [Accessed: 15 April 2008].

Appendix

Figure 1Flow of Participants Through the Trial

Source: Vickers, et al., 2004

Public, private and voluntary sectors in the sports industry, advantages and disadvantages of the leisure centre being in the public sector, how the local leisure centre can meet the aim of getting more local clubs to use its facilities.

Introduction

“Since the opportunity to participate in sport or recreation requires facilities, the central task of organisations, and associated individuals, is to provide a service which focuses on people and which satisfies that need.”^[1]

The sports industry has changed beyond all recognition since the beginning of the 1990’s in each of the public, private and voluntary sectors. The impetus has come from top level government policy with the creation of the UK Sports Council and the formation of the chief sporting bodies such as Sport England offering both funding and structure to the previously ad hoc nature of leisure and recreation in modern Britain. Moreover, the lure of professional sport has also irrevocably changed in tandem with the structural changes in amateur sport with the result that there is, at the dawn of the twenty first century, more people are taking an active part in sport, which has further increased the pressure on local services such as leisure centres. There are though vast differences between the way that the public and private sector sports providers are run and funded as shall now become apparent.

The Private Sector

With regards to the sports industry, the private sector refers to those leisure services that are funded by private capital and open only to private membership. This can mean anything from specialist professional sports clubs to health and fitness clubs to local sports teams that have been established and sponsored by local and national businesses alike. The advantages of this kind of sporting industry are predominantly economic with the funding of private sports clubs historically far outstripping the economic resources available to equivalent public sector sports services. Certainly in the 1970’s and 1980’s, private sector sports industries were far more popular and productive than their public sector counterparts mirrored in the elevated sporting achievements of private school sporting institutions as opposed to the relative failings of the same public (comprehensive) school sports bodies. There are, however, inherent disadvantages to sports and leisure services that rely exclusively on the private sector for funding. First and foremost, there are no guarantees that the source of that funding will remain constant for any fixed length of time. Benefactors are subject to the ups and downs of the free market economy, which can result in sharp reductions – as well as rises – in the level of funding provided. In addition, any leisure service that is inexorably tied to the private sector also inevitably suffers from the lack of community spirit that can only be adequately garnered through association with the local public authorities. Thus, while the advantages to sports services in the private sector appear on the surface to be all encompassing, the reality is that the lack of stability that characterises all facets of the private sector economy hampers the sustained growth and popularity.

The Public Sector

“We know that sport can make a positive contribution to national morale, health and the economy. We believe that it can enhance community spirit, equality of opportunity, personal development and social integration.”^[2]

As the above quotation from the UK Sports Council in 1992 attests, the government has radically altered the way in which it views sport and the national leisure industry. The leisure industry is no longer seen as a vehicle through which to achieve solely sporting success; rather, sport – within the corridors of power in Westminster – is now seen as a way of combating such issues as obesity, social exclusion and perceived self?competence.

“Sports are vehicles of identity, providing people with a sense of difference and a way of classifying themselves and others.”^[3]

As a direct result, funding within the public sector has seen a sharp, unprecedented rise since the early 1990’s with the government acting as the focal point behind this increase in official spending. An investment of ?1.5 billion over the next five years by way of state sponsored assistance has been promised by Westminster to further increase the organisational structures and performance levels of adult and child athletes who train and practice within the public sector. This money, bolstered by funding generated from institutions such as the National Lottery, is delegated to local sports authorities within Sport England, Sport Wales, Sport Scotland or Sport Northern Ireland and injected into the local community. Furthermore, local government spends approximately ?1 billion per year on sport and leisure, which is more than 50% of the total resources available to sport. This financial injection is far beyond any investment proposed by private capital; in fact, because of this large economic discrepancy, the private sector has increasingly sought to form a partnership with the public sector in order to be associated with the vast increase in interest in sport as witnessed in recent years.

Moreover, public sector sports services also get to reap the rewards of the government’s efforts at placing the country on the international sporting map. The 2002 Commonwealth Games in Manchester and, more significantly, the 2012 Olympic Games to be held in London will prove to be long term sources of investment for all those with an active interest in public sector sporting services. Not only has funding vastly increased (with the cost to the government estimated to be in excess of ?1 billion for the 2012 Games), the facilities that have been and are being constructed are open to the public after the completion of the official competition. In Manchester this has served to open up a city centre swimming pool, an athletics track and a football stadium for use within the public sector. The results for London are likely to be much more wholesale than in Manchester. Moreover, as the new facilities and funding increase, so the burgeoning association between national identity, local and central government and sport is further cemented. This has helped to push people into participating in public as opposed to private sports services, representing a significant turnaround from previous decades.

Like private sector sporting institutions, public sector services are similarly riddled with pros and cons. The most obvious advantage at the present time is the aforementioned increase in public authority funding and facilities open to the public sector, exacerbated by a media that constantly underlines the partnership taking place between local government and sport. This is, however, a double edged sword as the major disadvantage to public sector sports services concerns the very nature of government. Ultimately, just because it has suited New Labour to promote participation in recreation and sport is not to state that the Tories would necessarily feel the same. Thus, public sector sports are subject to the same ups and down and insecurities that beset the private sector.

The Voluntary Sector

Voluntary organisations rely heavily upon both the community and private enterprises for funding; they therefore straddle the boundaries that have traditionally separated the public and private sectors. Once more, though, it is the unprecedented rise in government funding that has been the voluntary sector’s greatest asset. The revamped Department for Culture, Media and Sport set up the Community Club Development Programme (CCDP) specifically to deal with the funding problems regarding the facilities and personnel required for the successful operation of volunteer sports clubs. The CCDP will provide ?100 million to National Sports Governing Bodies by March 2008 for the construction and continuation of community based sports clubs. Advantages to this kind of sporting authority centre upon the lack of reliance solely upon the public or the private sector, while conversely, at the same time, the lack of constant source of funding makes the voluntary sector the most vulnerable within the current social and political climate.

Conclusion

There are vast disparities between the public and private sectors with the local voluntary leisure centre enjoying the benefits of both worlds. For as long as the current climate favours the sports and recreation industry, the community leisure centre will continue to reap the rewards of a society renewing a relationship with exercise that had previously become stale. At present there is an excess of people interested in taking part in leisure and sport that is wholly to the benefit of local leisure centres that are able to charge admission fees that are significantly less than those on offer in the private sector. In addition, excessive government funding signals that the economic means at the public and voluntary sectors are currently vastly superior to those of the private sector. However, in the final analysis, one should not presume that the imbalance in favour of the public sector will remain as it is indefinitely. Should leisure and sport once again find themselves on the periphery of popular culture, we would surely see a reversal of contemporary trends with the balance tipped heavily in the private sector’s favour as is the case with health and education services. Politics, like economics, is subject to sweeping changes in a very short space of time.

References

Biddle, S., Sallis, J. and Cavill, N. (Eds.) (1998), Young and Active? Young People and Health Enhancing Physical Activity: Evidence and Implications London: Health Education Authority

Elvin, I.T. (1990), Sport and Physical Recreation London: Longman

Horne, J., Tomlinson, A. and Whannel, G. (2000), Understanding Sport: An Introduction to the Sociological and Cultural Analysis of Sport London: E & FN SPON

Hylton, K. (Ed.) (2001) Sports Development: Policy, Process and Practice London: Routledge

MacClancey, J. (1996) Sport, Identity and Ethnicity Oxford: Berg

Sport in the Nineties – New Horizons: a Draft Consultation (1992) London: UK Sports Council

“Promissory estoppel is now a mature doctrine. Its role is to mitigate some of the harshness of the doctrine of consideration by protecting those who reasonably rely on promises. Its full potential can only be reached if the court permits its use not merely as a shield, but as a sword, where appropriate. The decision of the Court of Appeal in Baird Textile Holdings Ltd v Marks and Spencer plc [2001] therefore represents a missed opportunity to clarify and modernise the law.”

Promissory estoppel is an important tool in equity to create fairness within contract law. It deals specifically with consideration, which as a doctrine holds the parties that have entered into a contract to which they both intend to be bound. Therefore the parties must have the capacity to be bound to the contract; as well as the intention to be bound by the contract. There must be a value to amount to consideration, which does not necessarily have to be monetary^[1]. Consideration can be a right, interest, service, benefit to one party and sufficient detriment to the other party. ^[2] Consideration does not have to be equal on both sides; one party may only leave a nominal amount of consideration^[3] As long as there is sufficient intention and the terms are not vague then the law will not get involved in business dealings; therefore the courts will infer intention^[4]; as long as the consideration for that particular business dealing illustrates that there is sufficient consideration.^[5] Insufficient consideration is any act where the duty is already imposed by law or a valid contractual duty. However, there are exceptions to the rules, because consideration at times can be deemed as far too harsh.

The case of Williams v Roffey Bros^[6] held that consideration could be inferred in a pre-existing contractual duty if there was further consideration that could be inferred. For example this case recognized that the contractor would be subject to a significant late charge, if he did not re-negotiate his contract with the subcontractor to finish on time. Therefore the renegotiation of the pre-existing duty saved the contractor a loss of money, which the courts held as sufficient consideration. However, in the case of paying a partial debt there can never be consideration. The rule in Pinnel’s Case^[7] was confirmed in the case of Foakes v Beer^[8] where it was held that part payment of a debt could be held as consideration because there was an existing contractual duty. The rule in Pinnel’s Case is that promissory estoppel is an invalid action when it comes to the part payment of debt, unless it is paid in full and benefits both parties. The reasoning behind this is that part payment of debt is inequitable because the person who is supposed to benefit from the consideration is put at a detriment and therefore defeats on of the central tenants of consideration, which one party is at a sufficient benefit whilst the other party is at a sufficient detriment. There are circumstances where promissory estoppel is possible in regards to a reduced payment of a price or fee. The case of Central London Property Trust v High Trees House Ltd^[9] is such a case, because the political and social environment was drastically changed. The two parties where a property owner and a business tenant, who then leased the property as flats to other individuals residentially. An agreed business tenancy price came into question during WWII, because of the bombings in London the situation made it impossible for the renter to pay the whole rent due to the bombing and lack of tenants. Here equity stepped and promissory estoppel was used, because it would be unfair to make the renter pay the whole rental amount due to the circumstances. In addition the agreement by the property owner to accept less due to the WWII inferred intention, because otherwise the landlord would receive no rent because the renter would have vacated the premises; and no other businesses would have taken up the tenancy during the war. This is a very specific scenario, where WWII could have amounted to frustration of the contract, because the war would have made it impossible for the renter to satisfy the contract and an act of war is outside his ambit of control. After the High Trees case the courts extended the doctrine of promissory estoppel in the case partial full partial payment of a debt; however if it were revealed that the re-negotiation was due was an action of duress that forced the creditor to agree to the new credit agreement then equity could not step in with the doctrine of promissory estoppel. One such case that illustrates that equity will only aid those with clean hands is the case of D & C Builders v Rees^[10] where Rees discerned that the building company was in financial distress and tried to use this to her advantage by offering a smaller payment in full or nothing. This amounted to duress, because the knowledge that Rees had of the problems that D & C Builders were facing was used as a sword against a fair and equitable outcome. The key factor that surrounds the doctrine of Promissory Estoppel is that it originates out of equity and aims to create a just outcome, as in the High Trees Case. In the case of D & C Builders the use of Promissory Estoppel was for unjust purposes and equity could not aid Rees, because an injustice would occur.

High Trees is the case that the modern doctrine of Promissory Estoppel has developed from; however it was the Hughes Case that the doctrine originated from, where a landlord’s actions gave the tenant contrary belief in the events surrounding a notice to repair. Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd^[11] case allows for suspension of payment to be reverted back to active payment as long as reasonable notice is given. This also means with the reasonable notice that the creditor can also receive compensation for the suspended payments; therefore ensuring that there is not a case of part payment of debt, because the interest can keep running. The only exception to this is an agreement of an early settlement, with a lump sum that is considered reasonable by both parties.

The Tool Metal Case and the Hughes Case point to the doctrine of promissory estoppel being a shield and not a sword of equitable justice, because it believes that consideration plays an essential part of contract law. To eradicate the harshness of consideration may allow individual like Rees in the D & C Builders Case to use Promissory Estoppel for unfair and unjust purposes. However, the High Trees Case that is the key case for the modern doctrine of Promissory Estoppel seems to be pointing in a different direction, i.e. that the doctrine is a sword against the harshness of consideration. In this case WWII made it impossible for the original contract to be kept to, hence the parties re-negotiated during this period. The case of Coombe v Coombe^[12] argued that the doctrine in High Trees could not be identified as a sword against the doctrine of consideration; rather it can only be used as a defense to an action and in the interests of justice. The cases of Re Wyven Developments^[13] and Evenden v Guildford City AFC^[14] argued that Coombe v Coombe was incorrect and that the doctrine of Promissory Estoppel could be used as a sword; as well as a shield if justice and equity dictated.

The Coombe approach makes sense by ensuring that the rules surrounding contract law are upheld and ensuring that certainty in contracts remain; otherwise there would be a mass confusion where courts could get too involved in business contracts. English law is based on a laissez faire system, where business dealings should be free from the ministrations of parliament and the courts; as long as just and both parties were capable to enter the contract. As Mitchell argues, parties enter a contract with specific expectations and to turn these upside down would be a breach a fundamental principle of contract law:

While we could dismiss this as assimilating reasonable expectation with contractual rights, and therefore making the appeal to reasonable expectation redundant, it is clear that many appeals to reasonable expectation rely upon an institutional or contract law-based source for such expectations. Reiter and Swan, for example, write that ‘[t]he assumption is that the fundamental purpose of contract law is the protection and promotion of expectations reasonably created by contract’. If ‘contract’ here is taken in a legal, rather than a social sense, then the utility of reasonable expectations as a counter-contractual reference point is in danger of disappearing.^[15]

Therefore in the light of the essential principles of contract law and the doctrine of consideration the decision of Baird v M&S^[16] would have been the correct decision, otherwise there would be a free for all for parties to argue that the contract is unjust and flagrant actions of Promissory Estoppel would occur. However, Promissory Estoppel would still remain as a defense in cases where the situation dictated that there would be an unjust outcome if the contract was upheld in its present form. The case of Baird v M & S, Baird used Promissory Estoppel as an action to enforce what Baird classed as an unwritten contract. In other words Baird was arguing that the long term relationship between the two created a reasonable expectation that there was an ongoing business relationship, which could only be altered or terminated with reasonable notice; as per the Tool Metal Case. The Court of Appeal however decided against this approach, because the reason that M & S did not enter a written contractual agreement was for flexibility and the option of changing suppliers if market forces dictated this route. Also the Court of Appeal stated that the lack of a (legal) contract was determinative for the court. The estoppel claim was also thought likely to fail, since estoppel cannot be used to create a cause of action. It was remarked that, despite the close relationship between the parties, ‘businessmen must be taken to be aware that, without specific contractual protection, their business may suffer in consequence.^[17] However, this argument seems to be very one-sided, because as with the High Trees Case the situation in Baird v M & S does indicate that there was intention to create some form of business and contractual relationship that benefited both parties. In fact the long history of Baird supplying the goods could be inferred as terms and conditions of the contract; however the lack of a written contract seems to be an excuse for the Court of Appeal to open up Promissory Estoppel as an action; as opposed to just a defense. Therefore, as Mitchell argues the decision in Baird v M & S could be taken either way because both sides were arguing certainty of contracts and reasonable expectation; however the determining factor not to find a contract was because of public policy reasons NOT to make Promissory Estoppel a cause of action (a Sword) and open the floodgates to further actions:

One can see how a ‘reasonable expectations’ argument can be used to support Baird or M & S, but each relies on a different basis for the reasonable expectation. Baird will have non-contractual reasonable expectations concerning the parties’ mutual obligations, based upon their experience of the previous thirty years. M & S, on the other hand, have reasonable expectations based on their strict legal rights, and supported in the judgement, that there is no contract and hence the relationship can be terminated at will-an institutional interpretation of reasonable expectation… This result does not support the attempt to make contract law more sensitive to the social dimension of agreement-making, but undermines it by privileging the legal framework in the resolution of the dispute.^[18]

Bibliography:

J. Beatson (2002) Anson’s Law of Contract 28^th Edition, Oxford University Press

Hooley (1991) Consideration and Existing Duty JBL 19-35

David Kelly, Ann Holmes & Ruth Hayward (2002) Business Law 4^th Edition, Cavendish

Ewan McIntyre, (2004) Business Law, Longman

McKendrick, 2005, Contract law, text, cases and materials, second edition, Oxford University Press

Mitchell, 2003, Leading a Life of its own? The Roles of Reasonable Expectation in Contract Law, OJLS 23 639

Stallworthy (1994) Case Comment: Variation of Contracts, ICCR 5(7)

Chris Turner (2004) Unlocking Contract Law, Hodder Arnold

Repeal of the Employment Act 2002 (Dispute Resolution) Regulations 2004: A report

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In October 2004 the government introduced a statutory minimum disciplinary and grievance procedure dealing with disputes in the workplace. These procedures and related rules are set out in the Employment Act 2002 (Dispute Resolution) Regulations 2004 and state that employers must follow a minimum dismissal and disciplinary procedure in the workplace or otherwise dismissal will be automatically unfair. When bringing a claim at the Employment Tribunal for unfair dismissal, employees are also entitled to additional compensation if these disciplinary and dismissal procedures are not adhered to. Although the aim of the Regulations was to encourage informal resolution of disputes, many employers felt that they were too complicated and did not achieve the desired aim. Gibbons (2007 pg.24)^[1] sums up this view,

‘The procedures are seen as a prelude to employment tribunals, rather than a way of resolving problems in the workplace’

The Employment Bill 2007 therefore recommends a repeal of the Regulations for what is hoped will be a more straightforward regime likely to come into force in April 2009.

The Regulations

A standard dismissal procedure as per the Regulations involves the following three steps. The first is a letter which must be sent to the employee setting out the reason for dismissal and inviting them to a meeting at a convenient time and place. The employee must be given time in which to consider the letter and then has a duty having done so to take all reasonable steps to attend the meeting. The second step involves the actual meeting which has to be conducted in a manner which enables both employer and the employee to explain their case. After the meeting the employee must be notified of the decision and provided a right of appeal. The third step would be the appeal process and if the employee wishes to appeal, they must inform the employer who will then invite them to an appeal meeting. The onus is on the employee to take all reasonable steps to attend this appeal meeting and as far as is practicable a more senior manager from the organisation should attend the appeal meeting.

The appeal meeting must be conducted in the manner in which enables both the employer and the employee to explain their case. After the meeting the employee must be notified of the final decision. During every meeting in the process, the employee has a right to be accompanied by a work colleague or a trade union official. This companion may address the hearing, confer with the employee during the hearing and may also sum up the employees case but must not answer questions on behalf of the employee.

In the case of a grievance against an employer the same steps must be followed with the letter sent from employee to employer stating the nature of the grievance and asking for a meeting to be held. Where the employee has already left employment the Regulations provide for a modified procedure that does not require the Step 2 meeting.

The problems created by the Regulations

When the Regulations came into force on the 1^st October 2004 the government resolved to revisit them after two years. The Department of Trade and Industry confirmed this in its Success at Work Report (2007 pg. 8)^[2]

‘This is a key part of DTI’s work to simplify regulation, by removing compliance costs and complexity, and addressing irritants for business and others affected by employment law, while ensuring that employee rights are protected.’

The government then commissioned an independent report on the 12^th December 2006 written by Michael Gibbons who was asked to assess all employment dispute resolution procedures including suggestions for adapting the Regulations if he found them not to be fit for purpose. He interviewed over 60 employers, employees and intermediaries involved in dispute resolution. Gibbons in his report entitled Better Dispute Resolution (2007 pg.5) states^[3],

‘In conducting the Review I was struck by the overwhelming consensus that the intentions of the 2004 Regulations were sound and that there had been a genuine attempt to keep them simple, and yet …as formal legislation they have failed to produce the desired policy outcome. This is perhaps a classic case of good policy, but inappropriately inflexible and prescriptive regulation.’

It became apparent that the regulations did not state clearly what a written grievance was or what it was to contain. With no specific guidance on this, parties called for procedural hearings at the ET to establish whether the claimant actually put their grievance in writing and whether all of the claims that were found in their Claim Form had previously been evidenced in the grievance letter. The respondents were claiming that this was not the case and therefore there was no case to answer. Therefore although the procedures were clear as to the steps to follow in bringing a dispute insufficient guidance was given about each stage leaving Tribunals with an increase in the number and length of proceedings. Gibbons explains the difficulty with identifying what constitutes a grievance letter (2007 pg.8),

‘…comments in resignation letters and in 360-degree feedback forms have been held to meet the requirements, so some employers feel it is necessary to check closely and investigate any written communication that might be construed as a grievance’

Although the intention of the regulations was for early informal resolution of disputes, the drafting of the Step 1 letter and consequent meetings in practice escalate many issues taking up management time and proving stressful for employees. Also the three step process as outlined above was not always adequate in all circumstances. Small businesses in particular have complained about the formal, ‘one size fits all’ approach of the regulations. Gibbons explains (2007 pg. 8),

‘…the appeal stage is an unnecessary burden, especially for small businesses. The appeal will often be to the same person who made the original decision. It can also be difficult in cases where employees have left the workplace. One business felt it necessary to follow the three-step procedures for each of their Christmas temporary staff before they left –

a process which added no value.’

The main thrust of the opposition to the current regime is that it has created an unhealthy overlap between the resolution of disputes and the litigation procedure which should as far as possible be kept separate. For example the regulations stipulate that before a claim is lodged at the Employment Tribunal (ET) a grievance letter must be sent to the employer within three months of the alleged dismissal or conduct. Any breach of the procedure would allow the Tribunal to grant up to 50% increase if the fault was that of the employer or 50% reduction in the award depending on whether the fault was that of the employee. Of course apart from the fact that it is not always easy to ascertain whose fault led to a breach of procedure such stipulations and penalties mean that litigation has to be considered at an early stage when resolution of the dispute should be paramount. Gibbon states (2007 pg.25),

‘Both large and small businesses have reported that the number of formal disputes has risen. The Review has heard that 30 to 40% increases have been typical in the retail sector.’

Further complications arise where there are multiple claims for example in an equal pay case and the three step process has to be repeated many times creating an unnecessary administrative burden. The same burden is also felt where and employer seeks to follow the disciplinary steps and at the same time the employee also seeks to pursue a grievance.

‘It is not always clear how the two strands of the Regulations should operate in such circumstances, and employers can feel compelled to hold excessive numbers of meetings and write excessive numbers of formal letters to be sure of fulfilling the procedural requirements’^[4]

The proposed reforms

As a result of the Gibbons Review, the Government held a consultation and the responses received formed the basis of the present reform proposals published in the Employment Bill 2007 which has received royal assent and is now the Employment Act 2008.

The first major reform is for the Regulations to be repealed in their entirety in April 2009 and replaced with a revised ACAS Code of Practice (the Code) which has been agreed in draft form. There will also be non statutory guidance also provided by ACAS. ACAS stands for the Advisory Conciliation and Arbitration Service and currently offers employees an arbitration service as an alternative to resorting to proceedings. Also it has always provided a Code for resolving disputes but it is only now being adapted and incorporated into statute. In actual fact the revised ACAS code provides for the same three step procedure but does not incorporate the same penalties and conditions as the Regulations. There have also been some additional requirements which seem to lean towards ensuring that employees behave ‘reasonably’. The draft Code is designed to provide basic practical guidance for disciplinary and grievance procedures but is limited as it will not apply to dismissals as a result of redundancy^[5] or expiration of a fixed term contract.The Code describes the remit it covers^[6],

‘Disciplinary situations include misconduct and/or poor performance…Grievances are concerns, problems or complaints that employees raise with their Employers’

It suggests in the Foreword of the Code^[7] that employers and employees should try to resolve disputes between them. However if they cannot, they should seek the help of an independent third party inside or outside the organisation. The Code provides that where the Employment Tribunal must ascertain compliance with the Code it will do this on a case by case basis taking into account the size and resources of the employer. Therefore unlike the Regulations there is no expectation that all business will comply with every provision in the Code providing greater flexibility for employers.

In relation to disciplinary procedures the first step is to establish the facts of each case by collating evidence and holding an investigatory meeting if necessary. The Code then states^[8],

‘If it is decided that there is a disciplinary case to answer, the employee should be notified of this in writing. This notification should contain sufficient information about the alleged misconduct or poor performance and its possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting’

New provisions provide for evidence collated including witness statements to be provided by the employer with the letter requesting a disciplinary meeting. Also an employee may call their own witnesses. The statutory right to be accompanied to this meeting still stands however the Code’s emphasis on ‘reasonableness’ is evidenced where it states^[9],

‘However, it would not normally be reasonable for workers to insist on being accompanied by a companion whose presence would not prejudice the hearing nor would it be reasonable for a worker to ask to be accompanied by a companion from a remote geographical location if someone suitable and willing was available on site.’

The dispute Regulations had provided that on appeal the employer only had to make one attempt to reconvene the meeting however under the Code the employer has to show that the employee has persistently been unable or unwilling to attend before a decision can be made in their absence.^[10] If the employee decides to appeal, grounds of appeal in writing must be submitted to the employer.^[11] This requirement was not found in the Regulations and the idea behind it is to ensure that further time is not spent discussing issues that have already been covered in the first meeting.

In a case of a grievance for example instead of the emphasis on a Step 1 grievance letter, the revised Code states^[12],

‘If it is not possible to resolve a grievance informally employees should raise the matter formally and without unreasonable delay’

The employee should inform the employer of the grievance preferably in writing and the letter should be addressed to the line manager. Unlike the Regulations, a claim would not be barred in absence of a grievance letter although a failure to send this letter would be a breach of the Code and may lead to a reduction in the award.

The Code states that a meeting must be heard pursuant to the letter and that the employee must have the right to be accompanied by a colleague or trade union official. As with the disciplinary procedure, the requirement here is that the right to be accompanied is reasonable. During the meeting the employer can ask for an adjournment in order to carry out an investigation. There is also a right of appeal and subsequently the employee can decide to take the matter further and pursue the case in the Employment Tribunal.

The new regime will not hold a dismissal to be automatically unfair if there has been a breach in procedure. Employment Tribunals will have to decide cases on what is fair and reasonable and will have discretionary powers to adjust awards of up to 25% if either employer or employee has not followed the ACAS code. In relation to this provision the government report Resolving Disputes in the Workplace Consultation (May 2008 pg.16) it states,

‘This will be a power rather than a duty in order to allow the employment tribunals discretion to apply it in the interests of justice and equity’

It is hoped that these reforms will give a higher level of flexibility in resolving work place disputes and various businesses can tailor the new regime to their specific needs. The Government has also agreed as part of the reform to invest ?37M into the ACAS helpline system in order to provide early mediation for workplace disputes that would otherwise result in tribunal claims. Resolving Disputes in the Workplace Consultation (May 2008 pg.16)^[13] states,

‘The government considers the way forward should be a short non prescriptive Statutory Code setting out the principles of what and employer and employee must do supported by fuller statutory guidance’

The idea is that the new statutory code will provide guidance for employment tribunals and the non statutory guidance will be used by employers and employees. Where a grievance arises during a disciplinary process, the disciplinary may be suspended or both can be dealt with concurrently if related. The Code does not cover collective grievances which must be dealt with under the agreed collective grievances procedures agreed with trade unions.

The likely effect of these reforms on employers and employees

It is unlikely that the Code will have a major change on the dispute resolution process in the work place. The code incorporates the same three steps that were found in the Regulations. There is still a penalty of an increase or decrease in the award up to 25% depending on whether the employer or employee is at fault.

Because the employee is likely to suffer a reduction in compensation of up to 25 % the pressure to ensure a grievance letter is sent still remains. Although unlike the Regulations, the claim is not barred due to failure to lodge a grievance, the number of grievances brought by employees is not likely to be reduced for so long as there remains a penalty, albeit the employee at the grievance stage may not have considered litigation. So arguably there may not necessarily be reduction of time spent on hearing and processing grievances in the workplace.

Also with the repeal of the Regulations there is no automatically unfair dismissal because of non compliance. Many have argued that this places fewer restrictions on unscrupulous employers therefore increasing the likelihood of litigation. There would need to be clear communication by the government and business to their employees as to how the new regime will work and arrangements need to be put in place for the transition between the old and new procedures.

As far as practical points flowing from the provisions of the ACAS Code, the following would ensure that employers are taking the right steps to ensure compliance although there still remains areas of uncertainty that will only be made clear once the Code is put into practice.

Mediation training should be provided for Human Resources staff to act as internal mediators and consider compiling a list of good mediators outside the organisation.
In the Introduction of the Code, it states that employees should be involved where appropriate in the development of rules and procedures so to this end it would be prudent if employers hold consultation meetings with employees and their Trade Union Representatives during the transition period between the Regulations and the Code.
Guidelines should be provided as to how to provide a ‘reasonable opportunity’ to call witnesses (Clause 12) and establish in policy that that the right to be accompanied is subject to considerations as to reasonableness (Clause 15). These issues are clearly subjective and would vary on a case by case basis and are therefore likely to prove controversial or even problematic
Guidelines should be drafted as to when and under what circumstances the employee has shown inability or unwillingness to attend a disciplinary meeting without good cause.
Different people should oversee the investigatory and later the disciplinary process.

In order to facilitate early resolution of disputes as well as implementing the Code the government also intends for ACAS to provide a helpline where simple disputes can be dealt with over the phone or by internet. This extends the existing right to mitigation that parties must be notified of in any dispute. However the issue is ensuring that ACS has the necessary funds and staff to successfully fulfil this role. Staff must be well trained in providing employment advice and negotiating settlement between parties. Another proposal is that the Employment Tribunal Application process should happen via the helpline giving claimants access to advice on their claim and alternatives to litigation.

Not all involved in the dispute resolution process favour these reforms. In the government report Resolving Disputes in the Workplace Consultation^[14] it states

‘Opponents of repeal included a number of Trade Unions, representatives of vulnerable workers and individuals. Many cited the benefits of having a standard required procedure in all workplaces which operated to the benefit of workers in all types of organisations and encouraged good practice.’

From the point of view of an employee, the fear is that the new regime and its emphasis on ‘reasonableness’ leaves too much to the discretion of the employer. This coupled with the removal of the automatically unfair provision has left the issue of unfairness to the Employment Tribunal who will access the situation based on many factors other than breaches in the code including the size and resources of the employer. There is therefore an element of uncertainty in the new provisions certainly for the employee but for the employer as well. In the Legal Action Group’s response to the government consultation (June 2007) it states,^[15]

‘Repeal of the Employment Act 2002 (Dispute Resolution) Regulations 2004 (the ‘regulations’), will not improve the poor position of the many, low paid, non-unionised, workers in the labour market. The government should act to protect the most vulnerable by encouraging trade union organisation and by other legislative measures.’

The concern of the Group is that the government’s emphasis on mediation could lead to vulnerable employees losing their right to a formal hearing to resolve disputes. In order for alternatives to litigation to be properly considered good quality advice needs to be available to all however only a third of the working population are trade union members. A lack of access to legal aid will mean that non members will not have proper recourse to legal advice. It seems unlikely that the ACAS helpline proposal will cater for all workplace disputes.

The Code has also been seen as unfair towards employees as it does not take into account that in reality there is rarely a balance of power between employer and employee. Employers have more resources and employees tend to already feel intimidated when bringing a grievance. A simple dispute could still have as its underlying cause a long term abusive policy against workers which of course cannot be resolved through a telephone conversation with an ACAS mediator. Indeed there are many categories of workers including the elderly and disabled or those with language difficulties who would need face to face advice. The LAG report states,^[16]

‘We have to question whether the DTI is taking an even-handed approach to the resolution of work-related disputes or whether it has bowed to pressure from the powerful employers lobby.’

The overall view therefore of those acting for employees is that although the Regulations were unnecessarily complex they could have been simplified without being repealed as they provided minimum protection for all workers, whether or not they were trade union members. The principal reason for issuing the Regulations was because it was found that many employers did not have any procedures in place for resolving dispute and a repeal of the regulations could mean a return to this situation. There are also potential problems with the right of employees to bring claims being infringed where it is proposed that the Tribunal application system should also be processed through the ACAS helpline. LAG notes^[17],

‘It would be inappropriate for a service point that had an aim of providing advice and guidance to also act in a ‘gatekeeping’ role for potential ET claims. Combined with the suggestion that the new advice service should be able to over-ride or contradict the advice given by a representative11, this would damage any integrity generated for

such a service.’

Conclusion

Clearly the repeal of the Dispute Resolution Regulations 2004 and the implementation of the ACAS Code due to take effect in April 2009 is not without its difficulties. The Government’s aim is to reduce the amount of claims being taken to the Tribunal although it recognises that dispute resolution is in itself only one strand. The other is revising the law in relation to unfair dismissal and making the Tribunal processes itself more efficient.

The Code is similar to the Regulations in that it mirrors a three step process. However the onus is often put on the employer to determine what is reasonable which has the effect of the Tribunal later claiming breach of the regulations or the employee claiming that their rights have been infringed. The employer therefore has a burden to act reasonably and the vagueness of this term although creates more flexibility to employers will produce greater uncertainty. Only time will tell whether the Code will in fact encourage a ‘conflict resolution culture’ and reduce the administrative burden on employers as its drafters intended.

BIBLIOGRAPHY

ACAS: Draft for Consultation: Draft Code of Practice on Discipline and Grievance (Nov 2008) http://www.acas.org.uk/CHttpHandler.ashx?id=961&p=0
BERR -Resolving Disputes in the Workplace Consultation Government Response (May 2008)
DTI-Better Dispute Resolution: A Review of Employment Dispute Resolution in Great Britain- Michael Gibbons (March 2007)-http://www.berr.gov.uk/files/file38516.pdf
DTI-Success at work resolving disputes in the workplace: A consultation- (March 2007)
DTI-Success at work resolving disputes in the workplace: A consultation- Response of the Legal Action Group (2007)
Is it the end of the road for Statutory Minimum Dispute resolution Procedures– Nick Hine May 2008)http://www.tcii.co.uk/images/upload/guest_article_pdfs/11ganick_hine2ddpdf_2173.pdf
United Kingdom: New Acas Code Of Practice on Disciplinary And Grievances Article by Val Dougan Dundas and Wilson Solicitors 28 November 2008
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