Legal system refers to a procedure and process for interpreting and enforcing the law. It elaborates rights and responsibilities in variety of ways. English legal system administrated by courts in England and Wales, which rule on both civil and criminal matters. English legal system is considered as mother of all common laws. Business law governs businesses and considered as branch of civil law (Beamish, 2013). Commercial law regulates corporate contracts, manufacturing of goods, hiring practices and sales of goods. In this project report information regarding existing business law in UK and passage of bill through parliament will be discussed. This also covers problem that Pegasus is going through. Various methods and provisions will be provided to solve these problems.
Division of law:
The United Kingdom has three different legal system: one each for England and Wales, Scotland and Northern Ireland. The court of appeal which encompasses only England and Wales, consist only civil division and criminal division. Civil division hears appeal against decision of high court and criminal division hears appeal about alleged errors of law in magistrates and crown courts. Constitution of UK is formed partially in written formate. Laws are implemented by government in UK.
Sources of law are the origins of law, the binding rules that helps to govern a territory. UK consist of different laws and different sources are included to form these laws. Four principal sources of UK law are legislation, common law, European union law and the European convention on human rights.
- LEGISLATION- Legislation is a law created by legislature. The most important pieces of legislation are act of parliament. Principal legislature is the UK parliament, which is based in London. This is the only body that has power to pass laws in all the four countries (Pathak, 2013). The UK parliament consist of House of Commons and House of Lords. The house of commons consist of 650 peoples as member of parliament. These members represents a geographical constituency, whose electors vote using a “ first-past-the-post” system. Each elector has one vote and members who get highest vote will be elected and MP of that constituency. The house of lords consist of 800 peoples, of whom 600 is selected by queen on recommendations of Prime Minister. The other members are those who have inherent title of “Lord” and “Lady” and senior Bishops of church of England.
- COMMON LAW- The legal system of England and Wales is based on common law, so decisions of senior court becomes part of law.
- EUROPAN UNION LAW- The UK is a member state of the European union, which means that EU laws will overrule laws made under UK laws.
- THE EUROPEAN CONVENTION ON HUMAN RIGHTS- As a member state of council of Europe, UK is a signatory to European convention of human rights. This provides UK courts a law to protect rights of general public.
Some other sources of UK law are as follows-
- CASE LAWS- Decisions of court is fundamental and primary source of UK law. Successful development of law depends on relevant cases that provides facts, issues and decision as well as legal principals on basis of which decision is given.
- TEXTBOOKS- Textbooks are one of the starting place to search for legal topics. Textbooks written by academics for students e.g. Smith and Hogan's criminal law. Books includes case laws and their decisions e.g. cases and material on criminal law by Dine.
- LAW JOURNALS- Range of general is extensive. Some of them provide common information and some of them are specific to a particular law. Journals consists a mix of articles and cases that makes law easy to understand.
UK parliament has two houses and one of them is totally governed by Queen of England. She is highest authority to take decisions in UK, any law to pass as an act requires approval of Queen. This reduces intervention of government in decision making. Parliament is highest authority to pass laws in a legal system. Decision of Queen to form laws in country is very important and this leads to a week legal system in country.
In a democracy, like UK nobody is above the law. Thousands of new laws are passed each year in UK. A proposed new law is called as Bill. Bill is a draft of a legislative proposal and presented to both the houses of parliament. (Hossain, 2013.) A bill must be agreed by both the houses of parliament and receive royal assent from the Queen before they become act of parliament.
To know affect of an act over a business by Pegasus, applicability of an act must be known. To have detailed knowledge regarding an act its suggested to go through content of the act. Content includes definitions, nature of transactions and businesses that are covered by particular act.
Pimlico Plumbers Ltd. V Smith turned as a benchmark case in history of employees. Pimlico Plumbers Ltd. is a UK based company in which Smith was self- employed form last six years. After suffering from heart attack Smith was unfairly dismissed despite of being presented as self employed from past six years. He was not paid any sick leave and also discrimination is phased by him from employees. Case was centred around legal categorisation of Pimlico's business model.
Pimlico Plumbers Ltd. considered Smith as self- employed and not an employee of the company. Smith was offered a percentage of delivery charges as pay (Weske, 2012.). Drivers must wear Pimlico uniform and vans are connected with trackers and a identity card is provided to each one of them. Drivers can appoint any other person on their place but they will also be controlled by Pimlico Ltd.
Supreme court rejected appeal of Pimlico Plumbers Ltd. to consider Smith as self-employed as court considered Smith as a normal employee. It was mentioned that throughout the week Smith represent company as all instructions are followed. Only personal performance to work for five days in a week is a personal concern of Smith. After having a attack reducing in working days do not give right to Pimlico to dismiss him and pleading it as he was self-employed.
Supreme court held that Smith is considered as an employee of the company and posses employment rights to receive sick pay, holiday pay. He is a worker performing under contractual agreement and controlled by Pimlico Ltd, also restrict drivers to work for competitors after leaving company.
Pegasus also offers a percentage of delivery charges to their drivers. Prior permission of Pegasus is required to substitute any driver and that will also be controlled by the company. Drivers must wear Pegasus uniform and drive branded vans tracked by company and wear Pegasus identity card. Schedule is sent by company and all drivers work is controlled by company. The Contract executed between Pegasus and drivers has words like “ gross- misconduct” and “wages”. According to supreme court judgement all these criteria make workers of Pegasus its employees.
Relation of an employee and employer is governed by employment act. To deal with various disputes in employment Pegasus should read various case laws related to employees and have knowledge regarding employment act (Lambooy, 2014). Decisions of previous case laws will help company to take decisions that are fair and according to law.
A registered company is a company whose name is in official records of registrar of companies. Pegasus will be considered a registered company in UK when it has branch or whole company that is operated in UK only. Certain steps that are needed to be followed to form a company in UK are:-
- Before forming a company structure of company must be selected. Various factors must be considered to select structure of company.
- Choose name of company that will be registered to registrar. Name should not be resemble to any existing company.
- Full address of office in UK will be provided to registrar to make it a registered address of company and further communications can be sent to that address.
- Object of company for which it is established is mentioned.
- Details about share capital structure of company is provided to registrar.
- Information regarding appointment of directors will be provided to registrar.
- Details about members who are subscribers of MOA will be provided to registrar.
To register a company MOA (Memorandum Of Association) and AOA (Articles Of Association) will be prepared by the company. MOA is a charter document for a company that shows relation of company from outsiders (Kemp, 2014). AOA provides information regarding rules and regulations to be followed in the company.
A company to have a separate legal entity in eyes of law need to follow all this procedure to register it under Companies Act, 1862. As per Salomon V A Salomon and company Ltd. if proper procedure is not followed then it will not be considered as a registered company and benefit of separate legal entity will not be enjoyed.
A company act through two body's of people- shareholders and board of directors. The board of directors are in charge of management of companies business. They make strategies and operational decisions of the company and responsible to meet statutory obligations of company. Director manages day-to-day operations of a company and take financial decisions to make investment or borrow funds.
Capital of a company can be raised in many such as by issuing shares to public, borrowing from financial institution, issuing debt instruments such as debentures etc. If rising funds through borrowing is not financially viable then funds are raised through issue of shares to public at large. To rise funds from public a company must be a registered in stock exchange of UK. Rising capital through issue of shares creates diverse shareholding. Funds that are raised through borrowing creates a charge on company as interest is compulsory to pay. To invest funds in shares company provides dividend to shareholders as return on investment.
Issue that to be deal by Pegasus company is to find alternative of filling a dispute in a legal court system as it expensive, time consuming and confusing. Filling a suit in court take years to receive final verdict on that case. Time gape reduces befit that can be enjoyed if decision was made before few years. Alternate Dispute Resolution (ADR) is a process and technique that involves settling of disputes outside courtroom. In ADR both disagreeing parties to reduce litigation of legal system settles at a common term.
When dispute between parties is resolved without intervention of court in informal manner then it is termed as mediation (Apsalyamova and et. al., 2015). To settle a dispute a person acts as a mediator who communicate with both the parties and ascertain facts clearly. On the basis of analysis mediator make a settlement on which both parties get agree.
Arbitration is another form of settling a dispute outside the court. The dispute is decided by one or more persons, which renders “Arbitration Award”. Arbitration award is binding on both the parties on legally enforceable by law. It is considered a process to speedily disposing disputed cases. Arbitration process of settling a dispute is suitable for Pegasus as it will reduce cost and provides decision on time.
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From the above report it is concluded that, various rules and regulations are followed in English legal system. And this legal system is a combination of various sources from which rules and laws are collected and formed as one law. Procedure to pass any law in UK parliament is quite simple. A famous case law of Pimlico Plumbers Ltd. Is considered as benchmark to resolve issue of employees in Pegasus company. Registration process of a company is mentioned which involves certain steps that need to be followed and role of a director in a company is fully mentioned. This helps to know about different methods to rise capital for a company (Kidholm and et. al., 2012). Procedure that helps to resolve disputes outside court with minimum litigation is discussed for benefit of Pegasus company. Arbitration is considered as most effective method to resolve dispute for Pegasus company.