UNIT CODE: BAF2105

UNIT TITLE: BUSINESS LAW

GROUP CAT ASSIGNMENT

GROUP MEMBERS

S/N NAMES ADMISSION NUMBER

1 CHARLES KURIA BEDA/2022/49079
2 MORRIS GICHINI BEDA/2022/48898
3 AKINYI MARY BEDA/2022/50182
4 RAHAB SIAMETO BEDA/2022/45405
5 NYADARO BENSON BEDA/2020/92422
6 WINCENT NDANU BEDA/2022/50192
7 JANE NJERI BEDA/2020/90937
8 KELVIN MBUTHIA BEDA/2023/62119
 QUESTION ONE

NEGOTIABLE INSTRUMENT
A negotiable instrument is a document guaranteeing the payment of a specific amount of
money, either on demand or at a set time. It can be transferred from one party to another in
such a way that the transferee becomes a holder in due course, granting certain rights and
privileges. Common examples include checks, promissory notes, and bills of exchange.

FEATURES OF NEGOTIATE INSTRUMENT.

 Transferability: They can be transferred from one person to another, either by
endorsement or delivery, allowing for easy circulation in commerce.
 Bearer or Order Form: They are either payable to the bearer (whoever holds it) or to a
specific person or order.
 Promise or Order to Pay: They contain an unconditional promise or order to pay a
specified amount of money.
 Payment Assurance: They provide assurance of payment to the holder according to the
terms specified on the instrument.
 Legal Recognition: They are legally recognized and enforceable documents governed by
specific laws and regulations.
 Fixed Amount: They specify a fixed amount of money to be paid, ensuring clarity and
predictability in transactions.
 Durability: They are typically made of durable material (e.g., paper or plastic) to ensure
they withstand handling and circulation.
 Date of Maturity: They specify a date of maturity or payment, indicating when the
payment becomes due.
 Currency Specification: They specify the currency in which the payment is to be made,
ensuring clarity regarding the monetary value.
 Place of Payment: They may indicate a specific place where the payment is to be made,
although this is not always necessary for negotiability.

FUNCTIONS OF NEGOTIABLE INSTRUMENTS.

 Medium of exchange-
Negotiable instruments provide a convenient and secure means of conducting commercial
transaction without the need for physical cash.
 Credit instrument-
They can serve as a basis for credit creation since they can be used as collateral for loans.

 Transferability-
They enable the transfer of funds from one party to another even over long distances.
 Record keeping-
Provides a formal record of financial transactions aiding in financial management, auditing
and accountability.
 Reducing risk-
Negotiable instrument often comes with legal protections that reduces the risk of non-
payment.
 Legal protection-
They offer legal protection involved as they provide clear Evidence of the obligation into
cash or use it as a means of payment.
 Liquidity enhancement-
They enhance liquidity by providing a readily negotiable form of financial asset.

TYPES OF NEGOTIABLE INSTRUMENTS.

Main Examples Include: Cheques, bills of exchange, promissory notes,
1. CHEQUE.
A cheque is a written order from an account holder (the drawer) to a bank or financial
institution (the drawee) to pay a specified sum of money to the person or entity named on the
check (the payee). It is a type of bill of exchange drawn on a bank and involves at least two
parties.
It however defers from the bill of exchange in the following ways:
1. It can only be drawn on a banker
2. It is payable on demand
3. It does not require acceptance
4. Non-presentation does not discharge it
5. It is less negotiable
6. It may be crossed generally or specially
Cheques are classified into different types:
 Bearer Cheque: This type of check is payable to the bearer, meaning anyone who
presents the check for payment can receive the funds. Bearer checks are risky because
they can be negotiated by anyone who possesses them.
 Order Cheque: An order check is payable to a specific person or entity named on the
check. Only the payee or someone authorized by the payee can negotiate the check.
 Crossed Cheque: A crossed check has two parallel lines drawn across the face of the
check. It indicates that the check can only be deposited into a bank account and cannot be
cashed over the counter. This adds a layer of security by reducing the risk of theft or
fraud.
 Open Cheque: An open check is payable to the bearer, similar to a bearer check, but it
does not have “Bearer” written on it. It can be cashed over the counter at the bank.
 Post-dated Cheque: This type of check is dated for a future date, after which it becomes
payable. It allows the payer to provide a check in advance, ensuring funds will be
available by the specified date.
 Stale Cheque: A stale check is a check that is no longer valid because it is dated too far
in the past (usually more than six months). Banks may refuse to honour stale checks.
 Certified Cheque: A certified check is a personal check that the bank guarantees will be
honoured. The bank sets aside the funds in the payer’s account and certifies that the check
is genuine. This provides assurance to the payee that the funds are available.

Advantages of using a cheque

 Safety: Cheques provide a safer alternative to carrying large amounts of cash, reducing
the risk of loss or theft.
 Convenience: They offer a convenient way to make payments without the need for
immediate cash or electronic transactions.
 Delayed Payment: Cheques allow for delayed payment, providing flexibility in
managing finances and coordinating payments with income.
 Record Keeping: They leave a paper trail, facilitating record-keeping and financial
management for individuals and businesses.
 Proof of Payment: When deposited or cashed, cheques serve as proof of payment,
helping to resolve disputes and verify transactions.
 Budgeting: Cheques can assist in budgeting by providing a structured method for making
payments and tracking expenses.
 Control: They allow the payer to maintain control over when funds are disbursed, as they
can choose the date for the cheque to be cashed.
 Widely Accepted: Cheques are widely accepted by individuals, businesses, and
organizations as a form of payment.

Disadvantages of a cheque
 Processing Time: Cheques may take time to clear, leading to delays in accessing funds,
especially when compared to electronic payments.
 Risk of Fraud: Cheques can be subject to fraud, including forgery, alteration, and
bouncing due to insufficient funds.
 Manual Handling: Cheque processing involves manual handling, which can lead to
errors, delays, and additional administrative costs.
 Costly for Banks: Processing and clearing cheques incur costs for banks, which may be
passed on to customers in the form of fees or charges.
 Limited Acceptance: Some individuals and businesses may be reluctant to accept
cheques due to concerns about fraud, clearance times, and administrative burdens.
 Non-Sufficient Funds (NSF) Fees: If a cheque bounces due to insufficient funds in the
payer’s account, both the payer and payee may incur fees from their respective banks.
 Record Keeping Requirements: Maintaining records of issued and received cheques
requires diligent record-keeping, which can be time-consuming and cumbersome.
 Inconvenience for Recipients: Recipients of cheques must deposit or cash them at a
bank, which may be inconvenient, especially if they do not have easy access to banking
services.
 Risk of Loss: Cheques can be lost or misplaced, leading to difficulties in tracking
payments and potential disputes.

2. BILLS OF EXCHANGE
A bill of exchange is an unconditional Order in writing addressed by one person to another,
signed by the person giving it requiring the person to whom it is addressed to pay on demand
or at a fixed or determinable future time a sum certain in money to or to the order of a
specified person or to the bearer.
Elements or essentials of the definition:
1. It is an unconditional written order i.e. not a request.
2. Addressed by person to another
3. It must be signed by the person giving it
4. It demands payment of a sum certain in money.
5. The sum must be paid on demand or at a fixed or determinable future time.
6. The sum is payable to a specified person, his order or the bearer.

Classification of bills of exchange:

a) Based on Parties:
 Trade Bill: A bill of exchange drawn by the seller (drawer) on the buyer (drawee),
requiring the buyer to pay a specified sum of money at a future date.
 Accommodation Bill: A bill of exchange drawn and accepted to provide temporary
finance or to facilitate a transaction between parties, often used as a means of credit
enhancement.
b) Based on Time:
 Sight Bill: A bill of exchange payable upon presentation (sight) to the drawee for
immediate payment.
 Term Bill: A bill of exchange payable at a specified future date after acceptance by the
drawee.

c) Based on Negotiability:
 Negotiable Bill: A bill of exchange that can be transferred to a third party, enabling the
transferee to become the holder in due course with certain rights.
 Non-negotiable Bill: A bill of exchange that cannot be transferred to a third party,
restricting its negotiability.
d) Based on Purpose:
 Trade Bill: Used primarily in commercial transactions to facilitate the purchase and sale
of goods and services.
 Banker’s Bill: Issued by banks for various purposes, such as financing trade, providing
credit facilities, or transferring funds between parties.
e) Based on Form:
 Inland Bill: A bill of exchange drawn and payable within the same country.
 Foreign Bill: A bill of exchange drawn and payable in different countries, involving
international trade transactions.
Rules relating to representation of bills for acceptance
1. The bill maybe presented by the drawee or his agent-
2. It must be presented at a reasonable hour on a business day.
3. It must be presented to the drawee and if dead, to his personal representative.
4. If the drawee has been declared bankrupt, the bill must be presented to him or to his
trustee in bankruptcy.
5. If trade custom and usage permits, it may be done thought the post.
6. However, presentation of a bill for acceptance will dispensed with if:
i. The drawee is a fictitious person.
ii. It cannot be effected even with the exercise of reasonable diligence

Presentation of a bill for payment

On maturity of a bill, it must be presented to the acceptor for payment. Its presentation is
governed by the following rules: -
a) If payable on demand, it must be presented within a reasonable time of acceptance or
negotiation.
b) If payable in future, it must be presented on the date it falls due or within three days of
grace.
c) It may be presented by the payee or his agent.
d) It must be presented to the acceptor at the agreed place i.e. his place of business or
residence.
e) It must be presented to the acceptor, however, if dead to his personal representative.
f) If the acceptor has been declared bankrupt it must be presented to him or his trustee in
bankruptcy
g) It must be presented at a reasonable hour on a business day.
h) If trade custom or usage permits, presentation may be effected by post.

Dishonoured bills
A bill is said to be dishonoured if:-
1. Presentation for payment is exercised by law
2. Payment is refused.
It is the duty of the payee to notify the party liable the fact of the dishonour and to have it
noted and or protested.
Rules relating to notice of dishonour
1) The notice may be given by or on behalf of the payee
2) It may be given in the agent’s or the payee’s name
3) The notice may be oral or written
4) If written it need not signed
5) It must be given within a reasonable time of the dishonour
6) Return of the dishonoured bill is sufficient notice.
7) It must be given at a reasonable time on a business day.
8) If effected by post it is effective when the letter is posted.

3. PROMISORY NOTE.
A promissory note is a written promise made by one party (the maker) to pay a specific sum
of money to another party (the payee) either on demand or at a specified future date. It is an
unconditional promise to pay and does not involve a third party.
A promissory note differs from a bill of exchange in that: -
 It is a promise to pay made by the debtor it does not require presentation for acceptance
nor does it require acceptance. However, it is a negotiable instrument Capable being
negotiated by one person to another in commercial transactions.

Characteristic/Elements/Essential of the Definition

1. It is an unconditional written promise made by a person to another
2. It must be signed by the maker
3. It contains a promise to pay a sum certain in money.
4. The sum is payable on demand or at a fixed or determinable future time.
5. The sum is payable to a specified person, his order or the bearer
Advantages of using a promissory note
1) Flexibility in Borrowing: Promissory notes provide flexibility in borrowing money, as
they can be tailored to suit the needs of both the borrower and the lender. Parties can
negotiate terms such as repayment schedule, interest rate, and collateral.
2) Simple Documentation: Compared to other forms of borrowing, such as bank loans,
promissory notes involve relatively simple documentation, making the borrowing process
quicker and more straightforward.
3) Customizable Terms: Parties have the freedom to customize the terms and conditions of
the promissory note to meet their specific requirements, including the amount borrowed,
repayment schedule, interest rate, and any applicable fees.
4) No Collateral Required: Depending on the relationship between the parties and the
borrower’s creditworthiness, promissory notes may not require collateral, making them
accessible to a wider range of borrowers.
5) Privacy: Promissory notes offer a level of privacy, as they are typically private
agreements between the borrower and the lender, without the need for involvement from
third-party financial institutions.
6) Legal Enforceability: Promissory notes are legally enforceable documents that provide a
formal record of the borrower’s promise to repay the debt according to the agreed terms.
In case of default, the lender has legal recourse to pursue repayment through legal
channels.
7) Cost-Effective Borrowing: Borrowers may find promissory notes to be a cost-effective
borrowing option compared to traditional bank loans, as they may incur lower fees and
interest rates.
8) Fast Access to Funds: Promissory notes can provide borrowers with quick access to
funds, allowing them to meet immediate financial needs without the lengthy approval
process associated with bank loans.
9) Builds Trust: Using a promissory note can help build trust between the borrower and the
lender, as it formalizes the borrowing arrangement and demonstrates a commitment to
fulfilling repayment obligations.

Disadvantages of using a promissory note.

1) Risk of Default: There is a risk that the borrower may default on the promissory note,
failing to repay the borrowed amount according to the agreed terms. This can result in
financial losses for the lender and may necessitate legal action to recover the debt.
2) Lack of Collateral: Unlike secured loans, promissory notes may not require collateral to
secure the debt. This means that lenders have less recourse in case of default and may
face challenges in recovering the loan amount.
3) Limited Legal Protections: While promissory notes are legally enforceable documents,
they may offer fewer legal protections compared to formal loan agreements or mortgages.
Lenders may encounter difficulties in enforcing repayment if the borrower disputes the
terms of the note.
4) Higher Interest Rates: Borrowers with limited credit history or lower credit scores may
be subject to higher interest rates on promissory notes compared to traditional bank loans.
This can result in higher borrowing costs over time.
5) Limited Borrowing Amounts: Depending on the lender’s willingness to extend credit
and the borrower’s creditworthiness, promissory notes may have limitations on the
amount that can be borrowed. This could restrict access to sufficient funds for larger
financing needs.
6) Complexity in Negotiation: Negotiating the terms of a promissory note, including the
repayment schedule, interest rate, and other conditions, can be complex and may require
legal expertise. Parties may face challenges in reaching mutually agreeable terms.
7) Repayment Burden: Borrowers are obligated to repay the borrowed amount according to
the terms of the promissory note, which may impose a significant financial burden,
especially if unexpected circumstances arise that affect their ability to make timely
payments.
8) Limited Privacy: While promissory notes offer a level of privacy compared to traditional
bank loans, they still involve sharing personal and financial information with the lender.
Some borrowers may prefer more privacy in their financial dealings.
9) Legal Costs: In case of default or disputes, pursuing legal action to enforce repayment of
a promissory note can incur legal costs and time-consuming legal proceedings, adding to
the overall expense of the borrowing arrangement.
 QUESTION TWO

HIRE PURCHASE CONTRACTS

Definition: A hire purchase contract is a legal agreement between a buyer (hirer) and a seller
(owner) where the buyer can acquire an asset by paying in instalments over a specific period.
Significance: Hire purchase contracts are commonly used in business transactions as they
provide a flexible payment option for buyers and allow sellers to sell goods on credit.

Key elements and features of hire purchase contracts:

 Parties involved: The buyer (hirer) and the seller (owner) are the main parties in a hire
purchase contract.
 Payment terms: The buyer makes regular instalment payments to the seller over a
predetermined period.
 Ownership transfer: The buyer gains ownership of the asset after completing all the
instalment payments.
 Condition of the asset: The contract may specify the condition of the asset and any
maintenance responsibilities.

Legal implications and potential issues in hire purchase contracts:

 Breach of contract: If either party fails to fulfil their obligations, it may lead to a breach
of contract.
 Default and repossession: If the buyer defaults on payments, the seller may have the
right to repossess the asset.
 Consumer protection: Some jurisdictions have laws in place to protect consumers in hire
purchase agreements.
 Dispute resolution: In case of disputes, parties may resort to negotiation, mediation, or
legal action.
 DIFFERENCE BETWEEN HIRE PURCHASE AND CONDITIONAL SALE

Credit sale agreement – This makes it the customer’s legal obligation to buy in that;

1. It is a contract of sale
2. The property in goods passes to the buyer as soon as the 1st instalment is made

Conditional sale- This contract makes it the buyer’s obligation to buy but property in goods
passes to the buyer only if the conditions that form the subject matter of the sales have been
made

PROVISIONS RELATING TO HIRE PURCHASE

1. Before the Hire Purchase Agreement is entered into the owner is bound to notify the
prospective Hirer the cash price of the goods. However, the owner is not bound to do so
if:
 The Hirer has selected the goods or similar goods by reference to a catalogue Stating the
Cash Price
 The Hirer selected the goods or similar goods from a selection which stated the Cash
price.
2. The Hire Purchase agreement must be written.

Contents of the agreement

 A description of the parties.

 A description of the goods.
 The cash and Hire Purchase price.
 Number of Instalments.
 Amount and when payable.
 It must be signed by the Hirer and by or on behalf of the owner.

REGISTRATION OF HIRE PURCHASE

The Registrar may refuse to register a Hire Purchase Agreement if;
1. It is not in the English Language
2. It is presented after 30 days of its execution
3. Stamp duty or Registrar fee payable has not been paid
 Registration of Hire purchase, serves two purposes:
i. It protects 3rd party who may purport to buy the goods from the Hirer.
ii. It is a revenue generation mechanism for the state EFFECTS OF NON-
REGISTRATION

In the event that the agreement is not registered the following will occur;
1. The agreement cannot be enforced by any person against the Hirer.
2. Any contract of guarantee made in relation to the Hire Purchase Agreement is also
Unenforceable
3. The owner cannot enforce the right to repossess the goods from the Hirer.
4. Any security given by the Hirer under the Hire Purchase Agreement or by the Guarantor
under the contract of guarantee is unenforceable.

IMPLIED TERMS (CONDITIONS & WARRANTIES)

The Hire Purchase Act implies both conditions and warranties in all Hire Purchase
agreements.

Conditions include;

a. Right to sell – an implied condition that the owner will have the right to sell the goods
when the property is to pass
b. Merchantable Quality – Unless the goods are second hand and the agreement so
provides, there is an implied condition that they would be of merchantable quality.
c. Fitness for Purpose – Where the hirer expressly or by implication makes known to the
owner the particular purpose for which the goods are, there is an implied condition that
the goods would be reasonably fit for the purpose.

Warranties include;

i. Quiet Possession – There is an implied warranty that the hirer will have and enjoy
quite possession of the goods.
ii. Free from charge or encumbrance – Under sec8(1)© of the Act, there is an implied
warranty that the goods shall be free from any charge or encumbrance in favour of a
third party when property is to pass.
 REPOSSESSION OF GOODS

 If the owners possess the good in contradiction to the act then;

 The agreement terminates
 The hirer is discharged from all liability under the agreement
 The hirer is entitled to recover all sums paid under the agreement or the contract of
guarantee.
 The guarantor is entitled to recover any sum paid under the contract of guarantee or under
the security given.

The section does not adequately protect the hirer in that:

 The hirer must pay too much to be protected by the section.

 Property in the goods does not pass to the hirer even after paying 2/3 of the hire purchase
price
 The court may still order the repossession of the goods

DUTIES AND OBLIGATIONS UNDER HIGHER PURCHASES AGREEMENT

Duties of the Owner

i. Duty to notify the hirer of the cash price

ii. The owner must send a copy of the Hire Purchase Agreement, to the Hirer within 21 days
of execution
iii. Duty to put the Hirer in possession of the goods let under a Hire Purchase.
iv. Duty to compensate the hirer in the event of defective goods
v. The owner is bound to disclose to the hirer any defects in the goods or in his title

Duties of the Hirer

 Reasonable care- It is the duty of the hirer to exercise reasonable care in relation to the
goods let under a hire purchase agreement. However the hirer is not liable for ordinary wear
and tear.
 Take Delivery-The hirer is bound to take delivery of the goods under hire purchase
agreement.
 Pay Instalments
  Continue Hiring-It is the duty of the hirer to continue hiring the goods for the agreed
duration. This obligation does not deny the hirer the right to terminate the agreement.
 Notice of change of location of goods-It’s the duty of the hirer to inform the owner any
change in the location of the goods.
Rights of the hirer
a. He is entitled to be notified of the cash price of the goods.
b. He is entitled to a copy of the Hire Purchase Agreement within 21 days of the execution
of the agreement.
c. He is entitled to Indemnity for any loss or liability arising by reason of any defect in the
goods or of title.
d. He is entitled to quiet possession of the goods let under the Hire Purchase Agreement
e. He is entitled to damages for any breach of contract by the owner
f. He has the right to terminate the Hire Purchase Agreement at any time before the final
instalment falls due.
TERMINATION OF HIRE PURCHASE
The hirer before the final instalment may terminate the agreement by;
i. Giving a written notice of termination
ii. Returning the goods
Once this is done the depreciation clause or the minimum payment comes into play in which
case the hirer has to pay;
i. All instalments due up to the termination day.
ii. The amount by which one half of the hire purchase price exceeds the total amount paid or
such lesser amounts as the agreement may provide.
 QUESTION THREE

CONTRACT EMPLOYMENT

What is an employment contract?

An employment contract is an agreement that covers the working relationship between a

company and an employee. It allows both parties to clearly understand their obligations and
the terms of employment.

More specifically, an employment contract can include:

 Salary or wages: Contracts will itemize the salary, wage, or commission that has been
agreed upon.
 Schedule: In some cases, an employment contract will include the days and hours an
employee is expected to work.
 Duration of employment: An employment contract will specify the length of time the
employee agrees to work for the company. In some cases, this might be an ongoing
period of time. In other cases, it might be an agreement set for a specific duration. At
other times a minimum duration is laid out, with the possibility of extending that period.
 General responsibilities: Contracts can list the various duties and tasks a worker will be
expected to fulfil while employed.
 Confidentiality: Although you may have to sign a separate non-disclosure agreement,
some contracts include a statement about confidentiality.
 Communications: If an employee's role involves handling social media, websites, or
email, a contract might state that the company retains ownership and control of all
communications.
 Benefits: A contract should lay out all promised benefits.
 Future competition: Sometimes, a contract will include a noncompeting agreement or
noncompeting clause (NCC). This is an agreement stating that, upon leaving the
company, the employee will not enter into jobs that will put them in competition with the
company. Often, an employee will have to sign a separate NCC, but it might also be
included in the employment contract.
COPARISON BETWEEN EMPOYER AND EMPLOYEES

1. Employees provide services or perform tasks for a company, while employers hire and
manage employees.
2. Employees receive compensation in salaries or wages, whereas employers pay the
salaries and provide benefits.
3. Employees follow company policies and report to supervisors, while employers create
policies and oversee the business.

DUTIES OF AN EMPLOYER
The duties of an employer include;
 Payment of wages-Provide agreed upon compensation in timely manner.
 Safe working condition- Ensure a safe and a healthy environment adhering to safety
regulations and standard.
 Termination procedure-Follow fair and legal termination procedures, Providing notice or
compensation required by law.
 Privacy-Respect and protect employees privacy rights particularly concerning personal
information.
 Clear Communication-Communicate clearly with employees about their roles,
expectation and any changes in employment terms.
 Equal opportunities-Provide equal opportunities and fair treatment to all employees,
regardless of gender, race, religion and other protected characteristics.
 Reasonable accommodation-Make reasonable accommodation for employees with
disabilities or special needs
 Giving the employees a place to work and the tools, equipment and other things they need
to do their work.
 Following the federal and state laws for payment, safety, reporting, and fair treatment.
 Respecting the duty of care, trust, confidence and fidelity towards the employees.

RIGHTS OF AN EMPLOYER
Employers have the following rights;
 To provide safe working conditions.
 To hire and dismiss workers providing they are following proper procedures.
 To expect reasonable work performance from their staff.
 To set wages, work hours, and benefits.
 To maintain a discrimination-free workplace.

DUTIES OF AN EMPLOYEE
Below are the Responsibilities of employees towards their employers:
 The first and foremost duty of any employees is to carry out the job he has been hired to
do.
 It’s also the employee’s duty to do his job carefully and sincerely.
 As employees, they must avoid putting themselves or others in a dangerous position.
 The employees are liable to maintain all the rules of the organisations while carrying out
their works.

RIGHTS OF AN EMPLOYEE
Employees have the following rights;
 Right to be free from unlawful discrimination and harassment based on race, colour,
religion, sex, national origin, disability, age, or genetic information.
 Right to a safe and healthy work environment free of dangerous conditions, toxic
substances, and potential safety hazards.
 Right to receive equal pay for equal work.
 Right to take breaks and rest periods during the workday.
 Right to join trade unions and engage in collective bargaining.
RESPONSIBILITIES OF EMPOYERS TOWARDS EMPLOYEES
The responsibilities of employers towards employees are crucial for maintaining a healthy
and productive work environment. They include;
1. Providing a Safe Work Environment:
Employers must ensure that the workplace is safe and free from hazards. This includes
addressing physical, chemical, and biological risks. Regular safety inspections, proper
equipment maintenance, and adherence to safety protocols are essential.
2. Supplying Necessary Tools and Equipment:
Employers should furnish employees with the tools, equipment, and resources needed to
perform their tasks effectively. Whether it’s a computer, machinery, or protective gear,
providing the right tools is vital.
3. Training and Knowledge Enhancement:
 Employers are responsible for training employees adequately. Equipping workers with
the necessary knowledge and skills ensures efficient job performance.
4. Timely Payment of Salary and Benefits:
Employers must fulfil their financial obligations promptly. This includes paying salaries,
benefits, and any agreed-upon compensation.
5. Health, Safety, and Welfare of Employees:
Employers must prioritize the well-being of their workforce. Measures to safeguard
health, such as access to medical facilities and mental health support, fall under this
responsibility.
6. Compliance with Legal and Ethical Standards:
Employers should adhere to employment laws and regulations. Treating employees fairly,
preventing discrimination, and respecting their rights are ethical imperatives.
7. Consultation and Communication:
Employers should involve employees in decision-making processes. Consulting them
before making significant changes to employment terms fosters transparency.

TYPES OF EMPLOYMENT
1. Employment Contract:
An employment contract is a legally binding agreement between an employer and an
employee, freelancer, independent contractor, or subcontractor. It outlines the terms of
employment, ensuring that both parties understand their roles and responsibilities.
Examples of employment agreements include:
 Employment contract
 Independent contractor agreement
 Consulting agreement
2. Employment Status:
Employment status refers to the legal classification of a worker, which determines their
rights and protections. There are two primary types:
a) Employee: Hired individuals who receive wages for the benefit of the employer.
Employees are entitled to minimum wage, overtime regulations, and other protections.
Subcategories of employees:
 Full-Time: Typically work 40 hours a week.
 Part-Time: Work less than 30 hours per week.
 Temporary: Hired for a specific duration or project.
 Seasonal: Employed during peak seasons in certain industries.
 Leased: Hired through staffing agencies and on the employer’s payroll.
 Self-Employed: Individuals who work for themselves and manage their own business
affairs.
b) Contingent Workers:
Contingent workers are not traditional employees but play a crucial role in modern labour
markets.
They include:
 Freelancers
 Contractors
 Temporary workers
 Gig economy workers

WHAT IS TERMINATION OF A CONTRACT?

Parties. This. Only. Contract termination can occur for various reasons, including breaches of
contract, mutual agreement, or unpredictable external factors.

WHAT CAN LEAD TO TERMINATION OF A CONTRACT

Contract termination occurs when a contract is ended before all parties have fulfilled their
obligations. Some common reasons for contract termination include;

a) Breach of Contract: If one party fails to meet their obligations or acts inconsistently with
the contract terms, the non-breaching party can terminate the contract. However, the
breaching party may still be liable for damages.
b) Impossibility of Performance: When fulfilling the contract becomes impossible due to
unforeseen events (such as changes in the law), parties may choose to terminate the
contract.
c) Mutual Agreement: Sometimes, all parties involved prefer to end the contract early
because it no longer provides value. In such cases, they can mutually agree to terminate it.

SUSPENSION OF THE CONTRACT OF EMPLOYMENT

Suspension of the employment contract is a temporary termination of the employment
relationship. The employment contract is void during the suspension period, but the debts
continue as in the period before the suspension period. Generally, you can only legally
 suspend an employee if the right exists in the employment agreement, the relevant award or
enterprise agreement.
In the context of civil law, two kinds of suspension are acknowledged;
1. The suspension of the contract that can be put down to the erroneous conduct of one of the
contracting parties.
2. The suspensions for which an extraneous cause or circumstances beyond one of the parties’
control can be blamed.

WHAT CAN LEAD TO SUSPENSION ON THE CONTRACT EMPLOYMENT

Contract employment can be suspended under various circumstances. Here are some
reasons that might lead to suspension:

1. Gross Misconduct: If an employee is being investigated for gross misconduct, suspension

may be appropriate. This ensures that the employee does not remain in the workplace during
the investigation, reducing risks to the business and other employees.
2. Health and Safety Risks: When an employee’s behaviour poses serious and imminent
risk to the health or safety of others, suspension may be necessary. This protects everyone
involved and allows for a thorough investigation.
3. Business Reputation and Viability: Conduct that jeopardizes the reputation, viability, or
profitability of the employer’s business could warrant suspension. This ensures that the
business remains protected while the situation is assessed.