AAT L2 Introduction to Business and Company Law 4 — Questions and Answers
Question 1: The Employment Rights Act 1996 provides employees with which of the following rights?
- The right to set their own working hours without restriction
- The right to a written statement of employment terms, protection from unfair dismissal, and redundancy pay entitlement (Correct answer)
- The right to unlimited sick pay
- The right to choose their own manager
Correct answer: The right to a written statement of employment terms, protection from unfair dismissal, and redundancy pay entitlement
The Employment Rights Act 1996 provides key employee rights including a written statement of employment particulars within two months, protection from unfair dismissal (after qualifying service), statutory redundancy pay, and minimum notice periods.
Question 2: A company is incorporated by registering with:
- HMRC
- Companies House (Correct answer)
- The Bank of England
- The local council
Correct answer: Companies House
A company is legally created (incorporated) by registering with Companies House. The application must include the memorandum and articles of association, details of directors and the registered office, and a statement of capital. Companies House then issues a certificate of incorporation.
Question 3: Vicarious liability means:
- A person is liable for their own negligence only
- An employer can be held liable for wrongful acts committed by employees in the course of their employment (Correct answer)
- A company is never liable for its employees' actions
- Only directors can be held liable for company actions
Correct answer: An employer can be held liable for wrongful acts committed by employees in the course of their employment
Under the principle of vicarious liability, an employer can be held legally responsible for the wrongful acts (torts) of employees committed during the course of their employment. This includes negligence and other wrongful acts carried out while performing job duties.
Question 4: The difference between void and voidable contracts is:
- There is no difference — they mean the same thing
- A void contract has no legal effect from the start; a voidable contract is valid until one party chooses to set it aside (Correct answer)
- A void contract can be enforced; a voidable contract cannot
- Voidable contracts are always in writing; void contracts are always verbal
Correct answer: A void contract has no legal effect from the start; a voidable contract is valid until one party chooses to set it aside
A void contract is treated as if it never existed — it has no legal force from the outset (e.g., a contract for an illegal purpose). A voidable contract is valid and binding unless and until one party (the innocent party) chooses to avoid it (e.g., due to misrepresentation or duress).
Question 5: Under UK law, an employer must provide employees with a written statement of employment particulars within:
- One week of starting work
- The first day of employment (principal statement) with remaining details within two months (Correct answer)
- Six months of starting work
- It is optional — there is no legal requirement
Correct answer: The first day of employment (principal statement) with remaining details within two months
Since April 2020, employers must provide a principal statement of key employment terms on or before the employee's first day of work, with the remaining particulars provided within two months of the start date. This is a legal requirement under the Employment Rights Act 1996.
Question 6: Negligence in law requires the claimant to prove:
- That the defendant intended to cause harm
- That the defendant owed a duty of care, breached that duty, and the breach caused foreseeable loss or damage (Correct answer)
- Only that they suffered a loss
- That a written contract existed between the parties
Correct answer: That the defendant owed a duty of care, breached that duty, and the breach caused foreseeable loss or damage
To succeed in a negligence claim, the claimant must prove three elements: (1) the defendant owed them a duty of care, (2) the defendant breached that duty by falling below the required standard, and (3) the breach caused foreseeable harm or loss to the claimant.
AAT L2 Introduction to Business and Company Law 4
The Employment Rights Act 1996 provides employees with which of the following rights?