Research Proposal: Labor Law Specifically in Cases of Termination of the Employment Contract

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Termination of Employment Contract in Labor Law

In the United States and other OECD countries, employers are generally constrained by statutes to implement unjust dismissal of employees. However, in the United States, employers could terminate non-labor union members at will and without cost. There is no comprehensive labor law in all the 50 states in the United States. However, most states have protective legislation for employees and based on the protective legislation against unjust employee's termination, increasing number of employees have been involved in civil litigations where employees generally claim that they have terminated unjustly or wrongfully by their employers. Wrongful termination of contract employment has increased in number since 1980. Typically, employees have filed many cases against multinational corporations as well as small and medium companies claiming large sum of money as damages for wrongfully terminate employment contract. Some employees who filed cases against employers were individuals who were not generally member of union. Workers from all level also file wrongful termination suits. (Swaitkowski, 2008). Wrongful termination leads to large financial rewards where courts generally ask employers to pay plaintiffs substantial amount of money because of wrongful dismissals.

Research Objective

Objective of this proposal is to explore the cases involving the termination of employment contract in labor law.

Research Problem

In the United States, the OECD (Organization for Economic Co-operation and Development) members and other countries around the world, there are growing cases of termination of employment contracts where the policy makers, law makers and private organizations are unable to control. The major factor leading to the increase in the number of cases is that growing number of employees have known their rights and they have understood that there are limitations to the termination of employment contracts. Another cause leading to the increase in the court cases with references to employment termination is the issue of ill-written contract agreement that fail to provide a comprehensive contract agreement. Despite the growing cases of termination of employment contract, there is still paucity of comprehensive research study that focus on the topic. This study attempts to fill the gap by exploring different cases involving the termination of employment contracts. Analysis of different cases on employment contract termination will assist the research proposal to identify the solutions in order reduce the growing cases of employment contract termination. The research will attempt to address the problem by answering the following research questions.

Research Questions

1. What are the factors leading to the growing number of cases involving employment contract termination?

2. To what extent is the increase in the number of cases relating to the termination of employment contract in the United States?

3. What are strategies that could be employed to reduce cases involving the employment contract termination?

Significance of the Study

The study will provide several contributions:

First, the study will enhance greater understandings of private employers on the growing cases of termination of employment contract. This understanding will make private employers to understand that they need to follow the law strictly before they can terminate employment contract with employees.

Moreover, the study will enhance greater understanding of the law and policy makers in different countries about the growing number of cases on the termination of employment contract. This study will make increasing number of states in the United States that do not have a clear-cut labor law concerning the termination of employment contract to include the law in their legal statues. This law will guide the employment relationships between employers and employees since there is a generally believed that lack of clear-cut law on the termination of employment contract leads to the increase in the cases of employment contract termination in the United States.

Scope of the Study

This study covers the "cases of termination of the employment contract," in Labor Law. The study specifically collects data from analysis of literatures and sample population. The primary data will be collected from number of private and public organizations, legal practitioners and notable private individuals.

Research Limitations

The Researcher may face challenges in collecting the required number of primary data. The researcher may also face challenges analyzing adequate previous studies on this topic due to the shortage of previous studies on the topic.

Review of Previous Studies

This section reviews the previous studies that explore the cases of employment contract termination in labor law. Reviewing of literatures assists the researcher to understand the growing number of cases involving termination of employment contract and its fundamental causes.

Cases involving Termination of Employment Contract

Termination of contract employment relationship is one of the most important issues in the labor law because it closely affects two parties who enter into the contractual engagement. Termination of contractual employment generally points out that legal relationships between employee and employee has come to an end. In the private sector, before there could be a termination of employment contract, there must be a serious misconduct from employee that could be deemed to be "extremely weighty" which must induce an employer to terminate the employment contract of an employee. On the other hand, in the public-law employment relationships, a public servant must be guilt of gross dereliction or misconduct of duty before there could be a dismissal of public servant. In both cases, employment termination constitutes the harshest method of ending the employment relationships. Typically, the contract employment could be terminated in case of illness, or incapacity of employee to continue carrying on the duty. In the United States, each state has its different legal provision in relation to the termination of employment contract. In the United States and other European countries, each country has underlying laws regarding the employment termination. Apart from the national law covering the employment termination, there are also international charters. For example, ILO (International Labor Organization) Convention 158 stipulates the termination of employment relationship which may be implemented by employer's initiatives. (Swaitkowski, 2008).

Collins, (2011) in his own case argues that termination of employment contract may be implemented for an indefinite period "after a notice given by either of the parties (ordinary termination)." (P 586).

"If any of the parties has a 'significant cause' it may terminate the contract at any time, without prior notice (extraordinary termination or summary dismissal) and may claim the other party to compensate for the damage caused. but, if the employer terminates the contact with immediate effect without a significant cause, the employer must compensate the employee for the damage that has thus been caused to him plus a penalty up to six months' remuneration." (Collins, 2011 P. 587)

The Nevada labor law in the United States recognizes that employers could breach the employment contract agreement, however, stipulates that plaintiff (employees) could claim compensatory damage from employers for wrongful dismissal. In Alaska, Alabama, California, Iowa, Massachusetts and Arizona, courts generally limits the employees employment contract damages for breach of the covenant. The remaining states in the United States do not have definitive laws that govern termination of employment contracts. Despite no definitive laws on employment contract termination, most states in the United States recognize that an employer could not terminate employment contract with an employee solely by violating employment statues. In a case between Tameny vs. Atlantic Richfield & Co. (1980), California Supreme Court held that "an employee who refuse to participate in illegal pricing scheme and was terminated has stated a tort cause of action. The public policy behind Federal and State anti-trust laws was enhanced by the employee's refusal to fix prices, thus, justifying the tort claim" (Mandelsohn, 1990 P. 5).

Bayburan (2012) discuses two methods that could be used in terminating employment contract. Rightful or just termination is the first process where an employer terminates employment contract agreement without making compensation payments notification. The right or just termination could be due to health reasons, employment sexual harassment, theft, abuse of employee's trust, disclosure of company confidential information, disclosure of employer's professional secrets by employee or other acts that are inconsistent with employee's trusts and loyalty. On this ground, an employer has to possess a solid proof against employee; hence, a court could nullify such case of termination.

Moreover, an employer could terminate employment contract with employees based on justifiable cause. Termination based on justifiable cause is an immediate termination of employee contract by providing timely notification or payment of notification and severance compensation. The justifiable employment termination may occur on the ground of the necessities of the workplace. The justifiable cause could occur due to lack of employee's performances within the workplace. Moreover, employees may be terminated because of low performance, lack of efficiency, or non-conforming to the required skilled required performing duties effectively. Frequent employee sickness, downsizing at the workplace, application of new methodologies within the workplace, economic crisis experienced in the country, loss of business or sales, elimination of positions and termination of departments may make employers terminate employment contract with employees. (Bayburan, 2012). However, employers should notify employees the ground reasons for implementing termination on justifiable cause before executing the termination.

Under Minnesota Statutes (2012)… [END OF PREVIEW]

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Labor Law Specifically in Cases of Termination of the Employment Contract.  (2013, April 6).  Retrieved October 23, 2019, from

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"Labor Law Specifically in Cases of Termination of the Employment Contract."  6 April 2013.  Web.  23 October 2019. <>.

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"Labor Law Specifically in Cases of Termination of the Employment Contract."  April 6, 2013.  Accessed October 23, 2019.