The law of agency is a part of commercial law dealing with contractual, quasi contractual, and contractual (fiduciary). An agent works on behalf of another person or organization. The agency relationship involves agents and principals, agents and third parties, and principals and the third parties. The employment and agency contracts ensure that laws of employment in related organizations are followed to the letter. In relation to agency and employment, laws of agency bind contracts between employee and employer as well as employee agencies and employers. This means that either of the parties has the right to terminate contracts and seek assistance from legal authority, for instance, if an employee is wrongfully terminated, he or she has a right to file complaints with the NLRB. This paper will discuss agency and employment relationship, including its ethical implications on working lives of family and unfair employment practices in the US.
The agency relationship commonly exists between employers and employees, although it may also exist between employees and independent contractors. Generally, in employer-employee relationships, all employees who deal with third parties are said to be agents. An example involves salespeople in a supermarket who acts on behalf of the owners of the supermarket such that, any sale of goods by a salesperson is binding on the principal/owner. Employees who deal with third parties are generally deemed to be agents of their employers and as a result, employment laws apply only to the employer-employee relationships.
The statutes governing employer-employee contracts include social security, withholding taxes, workers compensation, unemployment compensation, work place safety, and employment discrimination. In an employer-independent contractor agency relationship, an independent contractor is not regarded as an employee by definition since he/she does not have control over details of physical performance; an example of an independent contractor is a plumber who hires him/herself to repair pipes in people’s homes. In this case, either of the parties can terminate this contract.
An agency relationship can be created in two ways by agreement or by law (Miller & Jentz, 2010). Agency by agreement is created through contracts, with three important contract principles being requirements for consideration, written consent, and contractual capacity. Agency relationship through consideration is by consent or agreement that is necessarily not contractual. In this case, one person cannot act without the consideration of the other person. A formal contract in writing is legally binding either orally or in written form. Many times, it is advisable for agreements to be in writing, for instance, in agency relationships that last for more than a year, agreement to pay commission in a real estate deal, or contracts between companies and sales representatives.
A contract is void if one party lacks capacity; thus, in a case where an employer contracts a minor to negotiate on his/her behalf, the contract becomes null and void. A valid contract in relation to capacity requires the agent and principal to be of sound mind. An agency relationship in regards to capacity is the power of attorney agreement, especially when a person who is not available through illness or old age uses this process to protect assets and businesses alike (Kleinberger, 2008).
Agency relationship created by law may be implied or apparent. Implied agency relates to areas of social needs where a court has the right to declare agency in absence of an existing agreement. In certain cases involving children, the head of the house is expected to support his/her dependants. Consequently, all family debts are directed to the head of the family as the agent for provision of basic needs. Nevertheless, implied agency can be termed as implied responsibility in regards to family and other social issues (Halbert & Ingulli, 2011).
Unfair employment practices refer to actions that violate employees’ rights by either employers or unions. If an employee is unfairly treated and the employer goes against the contract, the employee has the right to file a complaint by national labor regulation board (NLRB). These cases can either lead to a settlement or go as far as to a judicial trial. In cases of employment, the contract between employer and employee protects each party from legal issues. In the event of termination of the contract, each party must respect the terms stated in the contract. Ethics are required from employees and employers in order to ensure fairness and conducive working environment for the employees. A consideration of work ethics has vastly improved relationships in work environments between employers and employees (Cross & Miller, 2011).
In my future role as an employer, understanding the requirements of agency relationships and agreements will be crucial to avoid legal redress. Contractual agreements will be drafted that will ensure employees experience a good working environment by understanding their needs. In regards to independent contractors, having a well-written formal agreement will limit the number of disputes when work is not done to perfection. The agency relationship to employees will help creating a good working environment and structure to enhance productivity. Cases of unfair treatment of employees will be few, as the contract will entail the terms of termination and state the duties of each employee.
In conclusion, the laws of agency and employment are closely related in terms of contractual ability. The use of agents to deliver services is crucial in ensuring that laws and regulations for employees are followed. A well-written guideline ensures both parties understand their duties and are responsible for their work. Moreover, the relationship established by the law of agency in different forms establishes how goals can be achieved through others. In the case of sales representatives contracted by a company to represent an image for the company as a third-party negotiator, benefits realized in new sales benefit both the principal and the sales person.
However, responsibilities established by the law of agency, especially in contracting workers, fall upon the agency. Here, the employers require agents to have complete control in staffing, including providing workers with credentials and competence required by the company. This is one of the most common forms of agency relationship. However, using agencies does not shield employers from different legal issues by employers. Nevertheless, the implications of agent relationship are more situational and relate to different decisions. Agency and employment show a relationship that requires structures to enhance the working environment.
Employee contracts provide terms to be followed, which both employer and employee must read carefully and ensure they understand before signing or accepting to be bound by them. If an employee does not accept the terms, he or she can decline the contract. The agency relationship replicated in this paper has affected the face-to-face dealings; the paper has highlighted the type of laws required by employees and duties of agents in different points of work.
References
Cross, F., & Miller, R. (2011). The Legal Environment of Business: Text and Cases: Ethical, Regulatory, Global, and Corporate Issues. OH, USA: Cengage Learning. Web.
Halbert, T., & Ingulli, E. (2011). Law and Ethics in the Business Environment. OH, USA: Cengage Learning. Web.
Kleinberger, D. S. (2008). Agency, Partnerships, and LLCs: Examples and Explanations. NY, USA: Aspen Publishers Online. Web.
Miller, R., & Jentz, G. (2010). Cengage Advantage Books: Business Law Today: The Essentials. OH, USA: Cengage Learning. Web.