Calculating Loss of Statutory Rights

Every time you go shopping you will most likely see the advert: “This does not affect your statutory rights”. But what does it really mean? Statutory rights include an individual’s rights and regulations provided by the local and national ruling governments.

These regulations were made specifically to protect all citizens, and are generally enforced by local powers. However, the same rules and regulations might not apply to two different states, as each state provides its own set of laws, aside from any other state.

Usually statutory rights refer to general aspects of the daily life in which citizens enter into contractual agreements between themselves. These contractual agreements might be signed between two individuals, between two companies, two firms, or between one company and one individual (the most common one). Especially when it comes to retailers and sellers, they have the legal obligation to protect the customer from fraud, poor quality or economic loss, whether a previous agreement between the two parts was previously signed or not.

Moreover, a retailer is obliged by law to provide all necessary legal documentation and inform the client before selling an item. In addition, a seller also has the obligation to show the counter price as being the right one, including all additional taxes and VAT. Unless the seller provides this information, it is suitable for paying big fees to the state and even to the customer. Among the most important right both buyers and sellers must know are:

  • The seller’s right to sell. The most important right of a transaction is, of course, the seller’s right to sell. Although it may look like a matter-of-course, this statutory right confers credibility and eligibility to the seller to be put his or her goods for sale. First of all, the seller must own the right of selling the good and being able to transfer its full ownership to the client. This means that a seller under no circumstances may be able to sell a stolen or damaged good to customers. In the case of selling a stolen good, the client will not obtain full ownership of the product even though he or she paid for it. The same law applies to products that the seller doesn’t have the right to sell, as the selling contract will be immediately voided.

  • If you are buying a product based upon a seller’s description, catalogue or description, you are entitled to receive the exact same good with the exact same measures and price. Otherwise, due to

  • Your statutory rights, you can claim full money refund, the replacement of the product or even sue the seller for forgery attempt.

Although these are basic law rights, many people are not fully aware of them and are constantly deceived by sellers who are only looking for big profits. Based on the mandatory rights, if the client is not fully satisfied with the purchased good or transaction, he or she can claim the loss of statutory rights and demand for compensation.

In this case, the loss of statutory rights is calculated based upon the good’s value, whether it had warrantee or not or for how long the good had broken. For example, if you purchase online a TV and it comes with scratches or doesn’t meet your requirement, you can send the good back and receive all your money back immediately. However, if its warrantee period passes and you don’t return the good in its original package you may not be suitable for full refund.

Another important set of statutory rights and regulations applies to employees and employers. The employee has the right to work according to his or her competences and qualifications and may not be dismissed for unfounded reasons or discriminatory politics. However, more than 45% of the total cases filed for unsuitable statutory rights come from discriminated personnel such as women or immigrants.

The recent case of Corbett vs. Superdrug Stores Plc held in 2006 addressed the issue of calculating the loss of statutory rights. In this case, the employee (a woman) was dismissed after 10 years of work based on unfounded reasons. She faced the case in front of the Employment Tribunal and was awarded the sum of approximately $2250 for her loss of statutory rights.

However, the Court failed to offer an explanation regarding the sum and how they reached it, which determined the employer to file for recourse. The employer won the appeal and forced the Tribunal to award a recalculated cost of the loss of statutory rights.

In order for these cases to be avoided, some measures were taken to provide a calculating algorithm that should be applied. Thus, the Tribunal is now obliged to provide one of the following sentences: the reinstatement or re-re-engagement of the person who was unfairly dismissed, or to force the employer pay for compensations.

However, job reinstatement cases are rare because even though the Tribunal gives the reinstatement order, it will be very difficult for it to follow if the employer compelled. This is why most courts decide to offer instead a compensation which is usually divided into two elements:

  • The basic award is the first component and it is generally calculated similar to a redundancy payment, according to the local rules and following a pre-established formula based on the age of the employee, the time he or she spent practicing that job and a one week’s pay. However, the basic award can be the subject of reduction and its total value may not exceed $20,600.

  • The second compound is called the compensatory award and it has the purpose of compensating for the statutory loss. The compensatory award includes the following taxes and expenses:

  • Immediate payment of all net earnings to which the person is entitled from the day the person was dismissed and until finding a new job.

  • The loss of pension rights and additional fringe benefits

  • The loss of statutory rights which is usually a small fee, raging around $500

  • All additional expenses arising from searching a new job or removal expenses

  • If applicable, a financial loss determined by the unfair manner of dismissal. This is usually awarded if the employer made it more difficult to the employee to find a new job by placing negative references or by influencing possible job contractors.

The total amount of the compensatory award may not exceed $116,000 after all reductions. However, these figures are only provided as a rough guide because the exact amounts are established by each and every state, according to its own regulations.

Before signing any job contract it is vital for the employee to know his or her rights and to act according to them, not to be discriminated and to be able to conduct the job under normal circumstances. 


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