2.5 Legislation
Businesses are subject to many laws. You are expected to assess the impact of legislation on business (e.g. cost, training needs, recruitment, and the consequences of failure to follow legislation.
Only a brief description of each law is needed – the effects of the legislation is more important.
We can broadly categorise business laws:
- Employment laws — Treating employees fairly
- Health and safety laws — Ensuring everyone is safe (employees and customers)
- Consumer laws — Treating customers fairly
Employment Laws
Businesses breaking employment face very large fines and compensation payments to those affected. Bad publicity can also harm sales.
Businesses should train staff and produce policy documents to make everyone aware of their responsibilies to treat others fairly.
National Minimum Wage
- The legal minimum hourly rate of pay for employees
- Different bands for apprentices and those aged 22 or younger
National Living Wage
- The legal minimum hourly rate of pay for employees aged 23 and over.
The Equality Act (2010)
Businesses must not discriminate against anyone. This includes because of a person’s:
- Disabilities
- Sexual orientation
- Age
- Gender
- Religion
- Race
All employees must be paid the same amount for doing the same work, or work of equal value, by the same employer.
Other Employment Laws
Other employee entitlements include:
- Paid holidays
- A written contract of employment stating hours to be worked, rates of pay, duties, and any other working conditions
- Entitlement to belong to a trade union
Health and Safety Laws
The Health and Safety at Work Act (1974)
- Employers and all employees take responsibility for heath and safety
- Risk assessments must be carried out to identify possible dangers
Reasonable steps must be taken to reduce risks, including:
- Health and safety training
- Supply of appropriate personal protective equipment
- First aid trained staff
- Keeping records of accidents
Advantages
- Fewer accidents
- Less time lost due to staff injury
- Better staff recruitment and retainment
Disadvantages
- Cost of safety equipment and training
- Paying compensation to anyone injured
- Bad publicity if a business is thought to be unsafe
- Prosecution, fines, or closure of businesses who ignore health and safety law
Consumer Laws
There are lots of laws to protect consumers. You do not need to learn them all, but you should be aware of their effects on business.
- The Consumer Credit Act (1974) — prevents unfair loan agreements
- Labelling of Food Regulations (1970) — requirement to list ingredients on food packaging
- Weights and Measures Act (1986) — ensures the weight stated on packaging is accurate
- Unfair Trading Regulations (2008) — ensures correct information is on packaging
- Consumer Rights Act (2015) — ensures goods and services are fit for purpose, match their description, and are of satisfactory quality. If products do not meet these requirements, the customer can ask for repair, replacement, or refund (within a certain time limit).