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).