Legislation And Business aqa

An introduction to legislation

• Legislation refers to laws and regulations passed by governments that require businesses and individuals to conduct their behaviour in a particular manner

• Following existing laws is usually quite straightforward for businesses

• When laws change, businesses may need to adapt the way they operate, which can increase costs

• There are three areas of legislation that have significant impacts on businesses

  • Employment law

  • Health and safety law

  • Consumer law

Employment law

• Employment law aims to prevent the exploitation of workers and provide a series of rights to those employed

• Legislation covers areas including

  • Pay and working conditions, including the right to paid holiday, a limit to working hours and a minimum wage

  • The right to take maternity, paternity or adoption leave and return to the same job thereafter

  • The right to belong to a trade union and take industrial action

  • Contracts and termination of employment

  • Equality of employment rights for marginalised groups (e.g. those with disabilities) to avoid discrimination

• The Equality Act, 2010 replaced a series of laws that protected employees against discrimination

  • Employees cannot be treated differently or denied opportunities on the basis of:

    • Age

    • Race, religion or beliefs

    • Disability, pregnancy or maternity

    • Gender, including gender reassignment

    • Sexual orientation

    • Marriage or civil partnership

• The National Minimum Wage Act, 1998 implemented hourly wage floors for workers over the age of 16 in the UK

  • From 2016, workers over the age of 25 became entitled to a higher hourly rate of pay, called the National Living Wage

    • The minimum hourly rate a business can pay its workers is updated each year,

    • In 2024, rates stood at £6.40 for 16-17 year-olds (including apprentices), £8.60 for 18-20 year-olds and £11.44 for workers aged 21 and over

Health and safety law

• Health and safety legislation requires businesses to operate in a way that protects the physical and mental wellbeing of its employees and contractors and customers

• Legislation covers areas including

  • The provision of adequate breaks and rest periods

  • Temperature and noise levels

  • The provision of safety equipment

  • Hygienic, safe and sanitary conditions

  • Preventing stress

• The Health & Safety at Work Act, 1974 requires businesses to safeguard the health, safety and welfare of employees

  • Aspects covered by the Act include

    • The maintenance of suitable workplace temperatures

    • The provision of safety equipment, including protective clothing and guards on dangerous equipment

    • The right to adequate breaks during and between working periods

    • The management of toxic substances, including chemicals and emissions

    • Having a written health and safety policy that is understood by staff

    • The safe use of computer equipment

  • The Act requires employees themselves to safeguard their own safety and that of others

  • The Health and Safety Executive (HSE) investigates breaches of the Act and carries out inspections, with the ability to fine businesses that do not follow the law

Consumer law

• Consumer protection laws aim to ensure that consumers are treated fairly by the companies with which they interact

• A range of laws protect consumers from:

  • Inappropriate use of personal data

  • Aggressive sales tactics

  • The incorrect labelling of goods, including ingredients and weights

  • Unfair credit arrangements, including high rates of interest

  • The right to withdraw from a contract

  • Unsafe ingredients or components

  • Illness or injury caused by a product

• The Consumer Rights Act, 2015 is a key law that provides a range of protections related to the sale of products, including:

  • Returns of goods to suppliers

  • Obtaining refunds or replacements

  • Acceptable quality

  • The delivery of products

  • Unfair terms in contracts, such as hidden fees

The impact of legislation on business

Meeting employment laws

• Adhering to employment law is likely to have a range of benefits

  • Businesses can avoid attracting unwanted media attention

  • They are less likely to be subject to legal action

  • New employees are attracted to work for a business that fulfils its legal obligations

The impact of employee protection legislation on business

Meeting health and safety laws

• Meeting health and safety requirements may require new procedures and equipment, which are likely to incur financial and time costs, such as:

  • Staff training and supervision will be ongoing, requiring regular updates

  • Changes to working hours and rest facilities will need to be provided

  • Safety manuals, signage and safety documentation must be in place and kept up-to-date

  • Purchase and maintenance of safety equipment

  • Drawing up and implementing a [popover id=”bEGngku~bJTmGJq4″ label=”code of practice”]

• Serious health and safety breaches can lead to fines or investigation by the Health and Safety Executive and in some cases, they can lead to prosecution

  • The reputation of a business can be significantly affected if workers come to harm as a result of negligence

  • Fines can be large, e.g. in 2023 Tesco was fined £7.56 million for a series of food safety breaches at stores in Birmingham

Meeting consumer laws

• Meeting the requirements of consumer laws can increase business costs, which may reduce profitability

  • Businesses must ensure labelling is correct and mechanisms are in place to ensure consumers receive the correct volume of product purchased 

  • Training of sales staff is required to ensure they behave fairly towards customers

  • Databases containing customer data must be kept secure and up-to-date, and data must only used for a narrow range of specific purposes

  • Returned products need to be managed

    • Faulty goods will need to be replaced or refunded at no cost to the consumer

• Consumer laws aim to provide a level playing field for businesses

  • No business can gain an unfair advantage over rivals by taking shortcuts or by making false claims about its products