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  1. business-and-its-environment

    enterprise
    6 主题
  2. business-structure
    6 主题
  3. size-of-business
    3 主题
  4. business-objectives
    3 主题
  5. stakeholders-in-a-business
    2 主题
  6. external-influences-on-business
    12 主题
  7. business-strategy
    10 主题
  8. human-resource-management
    human-resource-management-hrm
    8 主题
  9. motivation
    4 主题
  10. management
    2 主题
  11. organisational-structure
    5 主题
  12. business-communication
    5 主题
  13. leadership
    2 主题
  14. human-resource-strategy
    3 主题
  15. marketing
    the-nature-of-marketing
    7 主题
  16. market-research
    3 主题
  17. the-marketing-mix
    6 主题
  18. marketing-analysis
    5 主题
  19. marketing-strategy
    3 主题
  20. operations-management
    the-nature-of-operations
    3 主题
  21. inventory-management
    2 主题
  22. capacity-utilisation-and-outsourcing
    1 主题
  23. location-and-scale
    2 主题
  24. quality-management
    1 主题
  25. operations-strategy
    4 主题
  26. finance-and-accounting
    business-finance
    2 主题
  27. sources-of-finance
    3 主题
  28. forecasting-and-managing-cash-flows
    1 主题
  29. costs
    4 主题
  30. budgets
    1 主题
  31. financial-statements
    4 主题
  32. analysing-published-accounts
    6 主题
  33. investment-appraisal
    2 主题
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  • Legal factors are laws and regulations that businesses must follow for a range of reasons, including:

    • To protect consumers from harmful substances

    • To protect consumers from misinformation

    • To ensure that businesses operate ethically

    • To ensure that business competition is healthy for society and does not become harmful or destructive

  • Governments use laws to guide how businesses behave

    • This helps protect workers, consumers, and the wider economy

  • The main areas of legal influence are shown on the diagram below

Diagram showing areas of legal influence: market competition, employment, health and safety, consumer protection, marketing behaviour.
Businesses are influenced by laws related to employment, health and safety, marketing behaviour, consumer protection and market competition.

Employment law

  • Employee protection legislation prevents exploitation of workers

  • It covers areas including

    • Pay and working conditions

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

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

    • Contracts and termination of employment

    • Health and safety of employees and contractors

Area of law

Typical coverage

Impact on business

Pay and working conditions

  • Minimum-wage levels

  • Limits on working hours, overtime and rest breaks

  • Safe working environment standards

  • Paid-leave entitlements (holidays, sick leave, parental leave)

  • Employers must keep within legal limits or face fines and court action

  • Government inspections/audits check compliance

  • Firms may need to adjust shift patterns, rewrite contracts or upgrade staff facilities

Equality of employment rights

  • Fair treatment regardless of gender, race, disability, religion, age or sexual orientation

  • Reasonable adjustments for disabled workers

  • Equal pay for equal work

  • Recruitment, promotion and training must be merit-based

  • Job adverts and interviews must be fair and inclusive

  • Discrimination can lead to lawsuits, fines and reputational damage

Right to belong to a trade union and take industrial action

  • Employees free to join a union to represent their interests

  • Collective-bargaining rights (negotiating pay and conditions)

  • Rules on lawful industrial action (e.g., strikes)

  • Employers cannot punish or dismiss staff for union membership

  • Where required, firms must recognise and negotiate with union representatives

  • During strikes, legal procedures (ballots, notice periods) must be followed

Contracts and termination of employment

  • Right to a written employment contract

  • Protection against unfair dismissal

  • Entitlement to notice periods, redundancy pay and the right to appeal a dismissal

  • Employers must issue contracts and follow fair procedures when ending employment

  • Dismissals must be justified (e.g. misconduct, redundancy)

  • Ignoring fair procedures can lead to compensation claims and bad publicity

Health and safety law

  • Health and safety law is intended to protect the physical and mental wellbeing of employees and contractors

  • Laws in different countries typically cover

    • Provision of adequate rest periods

    • Acceptable workplace temperature and noise levels

    • Provision of safety equipment

    • Hygienic, safe and sanitary conditions

    • Manageable workloads

    • Safety procedures and equipment, e.g., fire exits and first aid kits

  • To comply with health and safety laws, businesses need to

    • Train and supervise staff properly on how to work safely

    • Adjust working hours and ensure proper rest is taken

    • Arrange manuals, signage, and legally required safety documentation

    • Purchase and maintain personal protective equipment and safety tools

    • Create and follow a health and safety policy or code of practice

  • Serious breaches of health and safety laws can lead to investigations, fines or prosecution.

    • Poor health and safety practices can also cause accidents, reduce staff morale and damage a business’s reputation

Case Study

IronForge Engineering Ltd

IronForge operates a busy metal fabrication plant. Workers often complain about

  • High indoor temperatures

  • Loud machinery with no hearing protection

  • Lack of proper safety gear when cutting and welding

  • Long shifts without proper breaks

Bold text reads "Ironforge Engineering Ltd." with a decorative horizontal line between "Ironforge" and "Engineering" on a beige background.

Scenario

After a serious accident where a worker was injured by a falling object, the business was reported to the local health and safety authority

The company was ordered to

  • Install proper ventilation and provide ear protection

  • Reduce shift lengths and allow more frequent rest breaks

  • Provide hard hats, gloves, and protective clothing

  • Develop a written health and safety policy

  • Train all workers in equipment safety and emergency procedures

Impact

While the improvements increased costs at first, the business

  • Avoided prosecution

  • Saw fewer accidents and reduced staff turnover

  • Gained a better reputation with clients and employees

Marketing behaviour

  • Laws regulate marketing behaviour and protect consumers from unfair, misleading or harmful practices

  • They ensure that businesses advertise products truthfully, responsibly and ethically

  • Marketing strategies must comply with legal standards in areas such as

    • Advertising content

    • Data protection

    • Pricing and promotions

    • Comparisons with competitors

  • Failure to follow these laws can lead to fines, legal action or reputational damage

Areas of marketing law

Type of law

Explanation

False or misleading advertising

  • Businesses must not make claims that are untrue, exaggerated, or deceptive

  • Misleading marketing can damage trust and lead to legal penalties.

    • E.g. A company claiming a health drink cures illness without scientific evidence could face legal action

Use of personal data in marketing

  • Laws control how businesses collect, store and use customer data

  • Customers have the right to know how data is used and can opt out of marketing communications

Advertising to children

  • Some countries restrict how businesses market to children to protect them from harm

    • E.g. A toy company may not be allowed to show unsafe play or unrealistic product effects in ads targeting children

Unfair pricing

  • Businesses must not advertise very low prices or special offers that are unavailable or limited without stating so clearly

Comparative and competitive advertising

  • Comparisons with competitors must be fair, truthful, and not designed to mislead or damage a rival’s reputation

Consumer law

  • Consumer protection laws defend the rights of buyers and ensure that businesses act fairly, safely, and honestly

  • These laws create trust in the market by making sure that products sold meet certain standards and that consumers are not misled

  • Laws often cover

    • Product safety

    • Accuracy of information

    • Unfair contracts

    • Refunds or returns

    • Online and distance purchases

  • If businesses fail to follow these laws, they can face legal action, financial penalties or reputational damage

Areas of consumer law

Type of law

Explanation

Product safety

  • Goods and services sold to consumers must be safe

  • They must meet manufacturing standards, use safe materials and quality checked

Right to information

  • Clear, accurate product information, such as ingredients, materials, safety warnings, instructions and pricing, must be provided

    • E.g. A food product must list all allergens and expiry dates clearly on the packaging

Right to refunds, repairs or replacements

  • Consumers may be entitled to refund, repair or replacement of faulty goods

Protection against unfair contract terms

  • Businesses cannot include terms in customer contracts that are unfair, unclear or one-sided

Online and distance selling

  • Consumers have extra protections when buying online or by phone, including a ‘cooling-off period’ where they may cancel the order

Competition law

  • Competition law helps ensure markets are open, fair and competitive

  • Powerful companies are prevented from using their position to dominate the market

  • Competition law can

    • Prevent price fixing and unfair collusion

    • Stop mergers or takeovers that reduce market competition

    • Ban abuse of monopoly power

  • If a company breaks competition law, it may face heavy fines, restrictions or forced break-up of business operations

Laws affecting market competition

Type of law

Explanation

Ban on price fixing and <span class=”popovers” data-content=”Where a group of busine