1.5.3 Legislation and business

Consumer protection

• consumer right are protected by consumer legislation

• preventing harm caused when supplier knows more than customer (side effects etc)

• preventing harm when customer is misled/lied to (quality)

• preventing exposure to unsafe/unhealthy products

• most important → consumer rights act 2015 & trade description act 1968

Consumer Right Act 2015

• goods must be fit for purpose for which they are sold, so free from defect, safe, durable

• right to get money back if not fit for purpose (Refund, Repair, Replacement)

• person responsible for correcting any problems is the seller (shop) not manufacturer

Trade Descriptions Act 1968

• designed to prevent misleading claims being made about products, particularly when they’re advertised

• it’s an offence for a Trader to use misleading / false statements

• it’s an offence to misleadingly labeled goods & services

• carries criminal penalties & can therefore lead to jail sentence

impacts on new laws

• act tighter make sure to follow new laws

• costs increase

• new paperwork & systems / no shortcuts

• increased staff training

• → customer is protected

• doing the right thing

• trust/reputation

employee protection

• protected from exploitation, harm & discrimination

• → health and safety at work act 1974

• → minimum wage legislation for the UK

• → equality act 2010

Equality Act 2010

• unlawful to discriminate against someone on grounds of: age, disability, gender reassignment, marriage/civil partnership, pregnancy and maternity, race, religion/belief, sex and sexual orientation

Business impact on national minimum wage 1998

• + increased productivity

• + reduced employee turnover

• + boost in morale

• + long term economic growth

• - increased fixed cost → low profit

• - might mean staff made redundant

• - hard for small businesses to cope with minimum wage costs

Employees impact on national minimum wage 1998

• + increased earning increased living standard

• + increased motivation

• + keep people out of poverty

• + benefits wider economy

• + employees less likely to be exploited

• - lead to job insecurity if the business can’t afford min wage

• - business may not pay above minimum

health and safety

• all workers have a right to work in places where risks to their health & safety are properly controlled

• stops you getting hurt/ill

• employer responsible for health and safety, but employees must also help by acting in a responsible way

problems caused by legislation

• increased cost because staff will need to be trained to comply with new law

• increased costs because firms may need to purchase more/different protective clothing & equipment

• too many rules means too much paperwork, which costs time and money

• too many rules can restrict initiative & creativity

• red tape (rules & paperwork) that may not have been designed for some types of business that they still need to adhere to

benefits of legislation

• laws make it clear what businesses can & can’t do allowing managers to focus on other issues

• failure to comply could mean fines, shut down, disqualification,imprisonment

• rules take time & money but not too much to prevent business success

• consumer protection laws too valuable to dismiss if consequences of doing away with it are people’s death/faulty medicines

failure to follow legislation

• taken to court/employment tribunal

• fined closed down

• in most extreme cases may be criminal office jail

Discuss the impact on a business of failing to comply with recruitment legislation (6)

• business is breaking the law (state which law eg health and safety or equality act)

• taken to court/employment tribunal (court for employment issues)

• → fine

• → closure of business (in some cases)

• → most extreme cases = jail

• bad reputation

• → consumers not wanting to buy from them

• → employees not wanting to work for them