3. Legislation & Business

What is legislation?

Law and regulations passed by governments that require businesses and individuals to conduct their behaviour in a particular manner

How do changes in laws impact businesses?

• Compliance is usually straightforward: Businesses generally find it easy to follow existing laws.

• Legal changes require adaptation: When laws change, businesses may need to adjust operations.

• Increased costs: Adapting to new regulations can lead to higher expenses.

• Operational challenges: Businesses may need to train staff, update policies, or invest in new equipment to remain compliant.

What are the 3 areas of legislation that have significant impact on businesses?

• Consumer protection

• Employee protection

• Health and safety legislation (could be under employee protection aswell)

What does consumer protection legislation aim to ensure?

That consumers are treated fairly by the companies which they interact with

What areas does consumer protection legislation cover?

• The safety of products

• The standard and quality of products

• The rights of customers if they are unhappy with their purchase

• The product information that must be given to customers

What does meeting the requirements of the consumer protection legislation result in?

Increase business expenditure, which may reduce profitability

What does consumer protection legislation aim to provide?

A level playing field for businesses ensuring that no business can gain an unfair advantage over rivals by taking shortcuts or by making false claims about its products

What does employee protection legislation aim to prevent?

The exploitation of workers

What areas does employee protection legislation cover?

• 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 (an organised association of workers in a profession, formed to protect and further their rights and interests) and take industrial action (when trade union members, in dispute with manaement, protest or take action e.g. strikes)

• Contracts and termination of employment

What benefits does meeting employee legislation have?

• Businesses can avoid attracting unwanted media attention

• They’re less likely to be subject to legal action

• New employees are likely to be attracted to work for a business that fulfills its legal obligations

What are the impacts of employee legislation on a business?

• Changing working practices - recruitment and selection procedures require regular review to avoid unlawful of discriminative practice, working conditions and workstations may require improvement to be compliant with the law, trade unions may need to be accomodated in discussions

• Potential penalties and rewards - fines may be issued and business reputation damaged if employment laws are broken OR businesses that operate legally are likely to retain motivated and productive staff

• Compliance costs - checks on new employees to determine their right to work must be carried out, frequent training and specialist HR advice may be employed, legal advice or representation may be needed

• Higher labour costs - businesses must ensure that workers receive the national minimum wage, safety equipment and provision of rest breaks increase costs, checks required on new employees may need trained HR staff to conduct

What does health and safety legislation require businesses to do?

Operate in a way that protects the physical and mental wellbeing of its employees and contractors as well as its customers

What are does health and safety legislation cover?

• The provision of adequate breaks and rest periods

• Temperature and noise levels

• The provision of safety equipment

• Hygienic, safe and sanitary conditions

• Preventing stress

What financial and time costs may a business incur when implementing the procedures and equipment required to maintain healthy working conditions?

• Staff training and supervision

• Changes to working hours and rest provisions

• Arrangement of manuals, signage and safety documentation

• Purchase and maintenance of safety equipment

• Drawing up and implementing a code of practice (written rules explaining how people working in a specific business should behave)

What can the breaking of health and safety legislation lead to?

Fines or investigation by the Health and Safety Executive and, in some cases, prosecution