2.5.2/3- Legislation Flashcards
Def business legislation
Is a set of rules and regulations that a business has to comply to which may be constraint on action or a threat
5 types of legislation
Consumer protection, employee protection, environmental protection, competition policy, health and safety
Goal of consumer protection
To ensure business actually deliveres on what they promise to the consumer
The driving force behind consumer protection
To ensure no business can gain an unfair advantage over its rivals
Two major acts of parliament covering consumer protection
- sale of goods act
- trade descriptions act
Aim of employee protection law
Aims to state and uphold minimum standards of treatment that employees can expect from our employer
5 major issues covered by employee protection law
- minimum wage
- right to contract of employment
- increased right to sick, maternity and paternity leave
- redundancy
- trade union rights
Why do businesses fight against human rights for workers
Increased costs, making it harder for them to compete with international rivals
Implications for firms of minimum wage
- Increased labour costs, increased automation in longer term
- employees may be more motivated by fair wage
Implications for firms of right to a contact of employment
Meets employees security needs but can reduce employers flexibility in how they use their staff
Implications for firms of increased right to sick, maternity and paternity leave
Increased cost of paying for cover for these staff
Staff feel more valued as they feel treated by employers, reducing staff turnover levels
Implications of firms of redundancy
Reducing capacity could mean closing a factory of office that has a negative impact on cash flow in the short term
Implications for firms of trade union rights
Employers forced to deal with trade union if enough staff are members, bringing negative and benefits
Major areas of environmental protection
- materials that firms must use for certain products
- processes firms are allowed to use to make certain products
- need to use recyclable materials
- landfill tax
Effects of environmental protection
Likely to increase costs that business faces de to disposing of waste properly
Long and expensive process and may force some business to change their production process completely
Aims of competition policy
Wider consumer choice in markets, technological innovation promoting gain in dynamic efficiency, effective price competition between suppliers
What are CMA responsible for
- investigating proposed takeovers and mergers
- investigating allegations of anti-competitive practices
- taking legal action against those who collude to maintain high prices within a market
The work of CMA ensure (3)
- companies have to set competitive prices
- companies don’t collide with others in their market to the detriment of consumers
- mergers and takeover that sulk create overly powerful firms are prevented
Def cartel
A group of companies operating in the same market who make agreements to control supply and this prices
Aim of health and safety law
To protect employees and customers in the workplace
3 aspects of health and safety law
- safe physical conditions
- precautions that firm are required to take when planning their work
- the way in which hazardous substances should be treated in the workplace
Positive effects of business on health and safety
- should prevent incidents that create negative publicity
- should help to motivate employees who feel safe
- accidents can delay or halt production - avoided
Negative effects on business of health and safety
- extra paperwork
- need to pay for extra safety equipment
- need to pay to adjust physical work conditions
Def competitive environment
Refers to how fiercely business compete with the products that another business makes
