2.5.2 Legislation

Question 1

Consumer protection laws

Answer 1

The main goal of consumer protection legislation is to ensure that
businesses actually deliver on what they promise the consumer. Aspects of this include:
• Does the product do what it claims to do?
• Is the product correctly labelled?
• Is the product sold in the correct weight or measure?
• The rights of consumers to refunds or to exchange faulty products.

Question 2

Two major Acts of Parliament covering consumer protection are:

Answer 2

• the Sale of Goods Act

* the Trade Descriptions Act.

Question 3

Employee protection law

Answer 3

Aims to state and uphold minimum standards of treatment that employees can expect from their employer.

Question 4

Major issues covered under employee protection law

Answer 4

fair pay,
• sick leave
• maternity and paternity leave
• employment contracts
• relationships with trade unions
the ability of businesses to get rid of staff
• the responsibilities of businesses to employees who are made redundant.

Question 5

Implication of right to a contract

Answer 5

Meets employees’ security needs but can reduce employers’ flexibility in
how they use their staff

Question 6

Implications of increased right to sick, maternity and paternity leave

Answer 6

Increased cost of paying for cover for these staff; however, staff may
feel more valued as they feel well treated by employers, reducing staff
turnover levels, which saves the costs of recruiting new staff

Question 7

Implications of redundancies

Answer 7

Reducing capacity becomes expensive due to statutory payments to staff
made redundant; this can mean that closing a factory or office has a
negative impact on cash flow in the short term

Question 8

Environmental protection

Answer 8

Major areas include:
• materials that firms must use for certain products
• processes firms are allowed to use to make certain products
• the need to use recyclable materials for certain products
• landfill tax
° the need to carry out environmental risk assessments for different parts
of a business’s activities.

Question 9

Why do governments seek, through legislation, to ensure that there is
competition in all markets

Answer 9

With no competition, prices can be

pushed high, service standards can slip and innovation can dry up.

Question 10

The CMA is responsible for: (competition law)

Answer 10

• 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, such as cartels.

Question 11

Cartel

Answer 11

A cartel is a group of
companies operating in the
same market who make
agreements to control
supply and thus prices.

Question 12

The major piece of legislation - the Health and Safety at Work
Act 1974 - places the burden on employers. Key aspects of this burden are:

Answer 12

• safe physical conditions
• precautions that firms are required to take when planning their work
• the way in which hazardous substances should be treated in the workplace.

Question 13

Positive effects of health and safety legislation on businesses

Answer 13

Should prevent incidents that
create negative publicity, Should help to motivate employees, who feel safe.
Accidents can delay or halt production - these should be avoided

Question 14

Negative effects of health and safety legislation on businesses

Answer 14

Extra paperwork, Need to pay for extra safety equipment,
Need to pay to adjust physical work
conditions