2.5.2 Legislation Flashcards
What is legislation?
- Refers to the laws and regulations passed by governments that require businesses and individuals to to conduct their behaviour in a particular manner
What are the 5 areas of legislation that have significant impacts on a business?
- Consumer protection
- Employee protection
- Environmental protection
- Competition policy
- Health and Safety
What effects do the consumer protection laws have on a business?
Consumer protection legislation aims to ensure that consumers are treated fairly by the companies with which they interact
Legislation covers areas including:
* 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
Meeting the requirements of each of the above laws results in increased business expenditure, which may reduce profitability
What are the effects of the employee protection laws on a business?
Employee protection legislation aims to prevent the exploitation of workers
Legislation 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
Changing working practices:
Recruitment and selection procedures require regular review to avoid unlawful or discriminitive practice
Working conditions & workstations may require improvements to be complaint w the law
Potential penaltys:
Fines may be issued & business reputation if employment laws are broken
Compliance costs
- Checks on new employees to determine their right to work- must be carried out
- Frequent training & specialalist HR advice may be employed
- Legal advice or representation may be needed
Higher labour costs
- Businesses must ensure that workers recieve the national minimum wage
- Safety equipment & provision of rest breaks increase costs
- Checks required on new employees may need trained HR staff to conduct
What effects do environmental laws have on businesses?
Environmental legislation aims to hold businesses responsible for their environmental impact
Legislation covers areas including:
* Pollution
* Destruction of wildlife
* Traffic congestion
* Air quality
* Resource depletion
Businesses that fail to adhere to these laws may be fined or forced to cease commercial activity until they resolve problems they have caused
What effects do competition policy laws have on a business?
Competition legislation aims to protect the interests of both consumers and businesses by restricting anti-competitive practices
Legislation covers areas including:
- Abuse of market power so as to limit monopoly power
- Anti-competitive acquisition activity
- Cartel activity and collusion
Where the Competition & Markets Authority judges that a business has acted or may potentially act in an anti-competitive manner it may take steps such as preventing a merger or instructing a business to dispose of subsidiaries in order to correct the market
What effects do the health & safety legislation have on a business?
Health and safety legislation requires businesses to operate in a way that protects the physical and mental wellbeing of its employees & contractors as well as its customers
Legislation covers areas including:
* The provision of adequate breaks & rest periods
* Temperature & noise levels
* The provision of safety equipment
* Hygienic, safe & sanitary conditions
Preventing stress
Implementation of procedures and equipment required to maintain healthy & safe business premises & working conditions are likely to incur financial and time costs
- 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 code of practice
