Chapter 42- Legislation Flashcards
Quality control
Need to improve their quality control procedures. E.g. quantities weighed out correctly = failure to do so = prosecution. Can’t sell damaged product. Costs will be involved if employee gets in dispute with the business.
Employment contract
This is a legally binding agreement between the employer and the employee, containing details such as start date, job title and duties, pay, holiday etc.
Discrimination
When recruiting new staff employees the candidates are evaluated and usually the one with the most experience is employed/best ability = legal discrimination.
Unfair dismissal
The Employment Relations Act 1999, states that employees who have worked for an employer for a year have the right not to be unfairly dismissed. Can claim unfair dismissal because they:
• Were trying to join a trade union
• Become pregnant
• Refused to work on Sunday
• Were made redundant without a proper procedure
Employees can be dismissed fairly if they are:
• Incapable of doing their job
• Found guilty of misconduct
• Become ineligible to work etc.
Equal pay
Equal Pay Act 1970. This stated that an employee (whatever their gender) doing the same work as a member of staff of the opposite sex is entitled to equal rates of pay and conditions.
Positive effects of employer legislation
- Level the playing field- ensuring companies do not exploit
- Employee motivation and welfare = raising productivity, reduce absenteeism and cut staff turnover.
- Foster friendly culture within organizations = easier to recruit and retain high-quality staff.
- Environmental Protection
Negative effects of employer legislation
• Must check passport etc and get photocopies, ensure they check all people not just employees
they think may not be a citizen of the UK.
• Insurance policies, in charge of well being of employee- redundancies, health and safety etc.
• Tax authorities (HMRC- Her Majesty’s Royal Revenue and Custom)
• Higher labour costs- National minimum wage rules, have to be paid.
• Changing working practices- business employs more people = will have to introduce systems to
deal with compliance and human resource management.
• Ensure job advertisements do not discriminate on the basis of gender or marital status.
• Ensure interviewer is not prejudice.
• Loss of flexibility- some businesses argue it is more difficult to run a business because laws are too
rigid.
Problems occurring from businesses:
• Pollution- water pollution by dumping waste into rivers, streams, lakes etc, air pollution due to
discharging of particulate waste or gases into the air, noise pollution from factories, pubs, night
clubs, air craft etc.
• Destruction of wildlife habitat- such as half of the forests that one covered the plant are now gone
+ species under threat from human activity such as tigers, pandas, plant + insect species.
• Traffic congestion- extra traffic from commercial vehicles + workers traveling to and from work. E.g.
congestion charge introduced in London in 2003.
• Resource depletion- non-renewable resources such as oil, coal, gas + minerals cannot be replaced.
How does environmental legislation affect business?
• Marketing- some business market showing they use recycled materials or enviro friendly materials
such as IKEA which shows a USP to the consumer.
• Finance- can have a positive affect of finance by using energy saving methods = lower costs.
• Operations Management- pollution controls could have impact on how product is made e.g.
materials used, methods used
• Human resources- as laws and legalisations increase business may need to employ expert help to
ensure environmental laws are in place and being met. Could include and environmental audit.
Effective communication needed between employees and employer.
Competition Policy
Need to monitor activities of monopolies and markets dominated by a small number of businesses otherwise they could easily exploit consumers by using anti-competitive practices or restrictive practices.
Do this by:
• Increasing prices- rising price above what it would be in a competitive market.
• Restricting consumer choice- a manufacturer might refuse to to supply to a retailer of that retailer
stocks rival products = reducing consumer choice.
• Raise barriers to entry- spending huge amounts on advertising so that a dominant firm squeezes
others out the market OR charge a lower price for products so that any new business will not be
able to cope with this then once they have disappeared increase price of that product.
• Market sharing- occurs when a collusion occurs, when a market is shared out between the
dominant firms, choice is restricted and prices rise.
Health and Safety
- Work recognized as being dangerous meaning health and safety legislation put in place:
- Ensuring workers have enough space to do their work
- Guaranteeing a hygienic environment with toilets and washing facilities.
- Providing protective equipment.
- Providing protection from violence, bullying or hazardous substances.
How does health and safety legislation affect businesses?
• Costs: The Health and Safety at Work Act 1974 requires businesses to prepare a written statement
of their general policy on health and safety. Costs are built up from having to train staff, give info,
instruction or employ a health and safety officer + smaller businesses may have to add health and
safety to their job role.
• Penalties: If not met then fines are put in place as well as employees safety compromised.
• Benefits: Although higher costs, good health and safety = improved business image = attract high
qualified staff + workers will feel more protected and secure = more motivated and more loyal =
higher productivity + absence through injury reduced + lower staff turnover.
Anti-competitive or restrictive practices
attempts by firms to prevent or restrict competition.
Barriers to entry
obstacles that make it difficult for new firms to enter a market.
Collusion
two (or more) businesses agreeing to a restrictive practice such as price fixing.
