Legislation & Business (AQA GCSE Business)
Revision Note
An Introduction to Legislation
Legislation refers to laws and regulations passed by governments that require businesses and individuals to conduct their behaviour in a particular manner
Following existing laws is usually quite straightforward for businesses
When laws change, businesses may need to adapt the way they operate, which can increase costs
There are three areas of legislation that have significant impacts on businesses
Employment law
Health and safety law
Consumer law
Employment Law
Employment law aims to prevent the exploitation of workers and provide a series of rights to those employed
Legislation covers areas including
Pay and working conditions, including the right to paid holiday, a limit to working hours and a minimum wage
The right to take maternity, paternity or adoption leave and return to the same job thereafter
The right to belong to a trade union and take industrial action
Contracts and termination of employment
Equality of employment rights for marginalised groups (e.g. those with disabilities) to avoid discrimination
The Equality Act, 2010 replaced a series of laws that protected employees against discrimination
Employees cannot be treated differently or denied opportunities on the basis of:
Age
Race, religion or beliefs
Disability, pregnancy or maternity
Gender, including gender reassignment
Sexual orientation
Marriage or civil partnership
The National Minimum Wage Act, 1998 implemented hourly wage floors for workers over the age of 16 in the UK
From 2016, workers over the age of 25 became entitled to a higher hourly rate of pay, called the National Living Wage
The minimum hourly rate a business can pay its workers is updated each year,
In 2024, rates stood at £6.40 for 16-17 year-olds (including apprentices), £8.60 for 18-20 year-olds and £11.44 for workers aged 21 and over
Examiner Tip
In the exam, you could be asked to explain why employees leave their jobs. Discrimination, lack of health and safety, or unfair treatment at work are not valid reasons for leaving a job, as employees have rights regarding these.
Health & Safety Law
Health and safety legislation requires businesses to operate in a way that protects the physical and mental wellbeing of its employees and contractors and customers
Legislation covers areas including
The provision of adequate breaks and rest periods
Temperature and noise levels
The provision of safety equipment
Hygienic, safe and sanitary conditions
Preventing stress
The Health & Safety at Work Act, 1974 requires businesses to safeguard the health, safety and welfare of employees
Aspects covered by the Act include
The maintenance of suitable workplace temperatures
The provision of safety equipment, including protective clothing and guards on dangerous equipment
The right to adequate breaks during and between working periods
The management of toxic substances, including chemicals and emissions
Having a written health and safety policy that is understood by staff
The safe use of computer equipment
The Act requires employees themselves to safeguard their own safety and that of others
The Health and Safety Executive (HSE) investigates breaches of the Act and carries out inspections, with the ability to fine businesses that do not follow the law
Consumer Law
Consumer protection laws aim to ensure that consumers are treated fairly by the companies with which they interact
A range of laws protect consumers from:
Inappropriate use of personal data
Aggressive sales tactics
The incorrect labelling of goods, including ingredients and weights
Unfair credit arrangements, including high rates of interest
The right to withdraw from a contract
Unsafe ingredients or components
Illness or injury caused by a product
The Consumer Rights Act, 2015 is a key law that provides a range of protections related to the sale of products, including:
Returns of goods to suppliers
Obtaining refunds or replacements
Acceptable quality
The delivery of products
Unfair terms in contracts, such as hidden fees
The Impact of Legislation on Business
Meeting employment laws
Adhering to employment law is likely to have a range of benefits
Businesses can avoid attracting unwanted media attention
They are less likely to be subject to legal action
New employees are attracted to work for a business that fulfils its legal obligations
Diagram: The Impact of Employee Protection Legislation on Business
The impacts of employee legislation on business include the need to change working practices, higher labour costs, compliance costs and potential penalties
Meeting health and safety laws
Meeting health and safety requirements may require new procedures and equipment, which are likely to incur financial and time costs, such as:
Staff training and supervision will be ongoing, requiring regular updates
Changes to working hours and rest facilities will need to be provided
Safety manuals, signage and safety documentation must be in place and kept up-to-date
Purchase and maintenance of safety equipment
Drawing up and implementing a [popover id="bEGngku~bJTmGJq4" label="code of practice"]
Serious health and safety breaches can lead to fines or investigation by the Health and Safety Executive and in some cases, they can lead to prosecution
The reputation of a business can be significantly affected if workers come to harm as a result of negligence
Fines can be large, e.g. in 2023 Tesco was fined £7.56 million for a series of food safety breaches at stores in Birmingham
Meeting consumer laws
Meeting the requirements of consumer laws can increase business costs, which may reduce profitability
Businesses must ensure labelling is correct and mechanisms are in place to ensure consumers receive the correct volume of product purchased
Training of sales staff is required to ensure they behave fairly towards customers
Databases containing customer data must be kept secure and up-to-date, and data must only used for a narrow range of specific purposes
Returned products need to be managed
Faulty goods will need to be replaced or refunded at no cost to the consumer
Consumer laws aim to provide a level playing field for businesses
No business can gain an unfair advantage over rivals by taking shortcuts or by making false claims about its products
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