Legislation & Business
Business: Edexcel GCSE, topic 1.5.3
Employment Law
Employment law deals with the laws that gives standards about how businesses should treat their employees.
National minimum wage/living wage
- This law states the minimum amount that businesses can pay their staff. The amount depends on the age of the worker and the type of work.
- If the minimum wage increases then it can lead to an increase in costs and because of this, lower profits.
- Paying workers a higher wage may improve motivation and productivity.
Different countries
- Different national minimum wages mean that it is more expensive for companies to produce in some countries relative to others.
- The UK has a much higher average minimum wage (about $11 per hour) than Vietnam or China (about $3 per hour) and this means it is much cheaper for firms based in China to produce products.
- This may mean that some UK manufacturing businesses that need a lot of labour are not competitive on price.
The Equality Act (2010)
- This protects all people from discrimination in the workplace. It means businesses cannot discriminate in terms of pay and employment opportunities based on someone’s religion, race, gender, age, sexual orientation or disabilities.
- This creates a working environment where everybody feels welcome. Sometimes this is called an inclusive workforce.
Health and Safety Law
The Health and Safety at Work Act (1974) places a duty (responsibility) on businesses to make sure that the health and safety of their employees is properly managed.
Risk assessments
- Firms need to do risk assessments and take steps to make sure that potential risks at work are minimised.
Health and safety conditions
- Better health and safety conditions do provide a benefit by reducing the number of workplace injuries. This means that workers will spend less time off work recovering from injury and will spend more time at work.
Impact on businesses
- There are certain costs involved with making sure a business meets health and safety standards.
- For example, making sure all staff undergo health and safety training or wear protective clothing like safety visors and ear plugs are all likely to lead to extra costs.
Test yourself on Legislation & Business
Why might a business that manufactures in the UK be less competitive on price than one that manufactures in China?
What is the name of the law that places a duty (responsibility) on businesses to make sure that the health and safety of their employees is properly managed?
What do firms need to complete to ensure dangers in the workplace are minimised?
Which are the correct costs and benefits of health and safety?