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Business and Legislation

This comprehensive study presentation guides students through the relationship between business and legislation. It outlines the main purposes of legislation in the business environment, including consumer protection, environmental laws, competition policy and health & safety. It also provides some recent case studies of firms and industries affected by changes in legislation.

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Business and Legislation

  1. 1. BusinessLegislation
  2. 2. Law and the business environment• A set of rules and regulations with which a business has to comply• A constraint on action or a threat• An opportunity! Always consider the business effects and consequences
  3. 3. Main roles of business legislation• Regulate the rights and duties of people carrying out business in order to ensure fairness• Protect people dealing with business from harm caused by defective services• Ensure the treatment of employees is fair and un- discriminatory• Protect investors, creditors and consumers• Regulate dealings between business and its suppliers• Ensure a level playing field for competing business
  4. 4. Key areas to considerEmployment Consumers Environment Competition Health & Safety
  5. 5. Employment Two main areas of focus Individual IndustrialEmployment Relations
  6. 6. Pay - equality The basic rule: Men and women are entitled to equal payfor work of equal value
  7. 7. Pay – equality (2)• “Pay” includes everything in the employment contract - bonuses and pension contributions, as well as basic wages or salary• Workers have the right to ask their employer for information to check equality – using the equal pay questionnaire• If they believe their pay is unequal, they can take the employer to an Employment Tribunal
  8. 8. Pay – National Minimum Wage• Employers required by law to ensure they pay their workers at least the national minimum wage (NMW)• Makes no difference when a worker is paid (monthly, weekly, daily, hourly). The NMW still applies
  9. 9. Pay – NMW Rates (2008/9)Current National Minimum Wage RatesYear from Workers aged Workers aged Workers aged 22+ per hour 18-21 per hour 16-17 per hour (main rate) (development rate)1 October £5.80 £4.83 £3.572009
  10. 10. Discrimination Sex, including pregnancy and maternity Marital / civil partnership status It is illegal for A persons disabilityan employer to Race Age discriminate Sexual orientation against an Religion/belief Trade union membership or non- employee on membership the basis of… Status as a fixed-term or part-time worker
  11. 11. Where discrimination laws apply• Discrimination laws apply in many areas of employing staff - i.e.• Recruitment• Employee contract - terms and conditions• Promotions and transfers• Providing training• Deciding what fringe benefits employees receive• Employee dismissal
  12. 12. What is an employment right?Something to which an employee is entitled which is protected by law
  13. 13. Examples of employment rights in UK• Laws provide a variety of “rights” for employees, including:• Reasonable notice before dismissal• Right to redundancy• Right to a written employment contract• Right to request flexible working• Right to be paid national minimum wage• Right to take time off for parenting
  14. 14. Industrial Relations• Protection from unfair dismissal• Employers must recognise union is >50% of staff are members• Regulation of procedures for industrial action (e.g. ballots)• Role / powers of Employment Tribunals• EU – Works Councils requirements
  15. 15. Consumer legislation Consumers
  16. 16. Business to consumer (“B2C”) Any businessthat sells goods or provides services to consumers
  17. 17. A business must ensure that• Goods fit their description – E.g. organic wine really must be organic – Businesses need to take care with descriptions – avoid inaccurate claims• Must be of satisfactory quality – Test is of a “reasonable person” – Must work and have no major blemishes• Goods are fit for the purpose specified – E.g. a watch should tell the time – Businesses should take care when explaining what a product can be used for
  18. 18. Other ways consumers are protected• Businesses may not use unfair commercial practices – e.g. misleading advertising• Customers have a right of return and full refund if goods /services do not comply with law• Services – Must be done at a reasonable price and by the time stated – Customer can request that unsatisfactory work be repaired or carried out again at no cost• Since Oct 2008, consumers buying from home or at work have the right to a “cooling off period”• Distance selling regulations provide further protection for consumers against online businesses
  19. 19. Main consumer lawsDistance Selling Gives consumers protection when they buyRegulations goods or services by mail order, phone or onlineThe Sale of Requires goods to be as described, fit for theirGoods Act purpose and of satisfactory quality. If they are not, the customer can reject themSupply of Customers are entitled to work thats carried outGoods and with reasonable skill, in a reasonable time, at aServices Act reasonable priceTrade Required any descriptions of goods and servicesDescriptions given to be accurate and not misleadingAct
  20. 20. Environmental legislationEnvironment
  21. 21. Environmental – key areas Emissions into the airStorage, disposal & recovery of business wasteStoring and handling hazardous substances Packaging Discharges of wastewater
  22. 22. CompetitionCompetition
  23. 23. Aims of competition policy• Wider consumer choice in markets for goods and services• Technological innovation which promotes gains in dynamic efficiency• Effective price competition between suppliers• Investigating allegations of anti-competitive behaviour within markets which might have a negative effect on consumers
  24. 24. Why businesses need to be aware• To ensure it does not breach competition law• To protect its position where competition law is breached by a competitor
  25. 25. Anti-competitive agreementsBoth UK and EC competition law prohibit agreements, arrangements and concerted business practices whichappreciably prevent, restrict ordistort competition (or have the intention of so doing)
  26. 26. Examples of prohibited agreements• Agreements which directly or indirectly fix purchase or selling prices, or any other trading condition (e.g. discounts or rebates, etc)• Agreements which limit or control production, markets, technical development or investment (e.g. setting quotas or levels of output)• Agreements which share markets or sources of supply
  27. 27. Examples of price-fixing
  28. 28. Price fixing – what is not allowed• Agree prices with competitors• Share markets or limit production to raise prices• Impose minimum prices on different distributors such as shops• Agree with competitors what purchase price will be offered to suppliers• Cut prices below cost in order to force a smaller or weaker competitor out of the market
  29. 29. Abuse of dominant positionBoth UK and EC competitionlaw prohibit businesses with significant market shares unfairly exploiting their strong market positions
  30. 30. What is a “dominant position”?Market Share Having a dominant of position does not in itself breach 50% competition law. It is the abuse of= assumed to that position that is prohibitedbe dominant
  31. 31. Abuses of dominant position• Imposing unfair trading terms, such as exclusivity;• Excessive, predatory or discriminatory pricing• Refusal to supply or provide access to essential facilities• Tying (i.e. stipulating that a buyer wishing to purchase one product must also purchase other products)
  32. 32. Penalties for getting caught• Up to 10% of annual turnover• Criminal prosecution• Disqualification as directors• Civil action by those affected
  33. 33. Health & SafetyHealth & Safety
  34. 34. What is health & safety about? Health and safety is about preventing people from beingharmed at work or becoming ill, by taking the right precautions and providing a satisfactory working environment.
  35. 35. Health & safety responsibilities• An employer has important responsibilities for health & safety• It is not just about protecting staff – health & safety applies to many people who come into contact with the business
  36. 36. Health and safety applies to…• Employees working at the business premises, from home, or at another site• Visitors to the premises such as customers or subcontractors• People at other premises where the business is working, such as a construction site• Members of the public - even if theyre outside the business premises• Anyone affected by products and services the business designs, produces or supplies
  37. 37. Examples of H&S industry issues• Food processing (hygiene)• Hotels (guest safety, hygiene)• Chemical production (dangerous processes, waste disposal)• Air travel (passenger safety)• Tour operators (holidaymaker safety)
  38. 38. Businesses andLegislation in the News
  39. 39. A ban on tobacco displays
  40. 40. Minimum price for alcohol planned
  41. 41. Coalition brings in carbon price floor
  42. 42. Possible new “hire & fire” rules
  43. 43. Government raises state retirement age
  44. 44. Rise in the national minimum wage
  45. 45. Govt subsidy for carbon capture and storage
  46. 46. Regulator allows Royal Mail to raise price of stamps
  47. 47. Watchdog calls for compulsory food labelling
  48. 48. New EU law on disposing of electronic waste
  49. 49. Environmental regulations to be slashed
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