The Impact of Legislation on Employment (CIE IGCSE Business)

• Legislation refers to laws and regulations passed by governments that require businesses to conduct their behaviour in a particular manner
• Many countries have passed laws that determine the required behaviour of employers towards their workers

Diagram: Legal Controls over Business

Employment legislation helps to reduce worker exploitation and unfair dismissal from the workplace

• A national minimum wage (NMW) is a legally imposed wage level that employers must pay their workers
  • It is set above the market rate of pay
  • In some countries, the minimum wage varies by age
  • A minimum wage makes it illegal for an employer to pay an hourly rate below the minimum wage set
    
    

Impact of Legal Minimum wage on Employers and Employees

• Businesses in some countries are free to pay their workers very low wages leading to much lower business costs
• Businesses are often questioned about this decision as it compromises business ethics

• Health and safety legislation requires businesses to operate in a way that protects the physical and mental wellbeing of its employees, contractors and customers
  
  
• Health and safety 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
    
    
• Implementation of procedures and equipment required to maintain healthy working conditions are likely to incur financial and time costs, such as
  • 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 a code of practice
    
    
• Serious health and safety breaches can lead to fines or investigations by the Health and Safety Executive and, in some cases, prison sentences

• Discrimination at work occurs when the employer treats employees with protected characteristics such as gender or race less favourably than one without these characteristics
  • In many countries, discrimination based on these characteristics is illegal

Diagram to show the main Forms of Discrimination

Laws are in place to protect workers from discrimination based on gender, age, race, disability and religion

• Employees who are victims of discrimination in the workplace can take legal action against the employer
  • Trade unions often support employees with legal claims against employers and provide legal advice and support 
    
    
• Businesses can miss out on recruiting the best applicant if recruitment policies are discriminatory
• Reputational damage may result if a business is found to have discriminated against employees

• Dismissal takes place when an employer ends an employee’s contract of employment with the business
  
  
• Dismissal can be fair for a number of reasons
  • The job no longer exists, which means the employee is made redundant
  • An employee cannot do the job properly e.g. they may lack the right skills
  • Long-term illness
  • Gross misconduct, such as theft or violence at work
  • For other “substantial” reasons, such as the employee has been sent to prison
    
    
• Unfair dismissal is when an employee of a business has their employment terminated without a valid reason or against government legislation
  
  • Reasons for unfair dismissal include discrimination or avoidance of paying for redundancies
    
    
• In cases where there is unfair dismissal, the worker may take his/her complaint to a court called an industrial tribunal to decide whether there is a case to answer
  • If the independent tribunal finds that the worker was wrongfully dismissed, then the worker receives compensation and their job is offered back to them