Subject: Business | Level: GCSE | Exam Board: AQA
Legislation forms the rulebook that all businesses must follow, directly impacting their costs, operations, and reputation. This guide breaks down the essential Employment, Health & Safety, and Consumer laws you need to know, focusing heavily on how to evaluate their business impact for top exam marks.
Revision Notes & Key Concepts
Key Terms & Definitions
- Legislation
- Laws passed by acts of parliament that businesses must comply with.
- Compliance
- The act of obeying the law and following regulations.
- National Minimum Wage
- The lowest legal rate of pay for employees, depending on their age.
- Protected Characteristics
- The 9 specific traits protected from discrimination under the Equality Act 2010.
- Health and Safety Executive (HSE)
- The government body responsible for enforcing health and safety legislation.
- Trade Descriptions
- The legal requirement that any claims made about a product in advertising or packaging must be true.
Worked Examples
Worked Example
Question: Explain two impacts on a business of complying with the Equality Act 2010. (6 marks)
Solution: **Impact 1: Increased Training Costs** One impact is that the business will face increased costs (1). This is because the HR department will need to train managers on the 9 protected characteristics, such as race or gender, to ensure recruitment processes are fair (1). Consequently, this will increase the firm's expenses and could lower their overall profit margins (1). **Impact 2: Improved Reputation and Motivation** Another impact is that it can improve the business's reputation and staff motivation (1). By treating all employees fairly and avoiding discrimination, the business will be seen as an ethical employer (1). This can lead to lower staff turnover, reducing the costs associated with hiring new workers, and making it easier to attract top talent (1).
Worked Example
Question: Assess the impact of the National Minimum Wage Act on a small independent coffee shop. (9 marks)
Solution: **Point (Cost)**: A major impact on the coffee shop is the increase in operating costs. **Evidence/Explanation**: The National Minimum Wage Act requires employers to pay a legal minimum hourly rate. For a small coffee shop, where staff wages make up a large percentage of total costs, any increase in the minimum wage will significantly increase their total wage bill. This could force the owner to raise the price of their coffee to maintain profit margins, which might reduce customer demand. **Point (Benefit)**: However, complying with the Act can also bring operational benefits. **Evidence/Explanation**: Paying staff a fair, legal wage can increase their motivation. In a customer-facing business like a coffee shop, motivated staff provide better customer service. This can lead to higher customer satisfaction, positive word-of-mouth, and repeat business, which increases revenue. **Conclusion**: Overall, while the National Minimum Wage Act increases short-term costs and squeezes profit margins for the coffee shop, it is ultimately beneficial. The improved staff motivation and better customer service are likely to outweigh the higher wage costs in the long run, leading to a more stable and reputable business.
Practice Questions
Question: State two protected characteristics under the Equality Act 2010. (2 marks)
Answer:
Question: Explain how the Consumer Rights Act 2015 might affect a business that sells washing machines. (4 marks)
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Question: Evaluate the impact of health and safety legislation on a manufacturing business. (12 marks)
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