The purpose of legislation
Legislation means the laws a business must follow. Its purpose is to protect people who would otherwise be in a weak position — customers, who cannot easily check what they are buying, and employees, who need the job more than the employer needs any one worker.
The specification covers two areas, and asks for principles rather than the names and dates of particular Acts.
Common mistake
You are asked for the principles of these laws, not the names of Acts or the current minimum wage rate. An answer explaining what a business must do scores; a half-remembered Act name does not.
- Legislation
- the laws a business must follow, whose purpose is to protect those who would otherwise be in a weak position — customers and employees
The impact of legislation on businesses
Cost. Complying with legislation costs money, and this is the impact the specification names first:
• Higher wage bills where the minimum wage rises. • Safety equipment, protective clothing and guards on machinery. • Training staff in health and safety, and in their obligations to customers. • Time spent on record-keeping, risk assessments and checks. • Refunds, replacements and repairs for faulty goods. • Sometimes redesigning a product or process to meet a new requirement.
For a small business these costs are proportionately heavier, because the same paperwork and training are required whether there are five employees or five hundred.
Consequences of meeting and not meeting these obligations. This is the balanced part of the topic, and it is where the marks are.
Meeting them brings more than avoided punishment. A business known for treating customers fairly earns repeat custom and recommendations. One known for treating staff well finds recruitment easier, keeps employees longer, and loses less time to accidents — all of which reduce cost. Complying is a cost, but it buys reputation and stability.
Not meeting them can be far more expensive than compliance would have been:
• Fines, and in serious cases prosecution of the owners. • Compensation paid to customers or to injured employees. • Damaged reputation, which loses customers and is slow to rebuild. • Difficulty recruiting, and higher staff turnover. • Being forced to stop trading until the problem is fixed.
Worked example
A café owner says health and safety training is too expensive for a business of her size. Evaluate this view.
- Acknowledge the cost argument honestly: training costs money and takes staff off the floor, and that hits a small business proportionately harder.
- Give the counter-argument from consequences: an accident could mean compensation, a fine, and being closed while it is investigated — all far more expensive.
- Add the reputational point: a food business depends on customers trusting it, and a publicised safety failure is very damaging.
- Add the benefit rather than just the avoided harm: trained staff work more safely and confidently, so fewer accidents and less lost time.
- Reach a judgement.
Answer: The cost is real and falls proportionately harder on a small business. But the cost of not training is potentially far higher — fines, compensation, closure and lasting damage to a reputation a café depends on. Training is better seen as an investment that reduces those risks, so her view is short-sighted.
Before you practise
- Legislation protects those in a weaker position — customers and employees.
- Consumer law covers quality (satisfactory, fit for purpose, as described) and consumer rights (repair, replacement, refund).
- Employment law covers recruitment, pay, discrimination and health and safety.
- The principles are what is examined, not the names of Acts.
- Complying costs money: wages, equipment, training, record-keeping and refunds.
- Compliance also brings benefits — reputation, easier recruitment, lower staff turnover and fewer accidents.
- Not complying risks fines, compensation, lost reputation and being forced to stop trading.
- Compliance costs fall proportionately harder on small businesses.