2.5.2-Legislation

Question 1

What is customer protection legislation?

Answer 1

Provides a wide variety of protection and basic legal rights to consumers when they transact with businesses

Question 2

How must a business ensure consumer protection legislation?

Answer 2

Products fit with their descriptions and accurate and clear information is provided
Products are of satisfactory quality
Products are fit for specified purpose
They must not use unfair commercial practices eg. Misleading advertising
Customers have a right to returns and refunds if products dont comply

Question 3

How can consumer protection legislation affect a business?

Answer 3

-Increase costs eg. More expensive raw materials to produce satisfactory quality
Refunds may have to be given to customers if faulty products are sold
-Legal action- If businesses fail to comply it could result in legal action and reputational damage
-Increased customer loyalty- customers may be more willing to to buy goods as they have a basic level of protection which increases trust

Question 4

What is employee protection legislation?

Answer 4

Helps ensure workers have a minimum level of protection in the workplace and is specifically designed to protect employee rights

Question 5

How must a business ensure employee protection legislation?

Answer 5

Equal pay- prevents less favourable treatment of men and women
Minimum wage-Every worker is entitled to national minimum wage
Discrimination-Against the law to discriminate against employees based on age, gender, pregnancy, race, religion, disability
Redundancy pay-Employees are usually entitled to redundancy pay if they have been employed with the same employer for 2 years or more

Question 6

How can employee protection legislation affect a business?

Answer 6

-Increase costs- have to meet minimum wage and pay everyone fairly which can increase labour costs
-Legal action
-More rigorous recruitment and selection process to avoid discrimination (higher costs and disrupts production as it is time consuming)
-Increased staff retention- employees are protected and safeguarded increasing trust and fairness
-Improved reputation-Having a good track record for following the legislation can improve reputation as an employer making it easier to attract better quality candidates

Question 7

What is environmental protection legislation?

Answer 7

Designed to protect the environment from the potential negative impact of businesses. Covers areas such as:
-Controlling pollution
-Waste management
-Wildlife conservation
-Climate change (reducing carbon emissions)

Question 8

How can environmental protection legislation affect a business?

Answer 8

-Increase costs or decrease costs depending on action taken to comply with the law
-Legal action/reputational damage
-Improved reputation-If businesses are seen to adhere to the legislation or even go beyond minimum requirements the business may be able to differentiate themselves from others for being more environmentally responsible

Question 9

What is competition policy?

Answer 9

Promoting competition, making markets work better and enhancing competitiveness of businesses.
Also exists to prevent the exploitation of customers

Question 10

How must a business ensure competition policy?

Answer 10

Businesses CANT use:
Price fixing-Businesses can’t agree prices with competitors to avoid the need to compete with others on price and result in higher prices for the customers
Sharing/dividing markets-Businesses can’t agree to not go after each others customers or decide which market segments each should target as this can lead to higher prices for customers and less choice
Abuse of market position-Some businesses can try and abuse their dominant position eg. Forcing suppliers to pay a certain price

Question 11

How can competition policy affect a business?

Answer 11

-A more balanced and competitive environment. Reduced barriers of entry allowing smaller businesses to enter the market and be successful
-Increase innovation-greater pressure on businesses to innovate in order to compete as opposed to practices deemed to be unfair
-Restriction-Some businesses may find their actions restricted or in some cases prevented all together

Question 12

What is health and safety legislation?

Answer 12

Preventing people from being harmed at work or becoming ill by taking the right precautions and providing a satisfactory working environment. It protects
-employees
-visitors to the premises
-members of the public
-anyone affected by products or services the business designs