The Impact of Employment Law on Business (OCR GCSE Business): Revision Note

Introduction to employment legislation

• Legislation refers to laws and regulations passed by governments that require businesses to conduct themselves in a particular manner

• In the UK, the government has passed laws in a variety of areas that determine the required behaviour of employers towards their workers:

• Laws are subject to change over time, and can be influenced by trade union and pressure group activity

  • E.g. The Living Wage Foundation, alongside leading trade unions such as Unison, is pursuing a campaign to increase the minimum wage to a level that better reflects the real cost of living in the UK

Discrimination legislation

• Discrimination at work occurs when the employer treats employees with protected characteristics less favourably than those without these characteristics

  • Protected characteristics include gender, ethnicity or religion, sexual orientation, marital status or disability

  • In many countries, discrimination based on these characteristics is illegal

• The Equality Act, 2010 sets out the law in relation to discrimination:

Main points of the Equality Act 2010

• Employees who are victims of discrimination in the workplace can take legal action against the employer at an employment tribunal

  • Trade unions often support employees with legal claims against employers and provide legal advice and support 

  • An employment tribunal acts as a court that can impose sanctions on a business, such as fines, if it is found to have discriminated against an employee

• 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 or applicants for vacancies

Contracts and employment rights

Contracts of employment

• An employment contract is a legal agreement between the employer and employee, which sets out the terms and conditions of employment

  • It is often a legal requirement for employers to provide a new employee with a contract of employment 

• The contract of employment will usually include:

  • The name of employee and employer 

  • Employment start date

  • Working hours

  • Remuneration

  • Holiday entitlement

  • Duties and responsibilities of the role

  • Place of work

  • Notice period

• The main types of contract include full-time, part-time, job share and zero hours contracts

  • Often, a business will have a mixture of employees with a range of different employment contracts

• A contract of employment reduces misunderstandings around issues such as working hours, pay, and holidays

  • Both employers and employees know what is expected of them

• The contract provides some security of employment to the employee

  • E.g. If an employer breaches any terms of the contract, such as paying the worker less than the agreed amount, then the worker could take legal action against the employer

• If the employee does not meet the conditions of the contract, then legal dismissal is allowed

  • E.g. this could occur if the worker refuses to work the agreed amount of set hours in the contract of employment

  • Employees are entitled to receive a period of notice should a business choose to end their contract of employment

    • During the period of notice, the employee usually continues to work and receives pay

Employment rights

• A range of laws ensure a range of further employment rights for UK workers:

Examples of UK employment rights