Legal controls over
employment issues and their
impact
IGCSE Business Studies
Lesson Objectives:
At the end of the lesson, students should be:
Awareness of the Legal controls over employment
issues and their impact on employers and employees:
• able to identify legal controls over employment
contracts; unfair dismissal, discrimination, health and
safety, legal minimum wage.
Do the ‘Test Yourself Questions‘ and the ‘Business Case
Study Question’ at the end of the slide. ‘Answer provided’.
Legal Controls Over Employment Issues
Most countries have laws protecting workers from exploitations by
employers and unfair dismissals. The main ones are:
1. Contract of Employment
2. Protection against unfair dismissal – the worker can take
legal action by going to court.
3. Protection against unfair discrimination: when recruiting
new workforce or how they treat employees on
terms of gender, race, colour, religion, disability, age, etc.
4. Health and safety (H & S) at work laws: to protect workers
from injury or physical discomfort such as too cold or too hot
environment and against causing harm to colleagues. H & S
can increase costs but can also avoid litigation costs and long
absence from work due to injuries.
5. Legal minimum wage: prevents exploitation of workers and
adds to business costs. Fair wages can however motivate
workers into higher productivity.
Contract of Employment
A legally binding written agreement between the employer and the employee. Its
details are:
i. the name of employer and name of employee
ii. Job title and main responsibility of the employee
iii. Date employment begins
iv. Working hours.
v. Rate of pay and any other benefits - bonus, sick pay, pension.
vi. Holiday entitlement
vii. Time notice for terminating the employment - applies
to both the employer or the employee alike.
viii. Grievance and disciplinary procedures.
A contract of employment is useful to both parties. It
helps to handles most misunderstanding that could arise.
Managing people
Impact of Legal controls over employment issues
on employers and employees
1. Employee’s rights are protected. Unfair treatment, and
workplace discriminations are prevented. They enjoy safe
working conditions, and minimum standards for wages and
benefits.
2. Health and Safety standards are put in place for workers.
3. The law protects workers’ entitlements and is a recourse
mechanism in case of disputes or unfair treatments.
4. Employers who comply with the laws, avoid penalties, maintain
positive employee relations and create a healthy working
environment.
Test Yourself Questions
1. State two features of an employment contract.
2. Identify two types of discrimination in the work
place.
3. What is meant by unfair dismissal?
Business Case Study Questions
Answers To Questions
3(a) Identify and explain two legal controls that could affect Peter when
recruiting and employing workers. [8]
Award one mark for each legal control (maximum of two), such as:
• Pay minimum wage
• Employer liability insurance required
• Legal citizenship/work permit/licence required
• Ensure a safe working environment/Health and Safety laws observed
• No discrimination when recruiting workers
• Not employing children
• No unfair dismissal
• Number of hours worked may have a maximum limit
Award a maximum of three additional marks for each explanation of the legal
control – 2 of which must be applied to this context.
Indicative response
It is important to pay at least the minimum wage (1) set by the
government or the owner will be prosecuted. (1) This may mean that
Peter has to pay higher wages than he wants to pay and the wage
costs of the gym might be high. (ap) It might mean that Peter cannot
afford to employ as many trainers as he wants at the gym due to the
high cost. (ap)
Possible application marks:
Fitness instructor; needs to employ 4 personal trainers; 2
receptionists; gym is open 7 days a week; Information from Appendix
1 listing gym equipment; information from Appendix 3; health and
safety regulations must be met; shortage of personal trainers; need to
have qualifications in personal training; most personal trainers are
paid the minimum wage. There may be other examples in context that
have not been included here.
