Government influence on businesses
Employment legislations
Introduction:

These are legislations passed by the government to protect peoples’ rights at work.

Without such protection some businesses would exploit their workers

Legal constraints usually cover the following areas
o Recruitment, employment contracts and termination of employment

Laws imposed to maintain

A written contract of employment is there assure the pay (minimum
wage), working conditions and disciplinary procedures

The minimum age of employment

The length of the maximum working week

No discrimination (race, color or religion) at the time of recruitment

Proper ways of termination of employment and there is no unfair
dismissal due to
o Pregnancy
o Refusal to work on a holiday
o Refusal to work overtime
o Incorrect dismissal procedure
o Being member of a trade union
o Health and safety

These aim to protect employees from discomfort and physical injury at work.

This can include

Equip factories and offices with safety equipment

Provide adequate washing and toilet facilities

Provide protection from dangerous machinery and materials

Give adequate breaks and maintain certain workplace temperature
o
Minimum wage to be offered to the employees and trade union rights and
responsibilities.
Conclusion:

There are both positive and negative effects of government legislation on employment practices on
the businesses.

Such legal constraints add to business costs
o Supervisory costs on the firm’s recruitment, selection and promotion procedures
o Higher wage costs, if the payment formerly done was less than the minimum wage
o Higher costs from giving paid holidays, pension contributions and paid leave for sickness,
maternity and paternity leave
o Employment of staff to avoid overlong hours for existing workers
o Protective clothing and equipment to meet health and safety laws

However the long run benefits that the business will achieve by following the law or going beyond
that is that
o Workers feel more secure and more highly valued if they are offered a fair employment
contract and thus will be more satisfied and motivated, which will help the business to
earn its goals
o A safe working environment will reduce the risks of accidents and absent from work due
to ill health and injury.
o Avoiding expensive court cases and heavy fine by following the minimum standard
o Can attract best candidates as business will have a good image
o The culture of the business will be looked upon as one that treats workers as partners in
the business, equal in status and importance to managers and shareholders, which once
again will help retain and attract best workers and quality of the business will enhance.