Impact of Employment Law and Corporate Governance on Business Operations

This report discusses the impact of employment law and corporate governance on business operations. It covers the crucial areas of employment law, including employee relations, rights, maternity, and paternal links. It also talks about the UK governance code and its role in different business organizations.

FdSc in Business Management
BAM4011 INTRODUCTION TO BUSINESS LAW
Impact of employment law on
business and evaluation of the
responsibility of corporate
governance on business
operations.
Semester 2
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Table of Contents
INTRODUCTION..........................................................................................................................3
MAIN BODY................................................................................................................................3
CONCLUSION..............................................................................................................................8
References..................................................................................................................................9
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Impact of employment law on business and evaluation of
the responsibility of corporate governance on business
operations
INTRODUCTION
Business organisation of any place is the where the parties enter in an agreement with
the pretext to have and share profit. The employment law protects the rights of such parties
and this report talks about the impact which such laws have on the business organisation. The
employment law is a strong and powerful legislation. The proper implementation of such
legislation in any given organisation makes the organisation trust worthy by its employee,
creates positive brand value (Edwards, 2021). The employment law has many crucial areas, it
has a wide scope and many key areas like employee relation, rights maternity and paternal
links are there. The corporate also plays an important role in the conducting of an business
organization. The corporate governance is the system toolkit which aims at the success of the
business. The UK governance code is also a important tool of English Law, which helps big
and small companies to have an efficient management system (Neugebauer, 2021). UK has
many companies that has good governance system. This report extensively talks about the
role of corporate governance in different business organisation.
MAIN BODY
The employment law is very crucial in protecting the obligations of both the
employers and the employee. This law pertains towards addressing a harmonious relationship
between the employer and employee. These guidelines help in ensuring and safeguarding the
organisation. It is very important to govern the rights and duties of the employees with legal
consideration. The employment is activated the minute a employee enters in agreement with
the employer. In English law, employment law is a crucial complex tool which mitigates the
working of an employee or employer. This legislation provides clarity and fairness in the
establishment. The employment relationship has many phases like hiring, dismissal,
redundancy, treatment of workers, etc. Whatever phase it is there should be rules and
regulations for protection of aspects. In this modern era, with the ever evolving society the
laws of employment has also extended towards protecting against discrimination. The
employment law is mostly derived from legislation but in UK it is perceived by the European
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Laws and the other various rights are inclusive in the contract right. There are several
legislation which are incorporated by the English Law, which together protects the rights and
duties of the employer.
There is five key essential areas in the employment law. The National Minimum
Wage Act, 1998 was given a royal assent by the monarch 31 July1998 which was not even
provided to the workers before 1998. The minimum wage act provides a safe blanket to the
employee since it gives the basic wage below which the workers cannot be paid. Since basic
wage is the most important tool for the survival of the human being in any concerned state.
Basic wage helps the person to get food, shelter and clothing (Gertner, Rotter and Shafer,
2019). These are the basic necessity of any individual. This legislation gives a provision
under Section 10 of this act where the workers can recall the data if the worker, employee
believes that he is not bring paid according to the amount of work they have done. This
collection of previous data record is called the production notice. The workers and the
employer if paid less or removed without any concern without proper wages can claim
compensation.
In English Law, the Employment Rights Act is one the legislation where the soul goal
of the legislation is to protect the employee-rights. This act was enacted as the amalgamation
of all the existing laws so as to protect the rights of the laborer as well. Employee are
protected in the employment policies or employment contracts of service (Davis, 2021). The
employment act very specifically gives the security to the employee by the formation of the
contractual relationship as per section 1(2) of the Employment Rights Act 1996. this tool also
extends its blanket and provide compensation towards unfair dismissal or wrong dismissal.
The employee has a statutory right of redundancy pay. This act talks about the leaves, sick
leaves and also prohibits employer to compel the employee to work on sunday.
The Employment Relation Act 1999 aims to secure and provide legal framework for
the relationship which is instituted among the employer, employee and unions. This act
provides for a fair and reasonable process in case of mediation while solving any dispute.
This provision gives power to trade union and union member (Poon, 2019). At least 21or
more employee should give recognition to such union. They have power to hold ballot and
become a whistle blower.
The equality act of English law provides a remedy against discrimination. This
provision was brought in the year 2010 which gives a total of nine characteristics which are
age, disability, gender reassignment, marriage & civil partnership, pregnancy, race, religion
and sex (Bhopal and Pitkin, 2020). Now this act defend the employee & employer whether at
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any stage against any form of discrimination regarding their pay scale until and unless this
deduction is justified. Otherwise the employee must be paid equally.
The English Law also governs the maternal and paternal rights with the Maternity and
Parental Leave Regulations Act, 1999. This has a very wide scope and also covers the couple
who are not the birth parents rather adopting the child. There is provision for for both pre
natal and post natal care where the mother is paid her salary and apply for 52 weeks leave.
Even the fathers can apply for such leave for a period extending up to two weeks . There is a
compulsion of two weeks leave to the mother which must be absorbed by the mother. In case
of a women working in a factory or such organisation this leave is extended to four weeks.
The Health and Safety Act,1974 is a caution piece of legislation which covers the
occupational aspect of a work environment. This act several provisions which connote
towards providing a safe & secure environment the individual who is working there like
casual, seasonal worker, temporary or self employed individuals and also people who visit
the office space. This hefty tool states many duties of the employer so there is no
consequences regarding health and safety in the working space. The most important role of
employer is to provide a safe physical workplace and maintain the sanitation, neatness,
avoiding harmful substance, etc. These word workplace has wide scope which extends to
construction site, laboratory, etc. The safety of the employee is prior and so the equipment's
provided by them should be regularly cleaned and maintained (Dabrowska Miciula and Lima,
2020). The Staff should also be given proper vocational training to use such tools and
gadgets. The basic facilities should be provided to the employee as well as outsiders like
water, etc. There should be proper appointment of a person who must cater to the health and
safety of the employees. It is his duty to make regular check ups & take action in case of
breach.
The employee must be treated respectfully in their organisation. The employees are
bound by their contractual agreement but they should be protected in case of any dispute. The
employment law only helps them from such ill treatment (Li and Du, 2022). With the help of
the employment law, the employee rights are governed which ultimately helps the business
organisation to grow. There are many beneficial impact of employment law on business
which are -
(a) The basic necessity must be provided like water, lunch, leave breaks, etc. the employees
have satisfaction with their job. The compliance of employee rights brings a healthy
atmosphere in the workplace. The employee are not afraid and tend to perform better in non
toxic environment and generate more profit.
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(b) In case of any dispute, laws already provide an easy and amicable dispute resolution
provision which brings out harmony in the company since there is no enmity. Both the
employer and employee have mutual understanding and the company can easily retain the
good and hard working employees.
(c) The labour laws provide a over legal framework for the employees and employer, strict
adherence to such gives a recognition and brand value of the company is positive since the
word about the company among the workers is good.
(d) The law also manifest the provision of giving benefits, proper work condition which goes
hand in hand in the success of the company. In case of any adverse situation the employment
laws is there safe heaven. For example, the health and safety act states that there should be
safe working place and safe equipment. And a proper vocational training to be given for
using those equipment. The training helps the employee to gain knowledge and not struggle
with the work and the company can make profit as there will be more experienced workers.
Corporate governance is the method which gives the ways through which the business
organisation are governed in an effective manner and proper wise management which
ultimately leads to the success of the business organisation in the long run and not short term
goals. This a medium through which the shareholders and the directors handle the challenges
which is caused in an organisation. It protects the interest of the members by making sure that
the decision making and management of company is appropriate. Corporate governance is a
systematic process which guides, directs, manages and controls the companies or business
affairs (Yeoh, 2019). There are various measures through which good corporate governance
can be done. These include wise organizational strategy, effective risk assessment, discipline
& commitment, fairness to employees, transparent sharing, corporate social responsibility,
regular self evaluation, etc.
In English Law, there is a separate tool UK Corporate Governance Code. This code is
not a law hence compliance is not strictly required. Though many big companies in UK are
following this code even the small companies are also following the steps of the big
companies. This code talks primarily about the duties and leadership skills of the board, aim
of the company, discusses the role and responsibility of the board, talks about the
membership & succession, talks about remuneration & audit risk assessment. The corporate
governance code has wide and complex system (Goergen and Tonks, 2019). This extends to
leadership where the should be clear and sound division of the roles and responsibilities. All
the members of the board should have effectiveness, they should have sound skills set and be
reasonable. The accountability is very important in good corporate governance. The board
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should have risk management assessment & have proper auditing. The remuneration also
plays important role, it should not be less but should be unlimited. Such remuneration should
always be such that the director or employee is motivated enough to stick to his job. But the
company should not give unlimited remuneration to any individual. The relation of
shareholders are very important hence there should always be a safe , sound and fluent
system of communication between them.
The corporate governance helps the business operation to have a long term success of
that organisation. Corporate governance in any organisation helps in the compliance of the
rules & regulation like a separate chief executing officer is appointed & such board members
should have diverse people with different skills so that they can bring more ideas. Such board
should also be evaluated on regular basis (Adnan, Hay and van Staden, 2018). And every
such evaluation should be open and transparent for the smooth functioning of the business
organisation. For example, the UK drink brand company diageo has varied board diversity
policy. They have great corporate governance and follow the code of Business conduct. The
good corporate governance can also be achieved by appointing a director who is independent.
In this ever evolving and thriving society, fresh ideas and innovation is very important. If the
director is following the same routine of decision making in business operation, the company
can come to a stand still. The good corporate governance can also be done by having
autonomous auditors. Since financial invest is what that keeps the company flowing hence
the investors must get the real and true picture of the company financial so that they can
make sound decision regarding the investment. Transparency the key element for the success
of any business. The company must be transparent to all its investors, shareholders,
stakeholders, trustees, beneficiaries, etc. When the company is open about all the data ,
portraying the true & accurate information of the company. There is a better understanding
among all the chains of the business organisation. For example, Aviva is an UK company
which deals in insurance has the policy of true & transparent reporting. The rights of the
stakeholders should be extensively discussed since the investors are the one who floats one's
business organisation (Maali, Rakia and Khaireddine, 2021). They should be completely and
clearly aware of their obligations and rights as a shareholder. Though they are protected by
the employment law but the implementation of such laws like company law, contract law, etc
is very important. The aim of the corporate governance is to provide long term success hence
the company should focus more towards acting in favor of long term success. A business soul
objective should not be short term success rather create opportunities which give them long
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term value. For example, Glencore is a UK company which deals with metals and minerals
which has the soul aim where they supply commodities with long term agenda.
CONCLUSION
This report discuss about the employment law and the impact of such tool upon any
business structure. The laws are meant to give a sense of security to the individual similarly
the employment laws provide the sense of security to the employees. This results in building
trust factor among the employer and employee. When the chain of functioning is smooth it
results in the success of the company and building the brand. The employment laws of UK
has many vital areas it protects the rights of employee, its relations among the employer &
employee. There is also a provision that protects the individual from discrimination, wages
of workers & employee are also moderated. The corporate governance is also very essential
for the functioning of an organisation. This report talks about the various ways and evaluating
the key functions which helps the business arrangement to have a sound corporate
governance.
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References
Edwards, L., 2021. ‘No Jab, No Job’? Employment Law and Mandatory Vaccination
Requirements in the UK. Employment Law and Mandatory Vaccination
Requirements in the UK (November 3, 2021).
Neugebauer, M., 2021. Socio-legal perspectives on agency work: Liminal employment,
innovation and the crisis of UK labour law (Doctoral dissertation, University of
Kent).
Gertner, A.K., Rotter, J.S. and Shafer, P.R., 2019. Association between state minimum wages
and suicide rates in the US. American journal of preventive medicine, 56(5), pp.648-
654.
Davis, H., 2021. Human Rights Law Directions. Oxford University Press.
Poon, T.S.C., 2019. Independent workers: Growth trends, categories, and employee relations
implications in the emerging gig economy. Employee Responsibilities and Rights
Journal, 31(1), pp.63-69.
Bhopal, K. and Pitkin, C., 2020. ‘Same old story, just a different policy’: race and policy
making in higher education in the UK. Race Ethnicity and Education, 23(4), pp.530-
547.
Dabrowska-Miciula, E. and Lima, P.D., 2020. Challenging a “cycle of neglect”: health and
safety among transnational agricultural workers in Canada and the UK. In Health,
safety and well-being of migrant workers: new hazards, new workers (pp. 137-156).
Springer, Cham.
Li, M. and Du, W., 2022. The impact of environmental regulation on the employment of
enterprises: an empirical analysis based on scale and structure effects. Environmental
Science and Pollution Research, 29(15), pp.21705-21716.
Yeoh, P., 2019. Corporate governance codes in the UK: The risk of over-reliance. Business
Law Review, 40(1), pp.19-27.
Goergen, M. and Tonks, I., 2019. Introduction to special issue on sustainable corporate
governance. British Journal of Management, 30(1), pp.3-9.
Adnan, S.M., Hay, D. and van Staden, C.J., 2018. The influence of culture and corporate
governance on corporate social responsibility disclosure: A cross country
analysis. Journal of Cleaner Production, 198, pp.820-832.
Maali, K., Rakia, R. and Khaireddine, M., 2021. How corporate social responsibility
mediates the relationship between corporate governance and sustainability
performance in UK: a multiple mediator analysis. Society and Business Review.
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