Impact of Employment Law and Corporate Governance on Business Operations

This essay discusses the impact of employment law on business operations and evaluates the responsibility of corporate governance. It covers the subject of BAM4011 Introduction to Business Law for FdSc in Business Management.

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
Semester 2 .........................................................................................................1
Impact of employment law on business and evaluation of the responsibility of corporate
governance on business operations(essay)...............................................................................3
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Impact of employment law on business and evaluation of
the responsibility of corporate governance on business
operations(essay)
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Employment law is vast in its applicability over the matters relating to work place.
It covers all faculties associated with work place while providing rights and imposing
duties and obligations with the view to protect employees from an arbitrary and
capricious Act of an employer. The key intention of Employment law is to establish and
regulate relationship between employers and employees it covers all the dynamics and
certainties between employer and employees which may happen at work place like what
an employer expect from employees, what work employer may ask to do and what rights
employer must provide to employees at workplace (Mugalula 2020). Corporate
governance on the other side is an arrangement which aims to install policies and
regulations which provides assistance for maintaining stability in an organization. A good
corporate governance covers all the essentials areas like work culture, business ethics,
risk management, corporate strategy and work environment at work place. The principle
objective of a corporate governance is to ensure accountability and transparency and
promote sense of responsibility towards business work and management (Dockès 2019).
Employment law covers range of protection that are important for the effective
functioning of an organisation. The legal compliances and statutory framework is
important for meeting the essential requirements of organisation. Corporate governance
is the system area of employment law which put legal obligation on the company to meet
the essential requirement to strategies the aims and objectives of the organisation.
Boards and directors are responsible for the governance of the company. Employees
governance is essential aspect of company in which employees are involves in the
process of decision making. It motivates the employees and enhance their participation
within an organisation. It brings efficiency and transparency in the working system and
strengthen the role of employees in the governance of corporate entity. The scope of
corporate governance has increased after industrialisation and modernisation of various
industries. It prioritise the interest of the stakeholders including creditors, suppliers,
customers etc. It is not only maximise the productivity of the organisation but also
enhance the profit earning capacity of the organisation. It brings financial stability and
generate revenue of the organisation. The concept of corporate governance and
employment rights are interlinked with each other as both are crucial factor of the long
term performance of the organisation. It increase the investment and raise the capital of
the company because it has the capacity to attract the investors to come and invest in
their company. As we all know, that employees are the asset of the organisation who put
all their efforts to add value and their interest within the organisation helps them to retain
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them at workplace. The highly satisfied employees leads to reduction in their
employment turnover (Sulistiyono and Arifin 2019). Any organisation which focus on the
right of the employees are capable of surviving in the competitive market for along run
and help to gain competitive advantages.
In United Kingdom, the Employment law is defined as a contract of service. It
means employment law is an statutory agreement through which obligations between
employers and employees are created on mutual understanding. It is an employment
contract which grants employer an authority to control and direct the work to its workers
at work place. Employment is often referred as labor law by many. In other words, it can
be said that an employment law attempts to mediate a coalition in the form of creating
recognized groups or unions among employees and employers.
UK Employment law is especially designed for protecting employees and employers as it
is a the most precise and unambiguous legal framework with special reference to
employees rights that defends workers from arbitrariness of an employer. However, it
also favors employers by permitting them to discard irresponsible and rogue employees
when held liable. In this way employment law ensures fairness between employees and
employers.
An Employment law is set to cover all the issues which may happen at working
environment which includes, all forms of discrimination on grounds of race, gender,
region, religion , creed or cast, harassment, extortion, bullying, disability, wages,
maternal or paternal leave, working hours, redundancy, dismissal of an employee and
many more.
Along with Employment law there are other laws and legislation which supplement
to each other on the same issues such laws and legislation are, Employment Relation
Act 1999 which aims to offer rights to employees to constitute trade union. Employment
Rights Act 1996 which deals with the issues of employment contract, unfair dismissal
and redundancy. National minimum Wages Act 1998, Agency Workers Regulations
2010 and the Maternity and Parental Leave Regulations 1999 and many more.
Besides Employment law, there are some important UK legislation for employees like,
Equality Act 2010, it prohibits all forms of discrimination at workplace. Bribery Act
2010, held criminal liability on act of bribery. Working Time Regulation 1998, it ensures
employees right to a minimum annual paid leave and set standards for average working
hour per week. The Health and Safety at Work Act 1974 aims to protect employees
and ensures heath and safety at workplace.
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Thus, an Employment laws are made with the view to protect the interest of
workers from the negative actions of employers. These laws and statues ensures that no
employee shall be left in vulnerable towards threats at work place.
All business organizations are under statutory obligations to provide protection
employees. It covers all types of companies form big to small having good employee
base. Employment law, especially works to provide support those individuals who are
employed on contract terms.
Businesses do affect by the application of Employment law as businesses
involved in various activities which requires human capital. The relationship between
employers and employees are certain and fixed therefore, businesses are clear on their
part what to expect from their employees. Businesses set standards as per prescribed by
business laws to provide fair and level playing area for all the candidates who are
recruited for business work. Employer must set a fair and reasonable standards minimum
wages for all the employees at certain level. Employment law mostly favors the
employees because these notion makes compelled employers to protect their
employees, as most large and small businesses in UK offer safe and friendly working
environment to its employees because the legislation imposed statutory duties on
employers in this regard. The positive impact of Employment law is that it enables
companies to run their businesses in United Kingdom across board. For instance,
Employment law imposed certain statutory duties and obligations on local businesses
and large enterprises to offer safe working environment for employees and workers
(Azimkhan and et.al2020). The companies needs to pass health and safety norms in
accordance with the UK law. Earlier before Brexit most of these practices were governed
under the directives of European Union. It is the statutory duty of an employer that it must
provide provide proper training and equip staff with with safety equipment at work place,
it means that there is a duty of care on side of an employer which must be complied with
at the demand of Employment law.
It is very clear that Employment law do affect business organizations as it is
evident from the employer employee interactions on daily basis at work place. All these
relations and practices are being monitored and reviewed through business policies.
Businesses are monitored by the Employment law and vise versa because, businesses
needs to be proactively response to any changes which may be made by the
government- it includes bringing modifications on the existing policies or creating new.
All the policies of businesses are timely reviewed and updated and shared the same with
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the management. The role of human resource management also plays crucial role as
they need to make sure that reviews are being made regularly and adequate training are
given to employees in order to attain the intentions of Employment law.
Corporate governance signifies an arrangement which defines a way in which
business corporations are governed by signifying their purpose. It signifies who vests
power and authority to make decision and held accountable. It directs management and
key faculties of a company on how to counter and face challenges of the existing
company. Corporate governance emphasize that a business must have reasonable and
effective decision making faculties and processes with the view to protect the interest of
the stake holders of the company like, customers, employees, suppliers etc.
Corporate governance is a form of tool through which objectives of a company are are
set in order to pursue in respect of social, regulations and market status. It follows certain
procedures for ensuring that a company should be operates in such way that it meets its
principle objectives (de Flamingh and Kiley 2018). A good corporate governance keeps
functionality of a company smooth and well ordered. It improves the quality in all aspects
from its infrastructure to its decision making process as it boost confidence in
stakeholders that their organization is well established in terms of performance. Good
governance promotes better quality, sustainable innovation, ethical decision making and
creates long term value for the company.
The UK corporate governance system is comprised in the form of laws and codes
customs and market guidelines. Rules and legal standards are taken from common law,
statutes like Companies Act 2006. The effectiveness of Corporate governance does not
limit to its territories, it has influenced many other countries in Europe and Asia. For a
company a defining feature of the code which states comply or explain approach. These
are mandatory rules for companies which are listed with stock exchange are required to
comply with the code or give reason they do not complied. The code issued to the notice
of flexibility,the code states that in case of non-compliance an explanation should be set
out by providing reasonable and logical reasoning which indicate whether company is
taking alternative measures to in order to deliver the principles that are set out the code
for preventing any further risk (Adel and et.al 2019).
The responsibility of corporate governance towards business operation is very
clear and certain. According to FRC, where a company is seeking long term success rate
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it is essential to facilitate an effective, productive, entrepreneurial, smart and reasonable
management for meeting the desired results. A corporate governance is responsible for
setting out the value of a company. The main role of it is to supervise the management of
a company in order elevate company's reputation and uphold its integrity by following
rigorous procedures and ensure legal compliance (Lending, Minnick and Schorno,2018).
The key role of a corporate governance over the businesses are to prepare strategies for
an organization, enhance leadership in order to implement such strategies. Supervise the
performance of management and promote relation with stakeholders along with
shareholders and other faculties.
The responsibilities of corporate governance can be classified into six broad
categories; the first one is accountability, which emphasize on leadership skills including
key faculties and senior managers all are collectively responsible and accountable
towards their conducts and actions.
The second category is Efficiency and effectiveness which ensures that leadership
must be such that it consistently supervise all the activities and operations are running
smoothly, effectively and efficiently in order to attained the goals of an organization.
The third category pertains to fairness, wherein all the leaders and key faculties of an
organization must act reasonably and prudently and remain honest, diligent, faithful
toward the company. They all must follow the ethical values and show virtuous
temperament (Fabrizi Guarini, and Meliciani 2022).
Responsibility is the fourth category imposed by the corporate governance over
business organization which demands sense of responsibility and capability and
awareness from leaders. Transparency is the fifth category which expects openness and
transparency in an organization. These are the primary elements of a good corporate
governance which enables leadership to report information about the company timely.
Independence is the last category which enables board to remain independent because it
is fairly important for practicing good corporate governance because it determines fair
decision making (Lombardi and et.al2019.).
All the business corporations with a premium listing of equity shares in the United
Kingdom is mandatory to explain their annual report and accounts regarding how they
applied for the principles of Corporate Governance Code and do they have followed with
the provisions of comply or explain approach.
The annual corporate report is the report which shows the company's corporate
governance status, standards, norms, culture, customs and practices and to offer real
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overview of the company's business strategies and procedure, structure, practices and
performance. Such report, provides the idea of corporate governance process and
cooperation, information about the composition of board, status of a company and its
performance and information relating to compliance and correspondence with best
practices for good corporate governance (Hogan Kortt and Dollery2022).
From the essay report it can be concluded that, employment laws is very essential
for determining relationship between employee and employer. The purpose of
employment law is to protect the employees from wrongdoing of an employer. Laws are
essential for businesses as it prevent unethical and arbitrary acts of an employer and
maintains fairness in business. Therefore, employment law makes sure that it protects
interests of both the parties employer and employee. However it is evident and certain
Employment law largely favors employees by offering them certain rights and benefits.
This legislation is equally applicable on all the forms of business types whether small or
large and demands that all the business faculties should be protected. The other concept
which which governs the businesses is the corporate governance, it is a tool which is
used for maintaining effective management of a company in order to uphold the integrity
of a company. A cooperate governance is classified into six main categories which
determined the relationship with companies stake holders and ensure legal compliance
by following accountability , efficiency, fairness, responsibility, transparency and
independence.
References
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Mugalula, P., 2020. Employment Law Update: UDB vs. Florence Mufumba COCA 241 of
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Dockès, E., 2019. New trade union strategies for new forms of employment. European
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Sulistiyono, T. and Arifin, R., 2019. An Employment Law Clinic: Developing of
Student’ s Capacity through Clinical Legal Education in Employment Matters
on ASEAN Economic Community Era. The Indonesian Journal of International
Clinical Legal Education, 1(2).
de Flamingh, J. and Kiley, E., 2018. Employment law: The spotlight on sexual harassment
continues. LSJ: Law Society of NSW Journal, (50), pp.82-83.
Azimkhan, A.,and et.al 2020. Impact of small and medium-sized entrepreneurship on
employment in Kazakhstan. Academy of Entrepreneurship Journal, 26(3), pp.1-10.
Fabrizi, A., Guarini, G. and Meliciani, V., 2022. Environmental networks and employment
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Hogan, O., Kortt, M.A. and Dollery, B., 2022. An Empirical Analysis of International
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Lombardi, and et.al., 2019. Corporate corruption prevention, sustainable governance and
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Production, 217, pp.666-675.
Lending, C., Minnick, K. and Schorno, P.J., 2018. Corporate governance, social
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Adel, C.,and et.al., 2019. Is corporate governance relevant to the quality of corporate social
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