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Study notes

Labour Market Legislation

  • Levels: A Level, IB, BTEC Level 3
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

Labour market legislation focuses on protecting the rights of employees at work and also managing the relationship between employers and employees.

Legislation on Individual Employment

The key areas are:

Equal pay:

The basic rule: men and women are entitled to equal pay for work of equal value

Minimum pay

The National Minimum Wage (NMW) is the minimum pay per hour most workers under the age of 25 are entitled to by law. The government's National Living Wage (NLW) is the minimum pay per hour most workers aged 25 and over are entitled to by law. The rate depend on a worker's age and if they are an apprentice.


It is illegal for an employer to discriminate against an employee on the basis of:

  • Sex, including pregnancy and maternity
  • Marital / civil partnership status
  • A person's disability
  • Race
  • Age
  • Sexual orientation
  • Religion/belief
  • Trade union membership or non-membership
  • Status as a fixed-term or part-time worker

Discrimination laws are particularly important for businesses since they impact many different aspects of human resource management, including:

  • Recruitment & selection
  • Employee contract - terms and conditions
  • Promotions and transfers
  • Providing training
  • Deciding what benefits employees receive
  • Employee dismissal

Employee Rights

An employee right is something to which an employee is entitled which is protected by law. In the UK employees have the legal right to:

  • Reasonable notice before dismissal
  • Redundancy
  • A written employment contract
  • Request flexible working
  • Be paid national minimum wage
  • Take time off for parenting

Legislation about Industrial Relations

This is another complex area. For A-Level business students, all you need to know is that this area of labour market legislation covers areas such as:

  • Employee protection from unfair dismissal
  • The requirement for employers to recognise a trade union if >50% of staff are members
  • Regulation of procedures for industrial action (e.g. ballots)
  • Role / powers of Employment Tribunals
  • EU – Works Councils requirements

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