Syllabus: 3.2 Influences on Business
Module: 3.2.2 Ethical and Environmental Considerations
Lesson: 3.2.5 Legislation

Introduction

This article focuses on AQA GCSE Business – Section 3.2.5: Legislation, part of the wider unit 3.2 Influences on Business. According to the AQA specification, students must understand how legislation impacts business operations, decision-making, and stakeholder relationships.

For teachers, this topic connects strongly to real-world application — making it ideal for learn by doing activities. It offers a gateway into ethical decision-making, operational constraints, and the tension between profit and compliance. Taught well, it can sharpen students’ understanding of how external pressures shape business behaviour — with clear links to both assessment and careers.

Key Concepts

The AQA specification outlines the following core areas for 3.2.5 Legislation:

• The purpose of legislation: to protect stakeholders (employees, consumers, environment, etc.)

• Types of legislation affecting business:

  • Consumer law – covering quality, safety, and fairness in goods/services.

  • Employment law – including contracts, minimum wage, discrimination, health and safety.

• Impact on business operations:

  • Cost implications (e.g. training, compliance systems)

  • Changes to business processes (e.g. fair recruitment practices)

  • Influence on product design and marketing

• Consequences of non-compliance:

  • Legal penalties and fines

  • Damage to brand reputation

  • Loss of customer trust or workforce morale

Real-World Relevance

Legislation is not abstract. From local cafes to global tech firms, every business must comply with the law. Here are three relevant case snapshots to bring the topic to life:

1. Boohoo & Labour Practices (2020): The fashion retailer faced scrutiny over poor working conditions in its UK supply chain. The backlash affected investor confidence, leading to an internal overhaul of its employment practices.

2. GDPR Breaches: Since GDPR came into force, even SMEs have had to rethink how they store customer data. British Airways was fined £20 million for a major data breach in 2020, illustrating the cost of non-compliance.

3. Pret a Manger & Allergen Labelling: Following a customer death linked to unlabelled allergens, Pret changed its food labelling practices. The incident influenced a national change in food labelling laws (“Natasha’s Law”).

These examples show students that legislation isn’t just red tape — it can be life-saving, reputation-shaping, and cost-defining.

How It’s Assessed

In the AQA GCSE Business exam, this topic typically appears in Paper 1: Influences of operations and HRM on business activity. Expect to see it in:

• Multiple-choice or short-answer questions (e.g. “Name two types of legislation affecting business.”)

• Explain-style questions (e.g. “Explain one way employment law might affect a small business.”)

• Extended 6-mark or 9-mark questions, often linked to a business scenario (e.g. “Discuss the impact on a business if it fails to comply with consumer law.”)

Students should be familiar with command words such as:

• Explain (demonstrate understanding with an example),

• Analyse (show cause and effect),

• Evaluate (weigh up impact, often with a supported judgement).

Effective answers require not just definitions but real-world application and structured reasoning.

Enterprise Skills Integration

This topic naturally builds a range of enterprise capabilities:

• Problem-solving: What should a business do if legislation increases costs? Students evaluate options and consequences.

• Decision-making: Choosing between cheaper processes and legal compliance encourages ethical reasoning and financial analysis.

• Communication: Applying this topic in roleplays (e.g. writing to HR or regulators) builds persuasive writing and stakeholder awareness.

• Risk analysis: Spotting the consequences of breaking laws (legal, financial, reputational) hones strategic thinking.

You can strengthen this further by using Enterprise Skills’ Business Simulations. These drop students into decision-making roles where they must navigate trade-offs under legislation constraints.

Careers Links

Understanding legislation is core to many careers — not just in law, but across business functions:

• Human Resources (HR): handling employment law, diversity, and safety.

• Marketing: ensuring advertising and data use complies with legal standards.

• Operations: designing systems that meet legal requirements for product quality, safety, and environment.

• Entrepreneurship: knowing how to build a legally sound business from the ground up.

Mapped to Gatsby Benchmarks 4, 5 and 6, this topic supports career awareness and workplace readiness. Use it to explore real job descriptions (e.g. compliance officer, operations manager) or invite guest speakers.

Teaching Notes

Save planning time with these practical strategies:

• Use real news stories: Students are more engaged when they can debate real headlines. Ask them to identify what legislation was involved and what the business could have done differently.

• Simulate compliance decisions: Use a short classroom roleplay or simulation where students must balance legal requirements with business goals.

• Link to local businesses: What laws affect your local takeaway, salon, or shop? Invite students to interview them or conduct research.

• Common misconceptions:

  • Students often confuse legal responsibility with ethical responsibility — clarify the difference.

  • They may see law as a barrier, not a framework for fairness — use cases like Natasha’s Law to build empathy.

Extension ideas:

• Research a recent business scandal and create a ‘compliance checklist’ the business could have used.

• Design a “start-up guide to UK business law” poster or infographic.

Avoid overloading with jargon. Keep lessons grounded, case-led, and decision-focused. This topic works best when students feel like they’re running the business, not just studying it.