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Cambridge IGCSE0450

Recruitment, selection and training of employees

Business Studies 0450 Chapter Notes

What this chapter covers

Recruitment, selection and training of employees - Recruitment and selecting employeesRecruitment, selection and training of employees - The importance of training and the methods of trainingRecruitment, selection and training of employees - Why reducing the size of the workforce might be necessaryRecruitment, selection and training of employees - Legal controls over employment issues and their impact on employers and employees
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Recruitment, selection and training of employees notes

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In this chapter

  1. 1Recruitment methods
  2. 2Selection methods
  3. 3Internal and external recruitment
  4. 4Stages in recruitment and selection
  5. 5Recommending who to employ
  6. 6Part-time and full-time employees
  7. 7Why training matters
  8. 8Induction training
  9. 9On-the-job training
  10. 10Off-the-job training
  11. 11Choosing between the methods
  12. 12Dismissal and redundancy defined
  13. 13Telling them apart in an answer
  14. 14Downsizing and automation
  15. 15Reduced demand for products
  16. 16Choosing who to make redundant
  17. 17Justifying a redundancy decision
  18. 18Employment contracts
  19. 19Unfair dismissal
  20. 20Discrimination and equal opportunities
  21. 21Health and safety
  22. 22Legal minimum wage
  23. 23Impact on employers and employees

1. Recruitment methods

A business with a vacancy must first attract applicants. Recruitment methods are the ways of advertising the job to them.

A specialist or trade magazine can target potential employees interested in this industry. Online and social media adverts can reach large numbers of people, but not everyone has access to the internet. A recruitment agency saves administration time, but it charges a fee. A government-run job centre costs the business nothing, but it only reaches people who are actively looking for a job.

A local newspaper advert could be ignored. A national newspaper advert must be paid for, which increases costs. Posters, job fairs and word of mouth are also credited.

Examiner insight

“The most common mistake was to discuss methods of selection rather than recruitment.” “Some candidates confused methods of advertising jobs with advertising products.”

Worked example 16 marks

Explain two methods of external recruitment a business could use. Which is likely to be the best method for a business to use? Justify your answer.

  1. 1

    Knowledge: specialist or trade magazines are one method. [1]

  2. 2

    Analysis: they can target potential employees interested in this industry or type of work. [1]

  3. 3

    Knowledge: a recruitment agency is another method. [1]

  4. 4

    Analysis: it saves administration time, but it charges a fee for its services. [1]

  5. 5

    Evaluation: the agency is likely to be the best method. [1]

  6. 6

    Evaluation: managers can carry on with their own work, which is worth more than the fee, while a magazine advert still leaves the business to deal with every application. [1]

2. Selection methods

Recruitment attracts applicants. Selection chooses the best one from them. The two are not the same.

The methods named by examiners are application forms, interviews and aptitude tests. An interview allows in-depth questions to be asked. It can be time-consuming, because a large business may have to interview many people.

Say why a method costs more or takes longer. Judge each method by what is best for the employer, not for the applicant.

Examiner insight

“Statements about each method being costly/cheaper or more time/less time were made without any explanation as to why they might be more or less costly or take more or less time to complete.” “Some weaker candidates focussed on the employee perspective, not what was best for the employer.”

Worked example 16 marks

Bright Bakes has 12 shops. It is selecting a new shop assistant for each one. Explain one advantage and one disadvantage to Bright Bakes of using interviews to select its shop assistants.

  1. 1

    Knowledge: interviews allow in-depth questions to be asked. [1]

  2. 2

    Application: managers can ask how each applicant would serve customers in a bakery. [1]

  3. 3

    Analysis: this makes it more likely that a suitable shop assistant is chosen. [1]

  4. 4

    Knowledge: interviews are time-consuming. [1]

  5. 5

    Application: with a vacancy in each of its 12 shops, Bright Bakes must interview many people. [1]

  6. 6

    Analysis: managers are taken away from running the shops while they interview. [1]

3. Internal and external recruitment

Internal recruitment fills a vacancy with someone who already works for the business. External recruitment fills it with someone from outside.

An internal appointee is already well known to the business. The appointment can be motivating, because other staff may work hard to gain a future promotion. The drawbacks are jealousy among colleagues, a lack of new ideas, and applicants who may not have the skills needed. Promotion also creates another vacancy to fill.

External recruitment gives a wider choice of applicants. It can bring in new ideas and skills the business lacks. The drawbacks are higher costs, such as advertising and agency fees, and a new person who may not know the business.

Examiner insight

“Many candidates stated that internal recruits would not require training, showing a lack of understanding that promotion usually requires some form of training.” “There were a minority of candidates who thought the two methods of recruitment meant that internal recruitment was from within a country while external recruitment was from outside the country.”

Worked example 16 marks

Hollis Hardware is a family business with 8 DIY shops. It has a vacancy for a store manager. It could appoint a current employee or advertise outside the business. Do you think internal recruitment is the better option for Hollis Hardware? Justify your answer.

  1. 1

    Knowledge: an internal appointee is already well known to the business. [1]

  2. 2

    Analysis: the promotion can motivate other staff, who may work hard to gain future promotion. [1]

  3. 3

    Knowledge: external recruitment gives a wider choice of applicants. [1]

  4. 4

    Analysis: this makes it more likely that the best person for the job is found. [1]

  5. 5

    Evaluation: internal recruitment is the better option for this vacancy. [1]

  6. 6

    Evaluation: a store manager must know how the shops work, and an outsider would have to learn this, even though the choice of applicants would be narrower. [1]

4. Stages in recruitment and selection

The stages follow an order. Job analysis comes first. The business then writes a job description, which gives details of the tasks and duties of the job. Next is the person specification (also called the job specification). It lists the skills, experience and qualifications the job needs.

The business then advertises the job. Application forms are sent out and received. Shortlisting removes unsuitable applicants before the interviews, so interview time is saved.

Interviews or tests follow. The last stage is selection: the job offer is made and the vacancy is filled.

Examiner insight

“A common misconception was to assume training is a stage in the recruitment process.” “Candidates often lost marks through imprecise use of language such as stating ‘applying’ rather than ‘application forms sent/received’.”

Worked example 14 marks

Identify four stages in the recruitment process.

  1. 1

    Knowledge: job description. [1]

  2. 2

    Knowledge: person specification. [1]

  3. 3

    Knowledge: advertise the job. [1]

  4. 4

    Knowledge: interviews. [1]

5. Recommending who to employ

Start from the job specification. Compare each applicant with the skills, experience and qualifications it asks for, and apply each point to the business in the question.

Explain what each strength or weakness means for the business. A skill is only useful if you say how it helps. A gap is not final if the business can pay for training, though training costs time and money.

End with a decision. Name the applicant you would choose, give a reason, and say why the others are less suitable.

Examiner insight

“Many candidates found this question easy to write an extensive answer to, but often it just referred to the same response for each applicant, such as speaks 2 languages so can communicate well, speaks 1 language so communication might be difficult.” “Many candidates did move into Level 2 by including a conclusion which had a decision that justified the chosen applicant and reasons why the other two applicants were less suitable.”

Worked example 18 marks

Pennine Outdoors sells walking and climbing equipment in 5 shops. It needs a new assistant manager. The job specification asks for selling experience and knowledge of the products. Two people have applied. Recommend which applicant Pennine Outdoors should appoint. Justify your answer.

ApplicantExperienceCurrently
Asha5 years selling in a sports shopWorks for a rival
Ben2 years in the Pennine stockroomPennine employee
  1. 1

    Knowledge: each applicant must be compared with the job specification. [1]

  2. 2

    Application: Asha has 5 years of selling experience, which the job asks for. [1]

  3. 3

    Application: Ben knows Pennine's products from his 2 years in its stockroom. [1]

  4. 4

    Analysis: Asha can advise customers from her first day, so sales are not lost while she learns Pennine's own product range. [1]

  5. 5

    Analysis: Ben has never sold to customers, so he needs training, which costs time and money, and his stockroom job must then be filled. [1]

  6. 6

    Evaluation: appoint Asha. [1]

  7. 7

    Evaluation: she already has the selling experience the job specification asks for, so she needs less training than Ben. [1]

  8. 8

    Evaluation: Ben is less suitable because he would have to learn to sell, and promoting him creates a second vacancy. [1]

6. Part-time and full-time employees

Part-time employees offer flexibility in the hours worked. A business can have more of them in at busy periods. They are only paid for the hours worked, which can lower the total wage bill. Some are highly skilled consultants whose skills are not needed full time.

The limitations are that they may be less committed to the business, which can lead to extra recruitment costs. It may also take longer to recruit two part-time employees than one full-time employee.

Full-time employees are available throughout the day and show commitment. Loyalty can improve productivity. Whether they are more skilled or better motivated depends on the job and the person.

Examiner insight

“Many confuse part-time employees with temporary or seasonal workers.” “Many candidates continue to make incorrect assumptions about full-time employees. For example, they must be more skilled, efficient or motivated which is not necessarily true as this depends on the job and/or the person.”

Worked example 16 marks

Seaview Café has 6 staff. It is very busy at weekend lunchtimes and quiet on weekday mornings. The owner wants to employ part-time rather than full-time staff. Explain two benefits to Seaview Café of employing part-time employees.

  1. 1

    Knowledge: part-time employees offer flexibility in the hours they work. [1]

  2. 2

    Application: more staff can be in at weekend lunchtimes. [1]

  3. 3

    Analysis: customers are served quickly, so sales are not lost. [1]

  4. 4

    Knowledge: part-time employees are only paid for the hours worked. [1]

  5. 5

    Application: no wages are paid for the quiet weekday mornings. [1]

  6. 6

    Analysis: this lowers the café's total wage costs. [1]

Recap

  • Recruitment attracts applicants. Selection chooses between them.
  • External methods: trade magazines, online adverts, agencies, job centres, newspapers. Each has a reason for and against.
  • Selection methods: application forms, interviews, tests. Say why a method costs more or takes longer.
  • Internal recruitment: well known and motivating, but jealousy and few new ideas. External: wider choice and new ideas, but higher cost.
  • Stages: job analysis, job description, person specification, advertise, application forms, shortlisting, interviews, job offer. Training is not a stage.
  • Recommend: compare each applicant with the job specification, apply it, then decide and say why the others are less suitable.
  • Part-time: flexible and paid for hours worked. Full-time: available all day and committed. Never assume one is always cheaper or more skilled.

7. Why training matters

Training teaches employees the skills and knowledge they need to do their jobs. It matters to the business and to the employees.

For the business, trained employees make fewer mistakes and waste less, and they can raise productivity. Training in safety cuts accidents. In a service business it improves the quality of service, which helps the reputation and customer loyalty.

For employees, training brings new skills and can increase motivation. Motivated employees are less likely to leave. Training also has a cost: employees are paid while they are not working.

Examiner insight

“Some responses briefly mentioned several reasons for training instead of developing the explanation of just two points, whilst others repeated themselves.” “A common mistake was to refer to production or output, which was irrelevant as the question was about a service sector business.”

Worked example 14 marks

Marlow Bakery has 8 employees. It has bought two new ovens and the owner plans to train her bakers to use them. Outline two reasons why training is important to Marlow Bakery.

  1. 1

    Knowledge: training leads to fewer mistakes and less waste. [1]

  2. 2

    Application: bakers trained on the new ovens burn fewer batches of bread. [1]

  3. 3

    Knowledge: training improves safety, so there are fewer accidents. [1]

  4. 4

    Application: the ovens are hot, so trained bakers are less likely to be burned. [1]

8. Induction training

Induction training is given to new employees when they start. It introduces them to the workplace, the work and the other people.

Its benefits are that new employees settle quickly into the job and are less likely to make mistakes. They learn health and safety rules before they start, meet other workers, and may feel more motivated. It may also be a legal requirement.

Its limitations are cost and time. The employees are paid but are not yet doing the job, and they start work later, so the business may not run at full capacity.

Examiner insight

“Incorrect answers often focused on a general definition of training or confused induction training with on-the-job or off-the-job training.”

Worked example 16 marks

SDY sells hats and scarves. It has 240 shops and 3000 employees. All new employees will be given induction training. Explain one advantage and one disadvantage of SDY using induction training for its new employees.

  1. 1

    Knowledge: helps new employees gain knowledge about the work and settle quickly into the job. [1]

  2. 2

    Application: in the shops, selling hats and scarves. [1]

  3. 3

    Analysis: so it can help maintain standards. [1]

  4. 4

    Knowledge: employees are not working but are still being paid. [1]

  5. 5

    Application: SDY employs 3000 employees. [1]

  6. 6

    Analysis: which increases costs. [1]

9. On-the-job training

On-the-job training is training while working, usually by learning from another employee at the workplace. It is not the same as induction, which is for new employees only.

Its advantages are that it is cheaper than off-the-job training, employees carry on working so some of the product is made or the service is provided, and the training is tailored to the business. No time is needed away from the workplace.

Its disadvantages are that the trainer may pass on bad habits, the trainer is less productive while training, and the methods may not be up to date. More mistakes may be made while employees learn.

Examiner insight

“Candidates lost marks by specifying that this was training for new workers and therefore providing an explanation that could be related to induction.” “A common error was to give imprecise answers such as ‘cheaper’. To gain credit for this advantage the candidate would need to state that the method was cheaper than off-the-job training.”

Worked example 16 marks

LMB provides healthcare services for people aged 70 years and above. It is a large public sector business which is continuing to grow. The human resources manager is planning on-the-job training for all LMB’s employees. Explain one advantage and one disadvantage to LMB of using on-the-job training.

  1. 1

    Knowledge: it is cheaper than off-the-job training. [1]

  2. 2

    Application: for the public sector business. [1]

  3. 3

    Analysis: which lowers costs. [1]

  4. 4

    Knowledge: trainers may pass on bad habits. [1]

  5. 5

    Application: to healthcare services. [1]

  6. 6

    Analysis: decreasing the quality of the services. [1]

10. Off-the-job training

Off-the-job training is training away from the workplace. It is given by someone else, such as a specialist trainer, at a place such as a college or training centre. It is not training outside working hours.

Its advantages are that specialist trainers teach up-to-date skills, so new skills and techniques come into the business.

Its disadvantages are that it usually costs more than on-the-job training, and the employees are away from work. The revenue of a small business may fall sharply while its workers are away.

Examiner insight

“Many candidates understood that ‘off-the-job’ training was training away from the workplace. The second mark was often not achieved as the candidate did not mention ‘who’ provided the training or ‘where’ it would happen.” “The weakest candidates provided very general points, i.e. workers will learn new skills or this maybe time-consuming. Without further development such answers could not be rewarded, as they could relate to any type of training.”

Worked example 16 marks

Brightside Dental Clinic has 12 employees. The owner is sending two dental nurses to a two-day course, run by the manufacturer at a training centre, to learn to use a new scanner. Explain one advantage and one disadvantage to Brightside Dental Clinic of off-the-job training.

  1. 1

    Knowledge: specialist trainers teach up-to-date skills. [1]

  2. 2

    Application: the manufacturer’s own trainer shows the nurses how to use the scanner. [1]

  3. 3

    Analysis: so they make fewer mistakes with an expensive machine and patient care improves. [1]

  4. 4

    Knowledge: employees are away from the workplace. [1]

  5. 5

    Application: with only 12 employees, two nurses are missing for two days. [1]

  6. 6

    Analysis: so appointments may be cancelled, and the clinic loses revenue. [1]

11. Choosing between the methods

A question that asks which method is best, or whether the advantages are greater than the disadvantages, needs a justified decision. To reach the evaluation marks you must refer to one relevant advantage and one relevant disadvantage.

A decision with no reason earns nothing. Do not repeat the points you have already made: give a reason why one side matters more. A question about ‘a business’, not a named one, has no marks for application.

A point can only be used once. Saying on-the-job is cheaper and then that off-the-job is dearer is one point.

Examiner insight

“Some answers tended to be quite theoretical and not applied to RW, and others contained mirror answers, such as on-the-job being cheaper and off-the-job being more expensive.” “Where a decision was made, this was usually not supported so could not count as evaluation.”

Worked example 16 marks

CCH builds large boats in its factory. The business has 1800 employees. All CCH’s employees are offered regular on-the-job training. Do you think the advantages to a business of using on-the-job training are greater than the disadvantages? Justify your answer.

  1. 1

    Knowledge: employees can carry on working whilst being trained. [1]

  2. 2

    Analysis: so some work is done. [1]

  3. 3

    Knowledge: mistakes can be made. [1]

  4. 4

    Analysis: which could damage the reputation of the business. [1]

  5. 5

    Evaluation: the disadvantages are greater, because a poor reputation could mean fewer sales. [1]

  6. 6

    Evaluation: and if the work includes mistakes, this increases the cost and time of rework. [1]

Recap

  • Training helps the business: fewer mistakes, higher productivity, fewer accidents, better service.
  • Training helps employees: new skills, more motivation, so they are less likely to leave.
  • Induction = training for new employees. Good: settle quickly, safety. Bad: paid but not working, late start.
  • On-the-job = learning while working. Good: cheaper than off-the-job, work continues, tailored. Bad: bad habits, trainer less productive.
  • Off-the-job = away from the workplace, with a specialist. Good: specialist trainers, up-to-date skills. Bad: costs more, time away.
  • Do not mix up the three methods. State who trains and where.
  • Develop two points in full and apply them to the business. A decision needs a reason, not a summary.

12. Dismissal and redundancy defined

Dismissal is when a worker loses their job because of their own bad behaviour. The employer ends the job because of something the worker did.

A redundancy is when a worker loses their job because the job role no longer exists. It is through no fault of the employee.

The cause is the whole difference. Dismissal is about the person. Redundancy is about the job.

Examiner insight

“Often one mark was awarded for explaining that this involves a worker losing their job for some sort of bad behaviour.” “A common mistake was to identify reasons why people might be made redundant or candidates simply stated it was through no fault of the employee without indicating that this was because the job role no longer existed.”

Worked example 12 marks

Norvik Tiles makes bathroom tiles for builders. It employs 60 people in one factory. Define 'redundancy'.

  1. 1

    Knowledge: a worker loses their job. [1]

  2. 2

    Knowledge: because the job role no longer exists, through no fault of the worker. [1]

13. Telling them apart in an answer

Test each case with one question: why has the job ended? If the worker did something wrong, it is dismissal. If the business no longer needs the role, it is redundancy.

A definition says what the word means. It does not list the reasons a business might choose it. Neither word means the same as retirement.

When a case gives two workers who lose their jobs, name the cause for each one.

Examiner insight

“The weakest answers confused dismissal with redundancy or retirement.” “A number of candidates focused upon why workers could be made redundant rather than providing a definition of the term.”

Worked example 14 marks

Pelham Print employs 40 staff. Last month the owner dismissed one printer for repeated lateness. She also made two binders redundant after buying a machine that does their work. Explain the difference between the two.

  1. 1

    Knowledge: dismissal is losing a job because of the worker's own behaviour. [1]

  2. 2

    Application: the printer lost the job because of repeated lateness. [1]

  3. 3

    Knowledge: redundancy is losing a job because the role no longer exists. [1]

  4. 4

    Application: the machine does the binders' work, so their roles have gone and it was not their fault. [1]

14. Downsizing and automation

Downsizing means reducing the size of the workforce. Several situations can make it necessary. One is automation.

With automation, machines replace workers. The machines do the work, so fewer workers are needed. The roles disappear and the workers affected are made redundant.

The business may keep some of them. Staff can be trained to use the new machine.

Examiner insight

“The strongest candidates identified the introduction of automation and relocation.” “Many candidates correctly realised that employees would be made redundant, but failed to realise that some could be trained on the new machine.”

Worked example 14 marks

Tavo Bottling fills water bottles by hand. It employs 90 workers. It has bought a machine that fills and seals the bottles. Explain one reason why Tavo Bottling might need to reduce its workforce.

  1. 1

    Knowledge: automation replaces workers with machines. [1]

  2. 2

    Application: the new machine does the filling and sealing that the 90 workers did by hand. [1]

  3. 3

    Analysis: so fewer workers are needed to fill the same number of bottles. [1]

  4. 4

    Analysis: the filling roles disappear, so some workers are made redundant. [1]

15. Reduced demand for products

Demand for a product can fall. The business then sells less, so it makes less.

Lower output needs fewer workers. The roles that are no longer needed end, and those workers are made redundant.

Name the cause as falling demand. Do not name it as a lack of profit.

Examiner insight

“A common error was to state that a lack of profit or poor workforce would result in downsizing.”

Worked example 12 marks

Kestrel Toys makes board games in one factory. Sales of its games have halved over two years. Outline one reason why Kestrel Toys might need to reduce its workforce.

  1. 1

    Knowledge: demand for the product has fallen, so less output is needed. [1]

  2. 2

    Application: with sales halved, the factory makes half as many board games and needs fewer workers. [1]

16. Choosing who to make redundant

A case gives profiles of several employees. Judge each one against what the business still needs: their skills, their experience and their behaviour.

Redundancy is about the role, not the person. First decide which role is no longer needed. Then use the profiles to interpret each employee. Do not copy them out.

A good answer gives a clear recommendation for one employee.

Read the question with care. It asks who to make redundant, not who to keep.

Examiner insight

“It is important to understand that in terms of redundancy it is the role itself and not the actual employee who is at risk.” “Some recommendations for redundancy focused too heavily on the age of each receptionist rather than the lack of skills and inexperience.”

Worked example 18 marks

Linden Dental has three receptionists. A new online booking system means only two are needed. Mo has ten years' experience, can use the new system, but is often late. Priya has two years' experience, no qualifications and cannot yet use the new system. Dev has five years at other clinics, a good record and ideas for the new system. Recommend which receptionist Linden Dental should make redundant. Justify your answer.

  1. 1

    Knowledge: employees are judged on factors such as skills, experience and behaviour. [1]

  2. 2

    Application: Priya has the least experience and cannot yet use the new booking system. [1]

  3. 3

    Analysis: keeping her would mean paying for training before she is useful. [1]

  4. 4

    Application: Dev has a good record and has ideas for the new system. [1]

  5. 5

    Analysis: he could improve how the clinic uses the system, so he would be costly to lose. [1]

  6. 6

    Application: Mo is often late, but he has ten years' experience and can already use the new booking system. [1]

  7. 7

    Evaluation: Linden Dental should make Priya redundant. [1]

  8. 8

    Evaluation: her weaker skills make her the least valuable to keep, and the clinic keeps the two who can run the new system. [1]

17. Justifying a redundancy decision

A recommendation needs a decision and reasons. Weigh both sides before you decide.

Redundancy cuts the wage bill. It also brings redundancy payments, which raise cash outflows at first. Staff who remain may fear for their jobs.

Develop each point to show how or why it affects this business. A bare mention of cost is not enough.

Examiner insight

“A clear, justified recommendation for one employee to be made redundant was required in the conclusion.” “Weaker answers were characterised by simple statements such as the cost of redundancy or the impact on other workers.”

Worked example 112 marks

Ridgeway Bakery has 48 bakers. Its sales have fallen by 15% over two years and it is losing money. The owner wants to make 12 bakers redundant to cut costs. Do you think this is the best way for Ridgeway Bakery to cut costs? Justify your answer.

  1. 1

    Knowledge: redundancy reduces the wage bill. [1]

  2. 2

    Knowledge: the business has to pay redundancy payments to the workers who leave. [1]

  3. 3

    Application: 12 of the 48 bakers is a quarter of the baking staff. [1]

  4. 4

    Application: sales have fallen by 15%, so the bakery makes fewer loaves than its bakers can produce. [1]

  5. 5

    Analysis: lower wages cut cash outflows each month, so the losses fall. [1]

  6. 6

    Analysis: the redundancy payments raise cash outflows at first, so the saving comes later. [1]

  7. 7

    Analysis: the 36 bakers who stay may fear for their own jobs, so their motivation falls. [1]

  8. 8

    Analysis: lower motivation could cut output and quality of the bread. [1]

  9. 9

    Evaluation: redundancy is a suitable way, because sales have fallen and the bakery needs fewer bakers. [1]

  10. 10

    Evaluation: the wage saving continues every month while the payments are paid once. [1]

  11. 11

    Evaluation: but 12 is too many, because a quarter of the bakers would go when sales fell by only 15%, so 36 may be too few to meet demand. [1]

  12. 12

    Evaluation: so the owner should make fewer than 12 redundant and tell the staff who stay the reasons, to protect motivation. [1]

Recap

  • Dismissal = losing a job because of the worker's own behaviour.
  • Redundancy = losing a job because the job role no longer exists. Not the worker's fault.
  • Ask why the job ended: the person (dismissal) or the role (redundancy).
  • A definition does not list reasons. Retirement is a different thing again.
  • Downsizing = reducing the size of the workforce. Causes: automation, reduced demand.
  • Choosing who: judge skills, experience and behaviour. Interpret the profiles and give a clear recommendation.
  • Justify: weigh wage savings and redundancy payments, develop each point, then decide.

18. Employment contracts

A contract of employment sets out the conditions of employment that an employer and an employee agree. The law can require a business to provide one.

The conditions include holiday entitlement, sick days and the hours that can be worked. They are all areas of the same contract, so naming two of them gives one legal control, not two.

A legal minimum age to work is a separate legal control over employment.

Examiner insight

“There was some repetition from candidates who identified multiple areas of the employment contract, such as holidays allowed for one control and then the maximum hours that could be worked as another.” “The second mark for each legal control was for a development of how the law benefits employees.”

Worked example 12 marks

CCH builds large boats in its factory. The business has 1800 employees who are all members of a trade union. Identify two legal controls over employment that might affect a business.

  1. 1

    Knowledge: contract of employment, for example holiday entitlement or sick days [1]

  2. 2

    Knowledge: health and safety, or the legal minimum wage [1]

19. Unfair dismissal

Dismissal is when an employer tells a worker to leave their job because the worker's behaviour or work is unsatisfactory. The law gives employees protection against unfair dismissal, so an employer needs a fair reason.

This gives employees job security. It does not stop an employer from dismissing a worker on justified grounds. A business that is not dismissing anyone is unlikely to be affected.

Dismissal is not redundancy. Redundancy is when the job role no longer exists. It is the role, not the employee, that is at risk. Dismissal is not retirement either.

Examiner insight

“Many candidates were not able to clearly define dismissal. Often one mark was awarded for explaining that this involves a worker losing their job for some sort of bad behaviour.” “Many responses stated the company would never be able to get rid of staff, that the employer was powerless and could not dismiss any of the workers even on justified grounds.”

Worked example 12 marks

Ridgeway Cafe employs nine staff. The owner dismissed a waiter after he repeatedly arrived late and was rude to customers. Define 'dismissal'.

  1. 1

    Knowledge: the employer tells a worker to leave their job [1]

  2. 2

    Knowledge: because the worker's behaviour or work is unsatisfactory [1]

20. Discrimination and equal opportunities

The law controls discrimination at work. It gives equal opportunities and protects employee rights.

A business must follow this law. It is a legal control, not an ethical choice. Paying wages or not discriminating are things the law requires.

Examiner insight

“A number of candidates confused ethical with legal issues, incorrectly stating redundancy or types of discrimination.”

Worked example 14 marks

Pemberton Fitness employs 25 coaches. The owner is advertising for new coaches. Outline two ways a law against discrimination protects coaches and applicants.

  1. 1

    Knowledge: gives equal opportunities [1]

  2. 2

    Application: a woman who applies to be a coach has the same chance as a man [1]

  3. 3

    Knowledge: protects employee rights [1]

  4. 4

    Application: one of the 25 coaches cannot be treated worse because of age [1]

21. Health and safety

Health and safety law controls working conditions. It leads to safer working conditions and fewer accidents.

For the business, the law means training and safety equipment. These increase costs, and employees cannot do their normal work during training.

The safer workplace lowers the chance of legal action. A cost such as a safety qualification may be a one-off payment.

Examiner insight

“Answers in the health and safety section often stated that there would be an increase in the costs for training and purchasing safety equipment. However, answers were often brief statements rather than developed explanations of the effects on the business, keeping answers in the lower mark band.”

Worked example 16 marks

Tidewater Boats builds fishing boats and employs 30 workers who use heavy cutting machines. A new health and safety law means every worker must be trained to use the machines safely. Explain one advantage and one disadvantage to Tidewater Boats of this law.

  1. 1

    Knowledge: advantage: fewer accidents and a safer workspace [1]

  2. 2

    Application: workers who use heavy cutting machines are less likely to be hurt [1]

  3. 3

    Analysis: so there is less chance of legal action against the business [1]

  4. 4

    Knowledge: disadvantage: training increases costs [1]

  5. 5

    Application: all 30 workers must be trained [1]

  6. 6

    Analysis: while they train they cannot build boats, so output falls [1]

23. Impact on employers and employees

Each legal control protects employee rights and gives employers a duty. For the employee it brings job security, equal opportunities, safer conditions or a minimum pay. For the employer it can increase costs.

To analyse an effect, build a chain: how the law changes what the business must do, what that does to the business, then the effect on profit.

Apply it to the business. Use its number of employees, its pay compared with the minimum and its kind of work. In a conclusion, justify why one control has the greatest effect and why the others have less.

Examiner insight

“Better answers contained a chain of reasoning, i.e. how the change affects the business, the impact on the business from the change and then the effect on the profits of the business.” “Weaker conclusions just repeated earlier points without any comparison as to why one change may have a greater effect on profit than the other changes or they simply summarised the effects of the changes without linking them to profit.”

Worked example 112 marks

Calder Furniture makes wooden tables and employs 40 workers on pay just above the legal minimum wage. The government will raise the legal minimum wage and will require safety equipment on every machine. Recommend which one legal control will have the greater effect on Calder Furniture. Justify your answer.

  1. 1

    Knowledge: a rise in the legal minimum wage increases wage costs [1]

  2. 2

    Knowledge: health and safety law requires safety equipment, which increases costs but gives safer working conditions [1]

  3. 3

    Application: all 40 workers are paid just above the minimum, so every wage may have to rise [1]

  4. 4

    Application: every machine in the table workshop needs equipment [1]

  5. 5

    Analysis: the higher wages are paid to all 40 workers every month from now on, so costs rise and profit falls [1]

  6. 6

    Analysis: the wage rise may motivate workers, so efficiency rises and offsets some of the cost [1]

  7. 7

    Analysis: safety equipment is a payment made once, and it leads to fewer accidents [1]

  8. 8

    Analysis: so the effect of this control on profit is smaller [1]

  9. 9

    Evaluation: decision: the legal minimum wage will have the greater effect [1]

  10. 10

    Evaluation: reason: it is paid again every month to all 40 workers [1]

  11. 11

    Evaluation: the equipment has less effect because it is paid for once [1]

  12. 12

    Evaluation: limit: higher efficiency from motivated workers may reduce the effect on profit [1]

Recap

  • Legal controls over employment: contract of employment, unfair dismissal, discrimination, health and safety, legal minimum wage.
  • A contract of employment sets out conditions such as holiday entitlement, sick days and working hours. Two conditions from it count as one control.
  • Dismissal: the employer tells a worker to leave because their behaviour or work is unsatisfactory. Redundancy: the job role no longer exists.
  • Protection against unfair dismissal gives job security, but an employer can still dismiss on justified grounds.
  • Discrimination law gives equal opportunities. It is a legal control, not an ethical one.
  • Health and safety law gives safer working conditions but increases costs for training and equipment.
  • A rise in the legal minimum wage increases costs but may motivate employees. A business paying well above it is affected less.
  • Always build a chain: what the law makes the business do, the effect on the business, then the effect on profit.

End-of-chapter exercise

Test yourself on the whole chapter. Work through these before moving on.

  1. Define ‘internal recruitment’.2 marks
  2. Fenwick Toys is hiring a shop manager. Identify two stages in the recruitment process.2 marks
  3. Rosewood Gym needs a new fitness instructor. Identify two methods of external recruitment it could use.2 marks
  4. Marsh Motors is a garage with 4 employees. The owner repairs cars himself all day. He wants to use a recruitment agency to find a new mechanic. Outline one advantage and one disadvantage to Marsh Motors of using a recruitment agency.4 marks
  5. Tolland Travel is a travel agent. It wrote a job description for one office job and received 80 applications. Outline how the job description and shortlisting each help Tolland Travel to recruit.4 marks
  6. Dune Pizza is open from 6 pm to midnight and is busiest on Friday and Saturday. Outline one benefit and one limitation to Dune Pizza of employing part-time staff.4 marks
  7. Alder Care has 30 care homes. It is selecting a new care assistant for each home. Explain one advantage and one disadvantage to Alder Care of using application forms rather than interviews to select its care assistants.6 marks
  8. Kestrel Print has 40 employees. The owner plans to fill a vacancy for a supervisor with someone from outside the business. Do you think external recruitment is better than internal recruitment for this vacancy? Justify your answer.6 marks
  9. Harbour Hotel is open 24 hours a day. It needs a night receptionist for 40 hours a week. Two people have applied. A second part-time receptionist would also be paid textdollar12 an hour. Recommend which applicant Harbour Hotel should appoint. Justify your answer. | Applicant | Hours wanted | Wage | Hotel experience | | --- | --- | --- | --- | | Dina | 20 a week | textdollar12 an hour | 3 years | | Eli | 40 a week | textdollar10 an hour | None. Needs 2 weeks of paid training |8 marks
  10. Orchard Foods makes jam in a factory with 25 employees. It is replacing hand filling with an automated production line. The job specification for its new production manager asks for experience of managing a team and knowledge of automated production. Farid is a supervisor at Orchard Foods. He has never worked with automated production and needs a course in it. Greta is a production manager at a larger food business that uses automated lines. A recruitment agency found her and charges a fee. Recommend which applicant Orchard Foods should appoint. Justify your answer. | Applicant | Experience | Salary a year | One-off cost | | --- | --- | --- | --- | | Farid | 10 years, manages 6 workers | textdollar30 000 | textdollar4000 course | | Greta | 4 years, manages 40 workers | textdollar36 000 | textdollar5000 agency fee |12 marks
  11. Oakley Print trains its 5 employees to use a new printer. Identify two reasons why training is important to a business.2 marks
  12. Define ‘induction training’.2 marks
  13. Define ‘off-the-job training’.2 marks
  14. Hollis Hotel trains its 20 receptionists to use a new booking system. Outline two ways the training could benefit the receptionists.4 marks
  15. Greenfield Care Home has 30 care assistants. They are learning a new way to lift residents safely by working alongside an experienced assistant. Outline two advantages to the care home of this method of training.4 marks
  16. Tyrell Tyres opens a new depot and employs 20 new delivery drivers. Each driver will have two days of induction training. Explain one advantage and one disadvantage to Tyrell Tyres of induction training.6 marks
  17. Penrose Library has 10 employees. The head librarian is sending two of them on a week-long course at a college to learn a new cataloguing system. Explain one advantage and one disadvantage to the library of off-the-job training.6 marks
  18. Bright Spark Electrical employs 12 electricians who fit wiring in people’s homes. The owner trains them every year. Explain two reasons why training is important to Bright Spark Electrical.6 marks
  19. Harbour Hotel opens only for a 10-week summer season. Each year it recruits 30 new employees. Each one has two days of induction training, paid at $80 a day, before starting work. To save money, the manager wants to stop induction and let new employees learn on-the-job from their first day. Do you think Harbour Hotel should stop its induction training? Justify your answer.6 marks
  20. Fenwick Furniture makes wooden chairs. Its 40 production workers make 800 chairs a day, and each chair sells for $25. Next month it will install automated cutting machines that none of the workers has used. The supplier of the machines offers two ways to train all 40 workers. The table gives the details. Which method should Fenwick Furniture choose? Justify your decision. | | Off-the-job | On-the-job | | --- | --- | --- | | Where | Supplier’s training centre | Fenwick’s factory | | Trainer | Supplier’s trainers | Supplier’s engineer | | Time | 3 days | 15 working days | | Fee ($) | 200 per worker | 6000 in total | | Output during training | No chairs made | 25% lower than normal |12 marks
  21. Sorrel Hotel has 30 staff. Last week the manager dismissed a waiter. Define 'dismissal'.2 marks
  22. Vance Mills weaves cloth. It has made 15 of its weavers redundant. Define 'redundancy'.2 marks
  23. Brightway Cars assembles cars with 300 workers. It has bought robots that now do most of the welding. Outline one reason why Brightway Cars might reduce its workforce.2 marks
  24. Keel Foods ended the jobs of two workers. One ignored safety rules several times. The other worked on a packing line that has now closed. Explain which worker was made redundant.4 marks
  25. Orla's Laundry has 25 staff who wash and iron hotel sheets by hand. It buys machines that do both jobs. Explain how this could lead to redundancies.4 marks
  26. Marlow Cycles makes bicycles in a factory with 70 workers. A rival's cheaper bicycles have halved its sales. Explain why Marlow Cycles might need to make some workers redundant.4 marks
  27. Dunmore Garage has two mechanics. Falling demand means only one is now needed. Sam is 58, has 15 years' experience and a good record. Jo is 24, has 1 year's experience and is often late. Recommend which mechanic to make redundant. Justify your answer.6 marks
  28. Fenn Telecom has 80 call-centre staff. It plans to make 20 redundant after automating its call answering. Explain one advantage and one disadvantage to Fenn Telecom of making these 20 workers redundant.6 marks
  29. Eastgate Foods packed boxes of tea by hand with four packers. It has bought a packing machine. Only two jobs are left: one worker to run the machine and one to check quality. Anil is 59, has 12 years' experience of packing by hand and a good record. Bea is 34, is trained to run the new machine and has two warnings for lateness. Chen is 23, has 3 months' experience and a good record. Dee is 41, has a good record and is trained in quality checks. Recommend which two packers Eastgate Foods should make redundant. Justify your answer.8 marks
  30. Corran Ferries carries cars to an island. It has 40 deck staff, each paid £1500 a month. New ticket machines now do the work of 10 of them. Passenger numbers have also fallen by 10% this year, but they double every summer. The owner plans to make 20 deck staff redundant. Each would receive a redundancy payment of £6000. Do you think this is the right decision? Justify your answer.12 marks
  31. Orchard Foods employs 50 workers who make jam. Identify two legal controls over employment that might affect Orchard Foods.2 marks
  32. Harlow Taxis dismissed a driver who repeatedly shouted at passengers. Define 'dismissal'.2 marks
  33. Norwood Joinery employs 14 workers. The owner says: 'The law on unfair dismissal means I can never dismiss anyone.' State whether the owner is correct. Give a reason.2 marks
  34. Fenwick Cleaners employs 30 cleaners who use strong chemicals to clean offices at night. Outline two ways legal controls over employment benefit the cleaners.4 marks
  35. Bright Start Nursery has 14 staff and looks after 40 children. A new health and safety law requires all staff to be trained. Outline two ways this law might affect Bright Start Nursery.4 marks
  36. Lowe Garage employs 10 mechanics. It pays them 40 per cent above the legal minimum wage. The government raises the legal minimum wage. A rival garage nearby is advertising for mechanics. Explain two ways the rise might affect Lowe Garage.6 marks
  37. Sefton Print employs 12 printers. One printer repeatedly arrives late for work. A law protects employees against unfair dismissal. Explain one effect of the law on Sefton Print's employees and one effect on its owner.6 marks
  38. Alder Gifts makes candles by hand. It has 22 employees, who are all paid the legal minimum wage. The legal minimum wage rises, and a new health and safety law requires training for all staff. Explain how each of these two legal controls might affect the profit of Alder Gifts.8 marks
  39. Marlow Diving School employs 8 diving instructors, who are paid 60 per cent above the legal minimum wage, and 2 cleaners, who are paid the legal minimum wage. All 10 have worked there since it opened and nobody has ever been dismissed. Three legal controls will change. The legal minimum wage will rise by 10 per cent. Every diving instructor must gain a new safety qualification: the fee is paid once, and each instructor cannot teach for five days. A stronger law will protect employees against unfair dismissal. Recommend which one legal control will have the greatest effect on the profit of Marlow Diving School. Justify your answer.12 marks
  40. Brightwell Call Centre employs 60 call handlers. 45 are paid the legal minimum wage. In busy weeks the call handlers work up to 50 hours. Next year new software will do the work of 10 call handlers, so those 10 job roles will no longer exist. Three legal controls will change. The legal minimum wage will rise. Every contract of employment must set a maximum of 40 working hours a week. A stronger law will protect employees against unfair dismissal. The owner says: 'The dismissal law will have the greatest effect, because I will not be able to remove the 10 job roles.' Do you agree with the owner? Justify your answer.12 marks

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