Unit 1Chapters 1,2,3

Business is about ‘people’, not just customers and

suppliers.

On completion (U1)you should be able to;• Listing the main parties in business• Describe the relationship between people as,

workers, TU members, managers, entrepreneurs, invertors and customers

• Outline non-legislative, legislative methods of conflict reslotion

• Outline a major piece of legislation and the elements of contract law that help deal with conflict

• Analyse the relationships between people in bus• Illustrate how legislation affects these relations• Describe a business conflict and how the law

could help solve it

Main Parties/stakeholders in Business• Consumers

• Entrepreneurs

• Investors

• Producers

• Suppliers and service providers

• Employers

• Employees

• Government

• Interest groups (TU)

Entrepreneurs e.g Tony Ryan (ryanair)

• A person who takes the initiative and risk to set up a new business. See a niche in the market for a good/service and use their initiative to create a product/service for that gap. They take the personal risk of failure and the financial risk of loss.

• They bring together the factors of production.– land, labour, capital and enterprise.

• Reward is profit

Producers/Suppliers

• Entrepreneurs who supply the market with finished or nearly finished goods– Producers transform raw materials into products

to sell to consumers– Suppliers supply raw materials and machinery to

producers

• Reward prompt payment and return business

• E.g. Intel supply computer parts to Dell

Service Providers

• Organisations/people who provide a range of valuable services to the public/business e.g.; accountant/banks/esb/transport etc.

• Reward is payment and regular business.

• E.g. ESB supply Dell with electricity

Investors e.g shareholders, banks or

building societies.

• A person willing to put money into a business venture to earn a return on investment (ROI). Would weigh up the pro’s and con’s before making investment.

• They lend money to entrepreneur and are rewarded with interest on loan.

• Employers• A person who hires another person to do work

for them in return for a wage. An entrepreneur becomes an employer when they can no longer run the business on their own. E.g. Ryanair

• Employees• A person contracted to do a particular job in

return for pay. He carries out work the entrepreneur has no time or skills to do themselves . E.g pilots

Consumers

• Person/Business who purchases goods and services from a seller in return for payment. A consumer buys these goods/services for their own personal use, with the expectation of quality and value for money.

• (a customer is different, they do not use the product for their own use, they sell it on to the consumer)

Interest Groups

• An organisation representing a particular body of people who have a common interest. As a group they have more power, money, and talent and are more likely to be listened to by decision makers i.e.: Irish Business and Employers’ Confederation (IBEC)

Trade Union

• A TU is an organisation that negotiates with the employer to improve pay, conditions, etc. for the employees. Employees have more power as a member of a TU as employers will listen to the trade unions rather then one voice.

• A shop steward is elected to be the link between employees and the TU.

The government• Works on behalf of the general public. It wants the firm

to provide employment, goods/services to the public, create wealth, pay taxes and act as a tax collector for VAT and PAYE. Its main aim is to protect the public, so they ensure businesses comply with laws effecting them.

• They also provide assistance through grants, training and advice as well as transport, communications and other infrastructures.

• Eg. Port tunnel means drivers spend less time on the roads

HOMEWORK:

P16, short questions, Q1-6

• Co-Operative

Where the parties work together for their mutual benefit. Less time wasted as they work together. Leads to good industrial relations, it means employees will be more likely to work hard. Overall the business runs smoothly.

Relationships between people in business

• CompetitiveWhere the parties have different objectives. This leads

to better goods/services, although there is rivalry between employees over promotion, between sales reps wanting customers, leads to the closure of inefficient firms. Both parties want what's best for themselves, which might not be what is best for your company e.g. shareholders wanting more dividends which means a reduction in retained earnings, this could hinder expansion plans.

• Dynamic relationships

Where the relationship between two parties changes over time. A person can always change their role within a business.

Competitive, co-operative and dynamic relationship •Between stakeholders, (employers and employees)•Between business and its stakeholders (business and shareholders)•Between two producers in the same line of business e.g. pepsi and coca cola

You can be asked…

• Different objectives (give a little, get a lot)

• Negotiating style (assertive/aggressive)

• Changing circumstances (work methods/economy/management)

Causes of conflict between stakeholders

Conflict resolution

• Non-legislative methods;

• Sit down talk and negotiate

• Use a 3rd party.

• 3rd parites;

• Consumers Association/Trade associations/Ombudsman

• Conciliation/arbitration

Legislative methods

• Consumer has;

The Sale of Goods and Supply of Services Act 1980

Consumer Protection Act 2007

• Employees have;

The Industrial Relations Act 1990, Employment Equality Act 1998, Unfair Dismissals Act 1988.

QUESTIONS

• P17, Long Questions, Q1,2,3,5

Law of contract

1. Offer+acceptance=agreement

2. Consideration

3. Intention to contract

4. Consent to contract

5. Capatity to contract

6. Legality of form

7. Legality of purpose

1. Offer+acceptance=agreement• An offer is when one party makes a proposal to

another. If it is accepted in full by the 2nd party, a legal agreement is made.

• An offer is no longer a offer if it is revoked or rejected. • Any changes to the offer by the 2nd party is considered

to be a counter offer and can be accepted or rejected by 1st.

• They can both be communicated orally, in writing or implied.

• If an offer is not acceped in a certain time frame it lapses

2. Consideration

• Both parties must give something to the other to validate the contact. The thing they offer is the consideration.

• E.g Shopkeeper gives jeans, customer gives money

3. Intention to contract • Both parties must understand and assume the

contract/agreement to be legal from the start.• Bussiness agreement are always legal e.g

business agreeing with suppliers to keep price at the same level, if the price goes up, business still pays low price

• Social agreements are not legal. Eg agreeing to bring food to a friends party is not a vaid contract.

4. Consent to contract

• Both parties must be in honest agreement to make contract valid. i.e. one party cannot force another to enter into a contract.

• Eg holding someone at gunpoint

5. Capacity to contract

You cannot make a legally binding contract if you are•Under 18 •Insane/drunk at the time•A diplomat•Acting in Ultra Vires (acting outside the details of your companies memorandum of association e.g. selling tractors in a shoe shop)

6. Legality of form

Some agreements must be in written form to be made legal.

E.g. a wedding in a church is not legally binding until the wedding licence is signed by both parties.

7. Legality of purpose

The reason for the contract must be a legal one for the contract to be valid.

e.g. you cannot take a taxi company to court for not bringing you to a bank to rob it.

Termination of a contractPFAB

•Performance•Frustration•Agreement•Breach

Remedies for breach of contract•Sue for damages•Resind the contract•Specific performance

The Sale of Goods and Supply of Services Act 1980

Goods for sale should be:•Of merchantable quality

Zip shouldn’t break on coat.•Fit for purpose intended.

wood glue should stick wood•As described.

Hotel should be distance from beach as stated in advertisement

•Confirm to sample.

Paint should be the same as colour on tin

Services for sale should :•Be carried out with care and diligence.•Be done by worker with proper skills and training•Have merchantable quality tools used

Redress

•Depends on how serious the fault is, when and how it occurred, and how soon it was brought to the seller’s attention

•Not entitled to a redress if fault is due to customers misuse or if fault was made known to customer before purchase

•Refund

•Repair

•Replacement

•Credit note (no basis in law, but can be used if the consumer agrees)

Sellers responsibilities…

• Take responsibility for faults and not pass the blame onto the manufacturer

• Not have signs/statements up that take away the customers rights

• Guarauntees*

Other important provisions

• Those buying under hire purchase have all the rights listed above

• Unsolicited goods/inertia selling: when goods are sent to people who don’t order them and a bill is sent to them, the person doesn’t have to pay for the good, and can keep it if its not claimed after six months (it cannot be used in that 6 month period and should be kept in good condition until then)

Offence to..

•Apply a false trade description to goods

•Give false or misleading info regarding the price

•Publish any advertisement which is likely to mislead the public

•Publish or put any misleading signs/notices on display

•False claims by a sales rep.

Consumer Protection Act 2007

Also protects against:

•Usage and owenership

•Aggressive practices/selling

•Pyramid schemes

Functions:

•Promote high standards of legislation and ensure it is being adhered to

•Request the alteration of an advert

•Request the cessation of an advert

•Investigate compliments

•Prosecute offenders

•Inform customers of their rights

National consumer agency/director of consumer affairs

• Monitor the consumer information act

• Monitor EU directives

• Small Claims Court

Customers can take the complaint to the District Court’s Small Claims Court procedure. No solicitors involved.

Industrial Relations

• This is the relationship between employers and employees. It can be good or bad. A good relationship is vital to keep the business running smoothly and efficiently. Employees will be more willing to work hard and employers have more trust in them. When it is bad customers suffer through poor produce and disruption to the service (industrial action)

Causes of industrial disputes

• Claims for better pay and working conditions• Threat of redundancies• Changes in work methods• Discrimination, unfair dismissals, unfair

treatment• Demarcation• Promotion disagreements

The trade union may be brought in to solve these disputes

Trade unions

• A TU is an organisation that negotiate with the employer to improve pay, conditions, etc. for the employees. Employees have more power as a member of a TU as employers will listen to the trade unions rather then one voice.

• A trade union is licenced by the department of Enterprise, Trade and Employment

• E.g SIPTU – services industrial professional technical union. Irelands biggest trade union

• Employees have the right to join any union • A shop steward is elected to liase with the union

on behalf of the employee body• There are many local branches for the larger

unions eg. Meaths branch for TUI. Each branch then makes decisions regarding local issues with permission from head office

• A National Executive runs the whole union from head office and decides on union policies, negotiates on a national level, approves official strikes, and trains negotiators.

Shop steward

• Elected by employees to liase with TU on their behalf

• Negotiate with employer• Inform employees on union activity• Collect subscriptions and recruit new members• Ensure employers keep to agreements

Functions of a trade union• Give workers power• Negotiate• Represent members in a dispute• Protect job security• Provide information of laws to members

BenefitsEmployees

•More power•Skilled negotiators available•Access to employment law through union officials•Access to researchers who find relevant stats for claims

Employers•Simplify negotiations•Discipline is maintained •Provide wage stability•Don’t lose out through strikes

Industrial Action

• Official strike

• Unofficial strike

• All out strike

• Work to rule

• Overtime ban

• Go slow

Parties affected by industrial action

• The firm – business lost

• The employees – wages lost, job security

• Customers – service lost

• Local businesses – business lost

• Public – services lost (bus, doctor, teacher)

• Union – strike pay

• Country – bad reputation

Homework

• Page 48 question 1,2,3

• Page 49 question 1

Unfair dismissals act 1977-2007

• Protects employees aged 16-66, with one years continous service. (The one years continous service does not apply if dismissed for maternity/parental or carers leave or TU membership)

• States the burden of proof is on the employer

Deemed unfair

•Pregnancy

•Race

•Travelling community

•Trade union

•Sexual orientation

•Political/religious belifs

•Age

•Colour

•Taking parental/carers leave

Deemed fair•Misconduct•Incapable•Not suitably qualified•Necessary redundancy

Employees rights•Know the reason for the dismissal and argue the case•Be represented at a hearing

Employee action•Complain to rights commissioner•bring complaint to Employment Appeals Tribunal

Remedies if successful•re-instatement•Financial comp•Re-deployment

Employment Equality Act 1998

• Defines descrimination as « treating one person less favourably than another »

• Covers part-time and full-time employees

• Outlaws 9 grounds as well as harassement, sexual harassement and bullying in the workplace

• Estalished the Equality Authority

Outlaws discrimination on the grounds of:•Gender•Marital and family status•Sexual orientation•Religious belief•Age•Race•Disability•Membership of the travelling community

The law makes it illegal to discriminate:

1. When hiring, training and promoting.

2. In conditions of employment.

3. In advertising for employees.

• The law makes ‘equal pay for equal work’ a legal requirement

• Positive discrimination is allowed to promote equal opportunities.

• The law set up the Equality Authority to:

1. Eliminate Discrimination.

2. Promote equal opportunities.

3. Draw codes of practise.

4. Give public information.

Equality Authority (functions)

• Eliminates discrimination

• Promotes equality

• Informs the public of important laws relating to them

• Ensure legislation is ahered to

• Assist in complaints

Discrimination complaints

Made to Director of Equality Investigations

•Equality Officer - legally binding decision which can be appealed to the labour court.

•Equality Mediator - helps parties reach their own agreement

Director of Equality Tribunal

. Investigate cases of discrimination.

•Evaluation- good as they investigate for free and make sure it doesn’t continue

2. Refer to Equality Mediation Officer if not serious who will try to reach

solution.•Evaluation- good as it is kept confidential.

3. Refer to Equality Officer if it is serious who makes a ruling.•Evaluation- good as case is investigated thoroughly.

4. Director makes final decision in all cases which must be obeyed.•Evaluation- employee can get compensation for suffering and it must be obeyed. A was teacher was awarded money after she didn’t get a job of principal she was a woman in an All boys School.

Industrial Relations Act 1990

This act allows:

•Peaceful Picketing.

•Secondary Picketing.

•Secret Ballots before taking action.

•Strike action to be taken with one weeks notice to employer

•Employer cant: get a court injuction to stop picketing, or sue union or workers for losses

Labour Relations CommissionFunctions of the Labour Relations Commission•To provide conciliation using Industrial Relations Officers.•To provide the services of Rights Commissioners and Equality Officers.•To assist Joint Industrial Councils and Joint Labour Committees.•To set down codes of practice.•To undertake research and publish info for public

Labour Court« court of final appeal »

Functions of the Labour Court

•To investigate disputes (arbitration)

•To recommend settlements.

•To establish Joint Labour Committees.

•To hear Rights Commissioner and Equality officer appeals.

•To interpret codes of practice.

•To register agreements.

Operation of Labour Court

•Chairperson

•Employer representative

•Employee representative

Conflict resolution

Non-legislative•Discussions•Negotiations•Grievance procedure (4 steps)

Legislative •LRC offers IRO (conciliation), RC (arbitration) •DEI offers EM (mediation), EO (arbitration)•Labour court hearing makes recommendation•Employment appeals tribunal makes decision

Pay bargining

• Relativity Claim.

• Cost of Living Claim.

• Comparability Claim.

• Productivity Claim.

• Free Collective Bargaining/Collective Agreement.

• Productivity Bargaining/Productivity Agreement

National Agreements• Social partners negotiate a national pay

agreement (3 year period)

• Increases wages

• Better conditions

• No strikes

• Social welfare

• job creation

• infrastructure

Benefits

•pay stability

•Certanity in future

•Collective barganing

•Inflation control

•Improved IR

•Economic growth

Problems•Small, low paid industries left out •Domination by stronger parties•Easily disrupted by economy

• Refer to past papers for unit one questions (handout)