Despite a bright start from Laws' men, United went into the break 2-0 down thanks to goals from Wes Fogden and Lewis Grabban in the 27th and 30th minute.
The Iron were unable to record a first win in four games as Scunthorpe fell to a 2-1 defeat at the hands of Bournemouth at Glanford Park.
Wedged in between was a missed penalty by Grella in the 29th minute before Scunthorpe got back into the game courtesy of a Hawley penalty midway through the second half.
The Iron made four changes for the match against the Cherries with Karl Hawley, Mike Grella, Damien Mozika and Andy Barcham coming in.
Being replaced for Scunthorpe were injury victims Leon Clarke, Nathan Ellington, Josh Walker whilst David Prutton's loan spell with United ended last week.
Carrying on in the Iron goal was Steve Mildenhall with a defence in front of Christian Ribeiro, Niall Canavan, Mark McChrystal and Tom Newey.
The midfield consisted of Mark Duffy, Mozika, Jimmy Ryan and Barcham, leaving Hawley and Grella up front.
Meanwhile on the bench for the Iron was Sam Slocombe, Callum Kennedy, Robbie Gibbons, Mark Hughes, Michael Collins, Jamie Wootton and Adda Djeziri.
There Hawley caught everyone by surprise by firing first time on the turn bringing out an instinctive save from former England keeper David James at the front post.
The Iron had the first effort on goal in the eighth minute. Some good movement by Grella down the right hand side got him some time to pass inside to Hawley with his back to goal.
Ribeiro had Scunthorpe's next shot on the Bournemouth goal but his long range effort was blasted a few yards over the bar.
The Iron continued their dominance in the 23rd minute when Barcham tested the opposition goal. Barcham picking the ball up on the left cut inside before striking an effort towards James's right hand bottom corner. The experienced keeper though got down well palming the ball away before collected just before the on rushing Hawley.
After initially fantastically clawing out Brett Pitman's header, the ball fell to the feet of Grabban who spun well and slotted the ball through the legs of Mildenhall.
The Iron would rue their missed chances four minutes later when Lewis Grabban gave the visitors the lead.
With the next attack though Scunthorpe had the chance to level when they were awarded a penalty. With Grella looking to get past the defender, the striker flicked the ball up striking the hand of the Cherries defender and with no hesitation pointed to the spot.
Stepping up for the Iron was the man who won the penalty, Grella, who although looking confident produced a tame penalty straight at James to keep Bournemouth in the lead.
But once again the Iron suffered the sucker punch as Wes Fogden's attempted charge of the Iron clearance saw him fortunately deflect the ball into the back of the net for the second goal.
There, once again, Mildenhall produced a fine save scooping the ball away from behind him before the Iron defence attempted to clear.
And things would get even worse from the next Bournemouth attack when Eddie Howe's team made it 2-0. From James' distribution the ball ended up in the Iron penalty box within 30 seconds after a succession of passes.
Hawley had another chance around ten minutes before the break but after once again turning the defender in the box, his shot was blocked by the sliding defender to keep the two goal deficit.
Despite getting excellent contact with the ball though, the Frenchman was foiled by the agile James who rushed out to block his effort from getting one back for the Iron.
James had to be at his best with the first attack of the second half. A good inswinging ball from Ryan found the head of Hawley who nodded the ball down into the path of Mozika around six yards from goal.
Stepping up for United this time was Karl Hawley who this time made no mistake and slotted the ball into James's right hand corner giving the keeper no chance and bringing it back to 2-1.
However the Iron were once again given a chance to get back in the game when the Iron were awarded a second penalty after another handball this time against MacDonald.
Bournemouth made the first change of the game when Josh McQuoid was brought on to replace Marc Pugh.
Scunthorpe made their first change minutes later when Collins replaced Andy Barcham on the left.
Mildenhall kept the Iron in the game with ten minutes to go. After Scunthorpe were hit on the counter the ball fell into the path of Pitman who although not making the best contact with the ball kept his shot on target before the scurrying Mildenhall beat the ball out to keep the Iron in with a shout.
United made their second change shortly after when 17-year-old Jamie Wootton came on for his Iron debut, replacing Mike Grella up front.
Joe Partington was brought on for the visitors in their second change replacing Wes Fogden.
Damien MozikaSponsors' man of the match:
Buchel, Demouge, Tubbs, McDermott, Fletcher.
Substitutes not used:
James, Francis, Cook, Elphick, Daniels, Fogden (Partington 89), MacDonald, O'Kane, Pugh (McQuoid 74), Grabban, Pitman.
Bournemouth:
Slocombe, Kennedy, Gibbons, Hughes.
Substitutes not used:
Mildenhall, Ribeiro, McChrystal, Canavan, Newey, Duffy, Mozika, Ryan (Djeziri 90), Barcham (Collins 76), Grella (Wootton 82), Hawley.
TEAM LINE-UPS
Scunthorpe United:
Adda Djeziri was brought on for the final moments in place of Jimmy Ryan but could not make the difference to bring the Iron on level terms meaning Brian Laws' men have lost the last three games leaving them three points away from safety as they head to Leyton Orient next Saturday.
Damien MozikaIron Bar man of the match:
2,875 (168 away).Attendance: