New Body For Employment Rights Enforcement Announced
In July 2017, Good Work: The Taylor Review of Modern Working Practices, more popularly known as the Taylor Review was published. Its brief had been to “consider how employment practices need to change in order to keep pace with modern business models" and it made a number of recommendations. One of those was for the establishment of a single watchdog body for employment rights in the UK.
What’s the problem?
It has long been acknowledged that enforcement of employment rights has, for historical reasons, been fragmented and dispersed across a number of bodies and organisations, and this has meant that - for employers - it has been difficult to organise their response to the regulatory regime. For employees, the picture is likely even more confusing. On a strategic level, government has found it hard to gather concise and reliable information on the scale and nature of non-compliance in the labour market.
Following the Taylor report’s recommendation, the government has now announced that the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s National Minimum Wage Enforcement will be combined to create a single enforcement body, although it has not – as yet – been named. It will take over responsibility for tackling modern slavery, the enforcement of the minimum wage and other areas of workers’ rights.
According to the government, the new body will not only combine the remits of the incorporated agencies but will also expand significantly on them. The intention is to improve the enforcement of employee rights but it will also provide both employees and employers with important information on rights and responsibilities.
Minimum Wage enforcement
The new body will continue the scheme, currently operated by HMRC which publicises underpayment of the National Living Wage/Minimum Wage, and can fine employers up to £20,000 per worker if they are found to have breached NMW regulations. This enforcement activity will be extended to cover other regulations protecting the pay of workers employed through agencies or by gangmasters in the agricultural sector.
Action against breaches
Because of the concentration of all three bodies into one new organisation, it is expected that this will result in a more effective compliance system through better co-ordination and pooling of intelligence, with offenders more likely to be identified and prosecuted.
If breaches of the Gangmasters Licensing and Employment Agency standards regime leading to wage arrears occur, civil penalties can be imposed.
The new body also has the power to take enforcement action to guarantee statutory sick pay and holiday pay for workers, circumventing the need for an employment tribunal.
Additionally, the new body will tackle transparency in supply chains, which will include modern slavery reporting.
Employers’ and workers’ rights
The new watchdog will also enhance workers’ rights by providing a single, recognisable point of contact for workers so they know their rights and can ‘blow the whistle’ on bad behaviour.
Alongside these measures, it is intended that there will also be increased enforcement activity to ensure that businesses who are following the rules do not suffer financial harm from companies who are in breach of their legal obligations.
Support for businesses
To make sure that businesses fully understand what is required of them under the new system, guidance will be provided on best practice. The new body will work alongside existing authorities such as ACAS and will make efforts to build links with groups representing workers from different backgrounds and communities – including the low-paid and those in sectors like agriculture and construction who have historically been subject to wage abuse - to ensure everyone is aware of how the new system is intended to support them and what they can do if they encounter non-compliance from employers.
When will the new body be starting?
There is no indication of when the new body will be established as the government has said it will be through primary legislation “when parliamentary time allows.”