We take a look at The Fair Work Agency and what actions it will have the power to take against recalcitrant employers.
In one of the most transformative proposals set out in the Employment Rights Bill, the government outlines plans to bolster employment law protections by creating a single enforcement body with significant investigatory and enforcement powers. The aim is to create a body with a “strong, recognisable single brand”.
The Fair Work Agency (the FWA) will take over the roles of both the Gangmaster and Labour Abuse Authority and the Director of Labour Market Enforcement which are currently responsible for modern slavery and illegal / immigration work issues.
In addition, it will also deal with inspection and enforcement of workplace matters such as:
- Employment agency rules
- Statutory Sick Pay
- Failure to pay compensation orders or settlement sums
- National Minimum Wage
- Working Time Regulations including holiday pay / leave
Inspecting and Investigating
In order to fulfil their role of investigating breaches of relevant “labour market laws”, the FWA’s Enforcement Officers (EO) will be empowered to:
- Enter business premises; and
- Require production of documents and have access to computers or other equipment storing docs or information; and
- Inspect, examine, obtain, seize and retain documents or information.
These entry / search / seizure powers are similar to those currently available under the modern slavery provisions of the Gangmasters (Licensing) Act and will be supplemented by similar powers under the Police and Criminal Evidence Act.
Enforcement – undertakings and orders
The FWA’s enforcement powers begin with Labour Market Enforcement (LME) undertakings. Where an EO finds an infringement of relevant laws, they will give notice to the employer of the alleged breaches and invite them to give specified undertakings designed to remedy the issues. The employer will then have 14 days (or more if the officer agrees to allow longer) to give the undertakings required.
LME undertakings allow officers to take measures such as prohibiting or restricting the employer’s actions or activities; or requiring them to do something in order to be compliant with relevant legal obligations. They can remain in place for a maximum of two years.
If an employer refuses to give the undertakings required or gives them but then fails to adhere to them, the FWA can apply to the Magistrates court (the Sheriff in Scotland or Court of Summary Jurisdiction in Northern Ireland) for an LME order requiring the employer to comply with the measures the FWA has sought in the previous voluntary stage.
Appeals against an LME order can be made by the employer to the Crown Court (or Sherriff Appeal Court in Scotland or county court in Northern Ireland).
Offences and Penalties
The proposals are not a toothless tiger. Failure to comply with an LME is set to be a criminal offence punishable by Magistrates’ level fines and / or prison sentences of up to 2 years for the most serious offences. Anyone providing false information or documents to the FWA, or obstructing its work could be liable for up to 51 weeks in prison and / or a fine.
In corporate bodies, culpable directors, managers, corporate secretaries, partners or members are potentially personally liable and punishable.
Comment
This proposal is significant as it will potentially change the employment landscape, providing a state-backed enforcement agency with, it seems, sufficient power to act as a meaningful deterrent for unscrupulous or careless employers. It will require significant investment and resources and many await further details with interest.
It will not escape employers’ notice that the FWA potentially provides an avenue for employees to raise matters of non-compliant practices without needing to address the employer directly, or personally bring employment tribunal proceedings against their employer.
Practical issues and concerns are likely to be flushed out during the forthcoming consultation stage and progression of the Bill through Parliament, but a downturn in employment tribunal cases could, in turn, have a beneficial impact on employment tribunal capacity and waiting times for other cases.
See our previous ERB Insights in this series
- Overview: ERB What’s In, What’s Out, What’s Next? (11 October 2024)
- ERB: Flexible Working: Further Flexion (21 October 2024)
- ERB: Day 1 right to claim unfair dismissal (25 October 2024)
- ERB: The Pendulum Swings on Industrial Relations (8 November 2024)
If you'd like further advice on aspects of the Fair Work Agency, please contact our employment law solicitors.
