Fair Work Agency

The Employment Rights Bill will create a new state enforcement agency, which is likely to be called the Fair Work Agency (FWA).

The FWA will combine the current enforcement roles of three separate bodies: HMRC (in relation to the national minimum wage), the Gangmasters and Labour Abuse Authority (in relation to labour exploitation) and the Employment Agency Standards Inspectorate (in relation to agency workers).

It will also take on the powers of the Director of Labour Market Enforcement, which will be subsumed by the new body (for example, the ability to levy financial penalties on employers who fail to pay tribunal awards).

The FWA will have some additional jurisdictions, including in relation to SSP, holiday pay and parts of the Modern Slavery Act 2015. Further jurisdictions may be added to its remit by future regulations, or during the Bill's passage through Parliament.

The FWA will have the power to:

• obtain documents or information
• enter business premises in order to obtain documents or information
• remove and retain documents or information
• request that ‘labour market enforcement undertakings’ are provided, which are undertakings to comply with prohibitions, restrictions or requirements stipulated by the FWA (and which may last for up to two years), and
• apply to court for a ‘labour market enforcement order’ which prohibits or restricts certain actions or requires certain actions to be taken (and which may last for up to two years)

During its Parliamentary passage, the Bill has been amended to strengthen the powers of FWA to:

• Enforce failure to keeping adequate records of annual leave. Employers will be required to keep records of compliance with the Working Time Regulations 1998 on annual leave and pay for six years, with failure to comply punishable as a criminal offence with a fine.
• Enforce failure to pay statutory payments. The Bill has been amended to provide the FWA with powers to issue a notice of underpayment to the employer of non-payment or incorrect payment of any statutory payment (e.g. SSP, holiday pay or the national minimum wage) requiring that they pay the amount due within 28 days. Underpayments may go back 6 years from the date of giving notice and can relate to sums due before the Bill comes into force. The notice can impose a penalty up to a maximum of £20,000 which may be discounted by 50% if sums due are paid within 14 days of the notice, with courts able to enforce a failure to comply with a notice.
• Bring tribunal proceedings on a worker's behalf. Where a worker has a right to bring a tribunal claim, a new power allows the FWA to bring those proceedings in place of the worker, as well as give legal advice or representation in employment, trade union or labour relations cases. There is a provision requiring the employer to pay a charge so that the FWA can recover the enforcement costs.

It’s likely to take at least a couple of years before the FWA is up and running.