The government has unveiled plans to merge the existing labour market enforcement bodies, its flagship workers’ rights initiative.
While designed to give the impression of progress, there is little sign that anything will change in the near future.
There is no timetable for the necessary legislation, no promise of badly needed extra funds and overall the plans fall short of the systemic reforms that are needed to make sure workers can enforce their rights, swiftly and effectively.
Urgent action is needed now.
For too many workers, basic workplace rights like the national minimum wage and holiday pay are illusory because there is no effective enforcement.
The latest pre-pandemic data shows that nearly half a million workers are paid less than the national minimum wage, and nearly two million employees miss out on holiday pay.
What did we learn from the government announcement?
No action is being taken now. The government has kicked the can down the road and said that the merger of the Gangmasters and Labour Abuse Authority, the Employment Agency Standard Inspectorate and the HM Revenue and Customs NMW Enforcement team, will take place at an unspecified time in the future.
Despite the new body being tasked with additional responsibilities, including the regulation of umbrella companies and issuing fines for non-compliance with the Modern Slavery Act, no new funding has been confirmed.
The government has ignored recommendations from the previous Director of Labour Market Enforcement to introduce a “joint responsibility” pilot, which would have made large contractors more accountable for poor working practices in their supply chains.
The new body will enforce holiday and sick pay. This is welcome but this enforcement activity should already be happening. The government accepted this recommendation from the Taylor Review of Modern Working Practices in 2018.
The government has announced that the new body will also have new powers to tackle non-compliance, with the introduction of civil penalties for underpayment for the breaches under the gangmasters licensing and employment agency standards regimes that result in wage arrears.
The government announcement has revealed two things.
Firstly, there will be another delay to these reforms being implemented. There is no clear timeframe in the government response.
Secondly, the proposals do not tackle the systemic problems with the enforcement system and will add to the government’s litany of failures in respect to employment rights reform. They have failed to bring forward the promised employment bill in the Queen’s Speech to boost labour rights. And they have failed to appoint a new Director of Labour Market Enforcement, a statutory position responsible for setting the overall strategy for the enforcement bodies.
This decision appears even more reckless now the government has delayed the implementation of the single enforcement body.
TUC Action Plan for the enforcement system
We need better funding of the state-led enforcement system. Long-term, sustained funding would allow enforcement bodies to recruit and train proper workplace inspectors, inspect more workplaces, and prosecute bad bosses who don’t keep their workers safe. There are simply not enough inspectors. For example, there are roughly 40,000 employment agencies operating in the UK, but just 19 EAS inspectors.
Ties between immigration enforcement and employment rights enforcement should be severed. Intelligence sharing and joint investigations are commonplace. This is counterproductive as workers are deterred from making complaints as they fear being referred to immigration enforcement. Joint working should cease and a firewall between immigration enforcement and employment rights enforcement agencies should be established.
We need new, innovative strategies to tackle non-compliance in the labour market. Traditional employment relationships have become fragmented, with business strategies, such as franchising, outsourcing, lengthy supply chains and the use of labour market intermediaries enabling organisations to shirk their employment rights obligations. Large contractors should be liable for breaches of core employment rights in their supply chains.
We also propose that trade unions are granted new rights to access workplaces so they can inform workers about their rights and enforce rights where they’re being breached.
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