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Labour market enforcement: How Wales can lead on reforming a broken system

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Labour market enforcement is criminally under-resourced and is largely ignored in political debate. And yet it is critical to a fair and decent labour market. If the Welsh Government wants to make progress towards making Wales a Fair Work nation then it has to address the failure to enforce rights at work.

Systemic underfunding means that tens of thousands of workers in Wales are denied their basic employment rights and work in unsafe conditions. Last year the HSE recorded 31,000 non-fatal injuries in workplaces, and 70,000 people suffering from work-related ill health. 16 fatal injuries were recorded. 

We have even less of an insight into non-compliance in relation to things like minimum pay and time off. Using 2019 figures, an estimated 1.4% of workers in Wales (around 20,000 people) are paid below the minimum wage.  But it is extremely high for certain areas where the state plays a key role, like apprentices. For some age categories, around a third of apprentices receive illegal levels of pay.

Due to the complex nature of employment rights, many workers (and managers) are unaware that they are subject to illegal practices (this is a good account of this phenomenon in the hotel industry).

Once you start to look into it then you realise what a pandora’s box labour market enforcement really is. The UK Government has so far failed to put forward a plan for meaningful reform or investment.

But with a new Welsh Government committed to campaigning to devolve the HSE and the experience of the last year, perhaps we’re ready to design a much bolder enforcement regime for Wales with workers at the centre.

Joining up the (agency) dots

A new report published by the TUC gives an excellent overview of the various agencies responsible for labour market enforcement, as well as the many downfalls which have resulted in a labour market where exploitation is rife and even basic rights are illusory.

It is one of many areas where key levers like health and safety law aren’t devolved, but it has huge implications for our well-being and areas of devolved responsibility like public health.

In our submission to the Fair Work Commission in 2018 we called for the Welsh Government to coordinate the work of devolved and non-devolved agencies working on labour exploitation. We saw an opportunity to build on the role of the Anti-Slavery Co-ordinator, who was working to add value (and values) to the work to tackle modern slavery, the most extreme form of labour exploitation. We were interested in extending this model to address all forms of labour exploitation, and to create stronger working between devolved and non-devolved agencies and build on the idea of a victim-centred approach which was being developed in Wales.

The goal was to create a Welsh approach to enforcement where everyone understood how to seek redress, where employers felt like they couldn’t get away with illegal employment practices, and where any workers impacted by enforcement activity were supported and aware of their rights.

We revisited this idea when the pandemic hit as Welsh Government suddenly had the power to regulate over workplace health and safety.

After the Welsh Government introduced the 2m law, we became increasingly concerned about how it was being enforced (the law stipulates that local authority environmental health officers and the police are the enforcement bodies). We also struggled to find any information about how local authorities were responding to the crisis in relation to their workplace health and safety remit, and how workers are supported when their workplace is closed under Welsh coronavirus laws. It led to the creation of the Health and Safety Forum to bring unions, employers, government and enforcement agencies around the table - including the HSE.  

What difference has it made?

The Health and Safety Forum should be an example of how social partnership can work: where government (including its agencies), unions and employers work together to reach more equitable outcomes for all sides. It has proved helpful for concentrating minds on workplace health and safety, and resulted in government responding through measures such as putting the requirement to undertake a covid risk assessment in law.

But it has been less successful in establishing a shared agenda. In a context defined by a low likelihood of a health and safety inspection the incentive is often to retain the status quo. There are issues in relation to capacity – local government environmental health teams have been hollowed out. And there is also perhaps an issue with positioning. Health and safety still carries the baggage of ‘red tape,’ and perhaps a misplaced fear that talking about enforcement is somehow anti-business.  

For example, we have shared the findings of repeated rounds of polling which showed that only around a quarter of employers have been fully complying with the coronavirus risk assessment regulations, and fewer than half of employers have done a covid-19 risk assessment. The forum has given us a space in which to raise this, Welsh Government has responded by tightening legislation, but we still are not at the point where action has been taken to meaningfully enforce the rules. Our data suggests a largely unchanged picture on enforcement over the last 7 months.  

Will devolving the HSE help?

Welsh Labour’s manifesto includes a really interesting commitment to “campaign for the under-funded Health and Safety Executive to be devolved to Wales and we will manage it properly.”

The HSE is the UK government agency responsible for regulating workplace health and safety. Its role is complex. It enforces health and safety law set by the UK parliament, but it also has a role in shaping regulation and monitoring. It will be interesting to see if the ambition to devolve the agency also includes a push to devolve the power to legislate on the areas it is responsible for enforcing.

And with a government committed to social partnership and growing trade unions, this could also be a very important step towards achieving that vision of a worker-focussed enforcement regime. But this can only happen if Welsh Government reflects on the TUC’s recommendations.

First, the funding issue is real. Both the HSE and local government need more inspectors, long-term resources commitments and need to be able to take a more pro-active approach to inspection and enforcement. As a minimum, a devolved HSE must reach the ILO benchmark of at least one inspector for every 10,000 workers if we are to start to chip away at widespread non-compliance.

Second, devolving this key agency must be taken as an opportunity to sever the link between workplace inspection and immigration enforcement. Over the last decade the UK government has strengthened links between labour and immigration enforcement, undermining trust in a system for groups of workers who are at greater risk of exploitation. In a nation of sanctuary, this must be severed, and Welsh Government needs to restore trust in labour enforcement agencies so that workers understand that they are on their side.

Third, the HSE, local government and other actors (like Public Health Wales, who seem to be increasingly taking a role in workplaces) need to recognise the state our labour market is in and be especially mindful of the fragmented nature of worker/employer relations in many industries. Close working with trade unions is critical here, especially as within our devolved public sector there is often a very limited understanding of the labour market and labour exploitation because of the nature of our devolution settlement.

And a final (very traditional Wales TUC) ask is that devolving the HSE is part of a wider approach to bring meaningful social partnership working to this agenda. Social partnership isn’t just about sharing views and experiences. That’s consultation. Social partnership is working together to find solutions that produce the best outcomes for all sides. Non-compliance with health and safety law (and all other forms of labour exploitation) harms people and usually transfers the cost to the state.

Both unions and government need to make it clear to employers that the status quo isn’t good enough, and they can either have a say on a more ambitious, devolved HSE or not – it’s happening either way.