The new Fair Work Agency – latest developments and union priorities

A new start for workplace enforcement

The new Fair Work Agency was launched on 7 April into a labour market where many workers still aren’t paid the minimum wage, holiday pay is denied to them and even tribunal awards remain unpaid. 

The agency was established by the Employment Rights Act 2025 (ERA) as the headline reform to the labour market enforcement system.  

Bringing enforcement bodies together

This is the first phase of the changes, bringing together existing enforcement bodies (Gangmasters and Labour Abuse Authority, Employment Agency Standards and the Office for the Director of Labour Market Enforcement). 

National Minimum Wage enforcement (which will be delivered under contract to the FWA by HMRC during 2026/27) is expected to be fully integrated within the FWA by 2027. 

What the Fair Work Agency will do now

The FWA has stated that its immediate priority is “ensuring continued delivery and improvement”. Therefore, for the time being, the enforcement remit will stay the same as it is now – regulating the recruitment agency sector, Gangmasters licensing, tackling serious labour abuse and modern slavery, and National Minimum Wage enforcement (via HMRC until 2027). 

The FWA has set out its early priorities in the Strategic Steer from the Secretary of State for Business and Trade. The first three-year FWA Strategy which will be published in April 2027.  

What’s coming next

In future we expect the enforcement remit, powers and available sanctions to change significantly. 

Over the next year, the FWA will set out how it will address new areas of responsibility (such as holiday pay) and new powers as they come into scope. 

The FWA is also expected to enforce statutory sick pay and regulate exploitative umbrella companies, which are often used by employment agencies to pay and employ workers, in the near future. 

A stronger voice for unions

Importantly, the ERA set out that the new FWA must have an Advisory Board to provide advice to the Secretary of State on labour market enforcement issues. 

The advisory board has nine members, including three trade union representatives (Mike Clancy, Diana Holland and Dave Ward). Union representation in the governance structures is a longstanding union ask to ensure that workers’ priorities are properly addressed in the work of the FWA. 

The FWA is also committed to establishing a Fair Work Agency Assembly to bring stakeholders together to shape, discuss and shape information to tackle the key challenges in the labour market, which could provide another opportunity for union reps and officers to engage with the FWA. 

Why change is needed

Labour market enforcement has not delivered for workers for years. This was summed up by the outgoing Director of Labour Market Enforcement in her concluding statement when she pointed out that 61 per cent of respondents to her latest strategy consultation lacked confidence that the three enforcement bodies deal with cases proactively. 

The opportunity – and the challenges ahead

The creation of the FWA provides a unique opportunity to address systemic issues. 

But, there will be issues that unions will continue to challenge and prioritise going forward:  

• A fresh approach to existing enforcement responsibilities, where there are staggering levels of non-compliance such as refusal to pay employment tribunal awards.
• Ensuring that there is an effective firewall between the FWA and immigration enforcement, to protect vulnerable migrant workers and avoid undermining trust in the new system.
• Ensure that future strategies have a clear focus on improving enforcement outcomes for workers, including benchmarking and clear performance metrics.
• Ensuring that the FWA is adequately funded. It’s welcome that the FWA has a budget of £60.1m, an increase on the combined budget of £47.4m for the predecessor bodies in 2025/26. But this must be kept under review to ensure the new budget enables the FWA to fulfil its expanded remit. The FWA should also trigger and utilise, at the earliest opportunity, its new power to recoup investigation costs from employers who breach the law. 

The Fair Work Agency has an exciting opportunity to be bold, innovative and relentlessly focus on improving enforcement outcomes for workers.