How do we enforce employment rights further to build a fairer and more inclusive labour market?
Over the past decade the UK labour market has been thriving. Wages have grown at their fastest pace, new record levels of employment have been achieved and new flexible working initiatives have offered workers greater autonomy that ever before (1). In order for the market to continue thriving, it’s important that the relevant legislation is in place to protect individuals.
Through their Industrial Strategy and the Good Work Plan, the Department for Business, Energy and Industrial Strategy have set out their mission to ensure the labour market remains inclusive and supportive of all workers – offering ‘good jobs within a framework that can respond to the changing nature of work’ and that individuals are properly protected by robust legal rights. They recognise however that ‘having the right legal framework’ only goes so far and that the ability to ‘enforce their rights effectively’ is a must.
So, how do we enforce rights further?
Currently, employment tribunals are the main channel through which individuals can enforce their rights, but it’s important to recognise the role of the state in protecting workers from exploitation (1). £33 million is invested annually in state enforcement measures such as National Minimum Wage and National Living Wage, domestic regulations relating to employment agencies, licenses to supply temporary labour in high risks sectors and labour exploitation and modern slavery regulations.
Looking ahead, the Government have committed to doing more to support enforcement – extending ‘state enforcement to cover holiday pay for vulnerable workers’ and announcing a consultation on the case for a new enforcement body (1).
According to the Good Work Plan, the consultation welcomes views on whether a new single enforcement body could deliver:
- extended state enforcement, delivering our commitments to enforce holiday pay for vulnerable workers and regulate umbrella companies operating in the agency worker market
- a strong, recognisable single brand so individuals know where to go for help. In a single organisation we could improve the user journey, making it easier for individuals to raise a complaint and to tackle cases that might currently be handled by different organisations
- better support for businesses to comply with the rules, including coordinated guidance and communications campaigns, and a more easily navigable and proportionate approach to enforcement;
- coordinated enforcement action, with new powers and sanctions to tackle the spectrum of non-compliance, from minor breaches to forced labour and increased focus on high harm cases to disrupt serious, repeated offending
- pooled intelligence and more flexible resourcing enabling greater sharing of intelligence and national tasking and coordination of operational activity targeted at tackling serious breaches
- closer working with other enforcement partners, including immigration enforcement, benefit fraud, health and safety, the Pensions Regulator and wider local authority enforcement (1).
The government are quick to highlight that the consultation is not part of a cost reduction exercise, and that ‘resource for enforcement’ would be maintained, just simply used more effectively (1). On this note, it’s worth highlighting that funding for any new areas (e.g. holiday pay for vulnerable workers) will be considered as part of the Spending Review – and the Government maintain that they are committed to providing adequate funding for employee rights enforcement as part of this (1). So it’s not completely clear cut at this stage but seems that enforcement of employee rights shouldn’t go underfunded.
Not only vetting whether the proposed deliverables of a new single enforcement body would be achievable, the consultation also seeks views more widely on how it would operate in practice. This includes; the core remit of the body, it’s interaction with other enforcement areas, the approach to compliance and the powers it would need to succeed (1).
Any proposal to ‘establish a new government body is subject to the usual approval process’ of course, but it’s important that whatever is decided from this consultation embraces the needs and interests of both employers and employees alike (1). I would welcome NMW compliance moving to a new enforcement body and away from HMRC, but only if this includes a root and branch review of the legislation as well as the guidance so it’s fit for 21st century working practices. At present the legislation penalises low paid employees as much as it protects them, by outlawing their ability to participate in salary sacrifice or to purchase items from net pay. Equally, if holiday pay regulation, and sick pay too potentially, are to be part of the new body’s remit we also need clarity on current legislation and guidance on the 52 week averaging rule that comes in next April.
As always, my advice is to take part – whether you approach it as an employer, agent or employee. It’s important that what comes of this is robust, fit for purpose and builds on the advances made in the past decade. You can find more on the consultation and how to respond here.