In this article, our employment solicitors explain what the Fair Work Agency is, the powers it will have, and what this might mean for employers and employees moving forward. 

What is the Fair Work Agency?

The Fair Work Agency will be an executive agency of the Department for Business and Trade, given powers to enforce certain employment rights of workers or employees. 

Its main aims will be to bring together already existing enforcement functions under statute and be a single place for employees or workers to turn for assistance when there is the potential that some of their employment rights have been infringed.

What rights will the Fair Work Agency enforce?

The employment rights that the FWA will look to enforce will be as follows:

• National Minimum Wage;
• Statutory Sick Pay;
• Modern Slavery;
• Holiday Pay; and
• Agency Worker Regulations

Statutory enforcement of these rights is currently undertaken by the Gangmaster and Labour Abuse Authority, the Director of Labour Market Enforcement, the Employment Agency Standards Inspectorate, and HMRC’s National Minimum Wage Unit. 

Along with workers or employees making claims through the Employment Tribunal process, this makes the process of obtaining support potentially more challenging for current workers or employees, and currently some breaches by employers are going unchallenged.

The purpose of bringing the enforcement of all of these rights under one umbrella, the Fair Work Agency, is to make this process more streamlined for workers or employees looking for assistance. 

The FWA also has a focus on supporting employers by resolving issues earlier before they escalate and providing support to employers on following the laws under the Act.

There is provision within the Act for wider employment rights to be included within the remit of the FWA, so there is potential for their powers and what they govern to grow in the future past what rights they are due to be enforcing above.

What powers do the Fair Work Agency have?

The FWA is being granted some further additional powers to enforce the above employment rights by the Act. The full list of powers that the FWA will have is as follows:

• The power to inspect workplaces and require employers to produce relevant documents to evidence compliance with the applicable laws under the Act;
• Civil penalties where enforcement officers are able to issue Notices of Underpayment which require employers to pay workers what they are due and payment of a penalty to the government;
• A civil proceeding power which will allow the FWA to bring proceedings in the employment tribunal on behalf of employees or workers;
• An enforcement regime in respect of labour market criminal offences. This involves voluntary Labour Market Enforcement Undertakings (undertakings to comply with prohibitions, restrictions or requirements stipulated by the Fair Work Agency. and compulsory Labour Market Enforcement Orders (an order which prohibits or restricts certain actions or requires certain actions to be taken).
• A cost recovery scheme which will allow the Secretary of State to set out how the FWA can impose charges on employers who are non-compliant for enforcement costs.
• The power to issue a penalty up to 200% of the sum owed, which would be reduced to 100% if paid within 14 days. The cap of the penalty is at £20,000 per employee or worker.

As per the Employment Rights Act, there is also a new duty on employers to hold holiday pay records for a period of six years to demonstrate their statutory compliance. Failure to do so is now a criminal offence, which is punishable by a fine.

What are the implications of the Fair Work Agency for employers and employees?

The introduction of the Fair Work Agency shows a clear shift from the current government in cracking down on employers who are showing non-compliance and doing nothing about it. The potential fines are extensive, and early commentary is that the FWA is here to make a mark on the employment landscape. 

Workers and employees should have easier access to legal assistance, whether that be advice or representation directly from the FWA, showing that claims being brought by employees or workers, or by the FWA themselves on workers’ or employees’ behalf, are likely to increase substantially.

If you need help with any of the issues raised in this article, specifically if you are an employer who is under a duty to ensure compliance with the laws under the Act or a worker who is of the opinion that your employer is not following their duties under the Act, then please contact a member of our Employment team who will be able to assist you.

At Kitson Boyce, our employment solicitors in Devon are well-versed on the changes introduced by the Employment Rights Act and are on hand to guide you through their implications, both now and in the future. The Employment Rights Act is one of the most significant changes to employment law in decades, so seeking professional advice now is key to ensuring that you are equipped to navigate its implications. 

To speak to a member of our Employment team, please use the contact form on this page, email [email protected], or call us on 01803 202020.