The new Fair Work Agency will enforce rights like holiday pay, and provide employers with guidance on how they can comply with the law.
The Agency will combine existing enforcement bodies, including the Gangmasters and Labour Abuse Authority and the Employment Agency Standards Inspectorate.
Matthew Taylor made a recommendation in his review of modern working practices in 2017.
Officers of the new agency will be given inspection powers, and they will also have the power to enforce new sanctions for anyone who violates employee rights. For example, if you fail to pay holiday pay from day one after a sickness or if you do not pay minimum wage. The agency will also act as a listening station for whistleblowers.
The Employment Rights Bill will be a part of its powers, but it will also enforce existing rights such as the National Minimum Wage and certain aspects in the Modern Slavery Act.
In the lead-up to July’s General Election, Labour outlined plans for the agency. The government announced that it would enforce holiday pay for the “first time” as well as strengthen statutory sick leave. It will help create a single, stronger organisation where people can go to get assistance. This includes better support for employers that want to follow the law as well as tougher action against the minority of employers who intentionally flout the law.
Consultation will precede the implementation of this new body. The Employment Rights Bill is expected to come into effect in the autumn of 2026, so the agency must be ready and staffed by that time.
Daniel Pollard is a partner in Charles Russell Speechlys and warned the agency to work efficiently without entangling businesses in redtape. He said that “effective enforcement is needed here, not additional bureaucracy”.
Pollard said that the biggest change in the Bill is the elimination of the unfair dismissal qualification service limit. He stated: “At the moment, a third (of employees) do not have at least two years of service and are therefore unprotected from dismissal. Overnight, the change provides dismissal protection to a third of the workforce. “This is the most radical change in unfair dismissal laws since 1971”
A consultation will be held to determine the level of protection and duration of probationary period for employees.
The Bill will be applicable in England, Wales, and Scotland. Northern Ireland’s employment laws have been in place since 1998, when the Northern Ireland Assembly passed a law.
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