When Labour’s Plan to Make Work Pay included a pledge to create a single enforcement body for employment rights, it constituted one of the party’s less eye-catching proposals for reform. However, as the role of the ‘Fair Work Agency’ (as it will be called) begins to take shape under the provisions of the Employment Rights Bill, what is emerging is significantly more striking than might have initially been thought. The Amendment Paper, published last week, includes significant strides to increase the Fair Work Agency’s role. In particular, it will be able to:

  • Bring Employment Tribunal claims on behalf of a worker if the worker has the right to make a claim but chooses not to.
  • Offer claimants legal assistance for employment cases, with the cost of this being recoverable from the other side should the claim be successful. 
  • Enforce failure to keep adequate records of holiday pay for six years – through prosecution and potentially unlimited fines. 
  • Enforce failure to pay some statutory payments including holiday pay and sick pay by issuing a notice of underpayment. The amount payable in the notice must be paid within 28 days, alongside a penalty payment which must be paid direct to the government. This proposal would bring these statutory entitlements in line with the regime which is already in place to cover national minimum wage.  

These are all government amendments, which means they have a good chance of making their way into the final Bill. The implications for employers are potentially huge.

It could fundamentally alter the dynamics of employment litigation in the areas covered by it. For example, an employer hoping to rely on worker loyalty or indifference to keep claims at bay may find that the FWA, seeing a worker’s reticence to claim, simply brings the claim itself. The commercial considerations involved in defending a tribunal claim where the FWA is involved will need to include the additional risk of having to pay the FWA’s costs.

It is early days, and we are a long way off these proposals taking effect. Their eventual impact is likely to be largely dependent on the level of funding and resourcing which the FWA is given to realise its powers.