Fair Work Agency welcome but must be resourced properly, say unions and employer bodies

The TUC, REC and CIPD have today (Friday) joined forces to welcome the Fair Work Agency’s “exciting potential” and to call on the government to properly fund and resource it. 

The Fair Work Agency – a single enforcement body set to be introduced by the Employment Rights Bill – will be formed from some key existing enforcement bodies.  

After years of under resourcing, the unions and employer bodies say the Agency presents “an opportunity to create a more effective and progressive enforcement system”. 

The statement comes ahead of the Employment Rights Bill returning to parliament next week. 

On the promise of the Fair Work agency, the joint statement says: 

"It has the potential to make it easier for workers to swiftly and effectively enforce their rights and for rogue employers to be sanctioned, creating a level playing field for the majority of employers who comply with the law. 

“It also has the capability, working closely with Acas, to provide better support to help businesses, particularly smaller firms, meet their legal obligations and improve their people management practices.” 

But the unions and employer bodies warn against “efficiency drives” and say the body must be funded and resourced properly. 

On the need to properly resource the body, the joint statement says: 

“If the Fair Work Agency is to deliver on these objectives it will need additional funding, given that current state enforcement bodies are significantly under-resourced and the body will take on new responsibilities for the enforcement of holiday pay, sick pay and unpaid employment tribunal awards.  

“The Fair Work Agency also needs the remit and resource to keep pace with the changing nature of the world of work - from the use of AI and technology, to emerging issues in the modern labour supply chain, including umbrella and payroll companies.  

“What is clear is that it's vital that the merger of enforcement bodies does not see a drive for efficiency savings given the already-inadequate resources.” 

The joint statement highlights other vital components of our enforcement system, including the Equality and Human Rights Commission and the Health and Safety Executive, as well as the employment tribunal system. 

Years of underfunded enforcement    

The union and employer bodies say that the UK’s broken enforcement system has been failing workers and decent employers who follow the rules.  

According to the organisations, the existing enforcement bodies are inadequately resourced, with the EAS expected to regulate nearly 40,000 agencies with just 18 frontline inspectors.  

The GLAA’s budget has fallen by almost £2m in real terms compared with five years ago, once inflation is factored in. 

The employers and unions say the enforcement bodies need increased resourcing to carry out their existing functions and to meet international benchmarks which suggest there should be one inspector for every 10,000 workers. 

TUC General Secretary Paul Nowak said:  

“No one should find themselves at the hands of an exploitative, rogue employer – unable to properly exercise their rights at work.  

“But for too long, our broken enforcement system has seen bad bosses get away with flagrantly breaking the law.  

“This isn’t right – it fails workers and the many decent employers who play by the rules. 

“That’s why the Fair Work Agency is an exciting opportunity to turn the page on the Tory era of inadequate enforcement. But to fully realise its potential, it is vital the single enforcement body is properly resourced.” 

Kate Shoesmith, REC Deputy Chief Executive, said: 

“The FWA must be empowered with the authority and resources to stay ahead in the fast-evolving world of work, tackling everything from AI and cutting-edge technology to the emerging challenges of the modern labour supply chain, including umbrella and payroll companies. The future of fair work depends on it.” 

Peter Cheese, CIPD CEO, said: 

“The labour market enforcement system is not fit for the raft of proposed new laws given there is strong evidence that existing employment rights already aren’t enforced effectively. 

“Addressing this will require Government to allocate sufficient resources to the Fair Work Agency, as well as the overburdened employment tribunal system and to Acas to boost its ability to provide advice and guidance to SMEs to help them comply with new laws.” 

ENDS 

Notes to editors: 

Full joint statement:  

For too long, the UK’s broken enforcement system has been failing workers and those millions of good employers who follow the rules and treat their staff well.     

Without proper enforcement, workers’ rights risk being illusory and efforts to raise overall employment standards will be undermined. 

The Fair Work Agency – a single enforcement body set to be introduced by the Employment Rights Bill which will merge some key existing enforcement bodies - provides an opportunity to create a more effective and progressive enforcement system. 

It has the potential to make it easier for workers to swiftly and effectively enforce their rights and for rogue employers to be sanctioned, creating a level playing field for the majority of employers who comply with the law. 

It also has the capability, working closely with Acas, to provide better support to help businesses, particularly smaller firms, meet their legal obligations and improve their people management practices. 

However if the Fair Work Agency is to deliver on these objectives it will need additional funding, given that current state enforcement bodies are significantly under-resourced and the body will take on new responsibilities for the enforcement of holiday pay, sick pay and unpaid employment tribunal awards. The Fair Work Agency also needs the remit and resource to keep pace with the changing nature of the world of work - from the use of AI and technology, to emerging issues in the modern labour supply chain, including umbrella and payroll companies. 

What is clear is that it's vital that the merger of enforcement bodies does not see a drive for efficiency savings given the already-inadequate resources.   

It is also important to recognise that the Fair Work Agency is just one piece of the enforcement jigsaw. Other vital components include other agencies outside its direct remit, including the Equality and Human Rights Commission and the Health and Safety Executive, as well as the employment tribunal system. 

Therefore, increased funding for the single enforcement body must go hand in hand with reforms to the wider labour market enforcement system. These include tackling the employment tribunal case backlog, including with improved financing, and supporting Acas with the necessary resources to effectively resolve disputes and provide advice and guidance to employers to help prevent non-compliance.  

The new single enforcement body is an exciting opportunity to address the major flaws in our labour market enforcement system – but it will need sufficient resources and funding to properly realise its potential.