The Employment Rights Bill is bringing in some major changes to how workers are protected, and one of the biggest is the creation of the Fair Work Agency (FWA).
This article is designed to help employers stay ahead of these changes. You’ll learn how this body will be responsible for enforcing a wide range of employment rights, and it’s set to change the way businesses handle things like holiday pay, sick pay, and working conditions.
By preparing now, you can reduce the risk of enforcement action and claims and stay ahead of the changes. If you are looking for help with reviewing your record keeping and processes our employment law solicitors are on hand to ensure you remain legally compliant.
Contents:
What will the Fair Work Agency cover?
The newly created FWA will cover:
- National minimum wage rights (NMW)
- Statutory Sick Pay (SSP)
- Statutory Holiday Pay
- Modern slavery offences
- A new obligation to keep records for 6 years to demonstrate compliance with statutory holiday entitlement, with fines for non-compliance
- Gangmasters licencing
- Rules relating to employment agencies and employment businesses
- Financial penalties for failure to pay sums ordered by an Employment Tribunal or in a an ACAS COT3 agreement.
What powers will the FCA have?
The FWA will be able to:
- Enforce an employer’s failure to comply with the new obligation to keep holiday records
- Enforce failure to pay certain statutory payments to workers – including holiday pay and SSP, based on existing powers to enforce the NMW. The FWA will be able to issue a notice of underpayment to employers, which specifies the amount payable within 28 days. This is combined with a penalty of 200% of the sum due, payable to the Secretary of State
- Bring Employment Tribunal proceedings on behalf of a worker, if the worker has the right to bring a claim but decides not to go ahead themselves
- Provide legal help for employment-related claims, such as helping employees to bring holiday pay claims
- Claim their enforcement costs back from employers who don’t comply. This is new, and it means if you're investigated and found at fault, you could end up covering the FWA’s costs too
- Enter homes with a warrant to obtain documents and check computers
Will the FWA carry out audits or inspections?
Yes, the Fair Work Agency will have broad powers, including the ability to require individuals to attend meetings and answer questions, demand the production of documents or information, enter premises, including private homes, for inspection purposes, access and examine computers, and seize any relevant documents or data.
What kind of business practices could trigger an investigation?
Your business could be subject to investigation if it isn’t paying National Minimum Wage, holiday pay, or statutory sick pay correctly; if it misclassifies employees or workers as self-employed contractors to avoid statutory payments; or if it fails to keep adequate employment records. Sectors including hospitality, care, and construction are more likely to come under scrutiny due to the nature of the work and the staffing models commonly used.
What should employers be doing to prepare?
Holiday entitlement and pay will likely be one area where enforcement action will be aimed at, so make sure your contracts and calculations are up to date and correct, with particular focus on those who work irregular hours and any rolled-up holiday pay calculations. If you don’t already keep records of holiday, SSP, and NMW pay, then you should systems in place to retain these for six years.
Summary
The new Fair Work Agency looks likely to change how employment rights are enforced across the UK. As an employer, you’ll need to demonstrate that you are complying with your legal obligations from the outset. Our specialist employment law solicitors can help you review your current contracts and statutory payments to ensure they are up to date with the latest rules and assist with any questions you may have.
