A new UK watchdog will be created to combat modern slavery, enforce the minimum wage, and protect agency workers from unscrupulous employers, the Department of Business, Energy and Industrial Strategy has announced.
The government’s plans, confirmed in a consultation response published 8 June, will see the Gangmasters and Labour Abuse Authority, HMRC’s National Minimum Wage Enforcement, and the Employment Agency Standards Inspectorate brought under one roof to create a single enforcement body.
The government says this “one-stop shop” approach will improve enforcement through better coordination and will also enhance workers’ rights by providing a recognisable port of call for workers to whistleblow on bad employer behaviour.
As well as enforcing all existing powers belonging to the three former agencies, the new watchdog will ensure vulnerable workers receive the holiday pay and statutory sick pay they are entitled to without having to resort to the employment tribunal process.
Announcing the plans, business minister Paul Scully MP said: “The vast majority of businesses want to do right by their staff, but there are a minority who seem to think the law doesn’t apply to them. Exploitative practices like modern slavery have no place in society.
“This new workers’ watchdog will help us crack down on any abuses of workers’ rights and take action against companies that turn a blind eye to abuses in their supply chains, while providing a one-stop shop for employees and businesses wanting to understand their rights and obligations.”
The new body will continue a policy of naming and shaming companies that fail to pay workers what they are owed and can hit rogue employers with fines of up to £20,000 per worker. Enforcement activity will be extended to cover other regulations protecting the pay of workers employed through agencies or by gangmasters in the agricultural sector.
Published last month, the “No way out and no way home” report found labour exploitation in the UK was most prevalent in the construction industry last year, as well as within agriculture. Reports of modern slavery involving sexual and criminal exploitation have also risen during the covid-19 pandemic.
Reacting to news of the new agency, Law Society of England and Wales president I. Stephanie Boyce said: “Bad employment practices do not only harm those who work for bad bosses. Responsible businesses, which follow the law, are put at a competitive disadvantage if unscrupulous employers get away with abusing workers.
“Having a single enforcement body should make the reporting of employment law breaches easier as it will be clear to people where to go. An effective enforcement system should provide information to help people and businesses understand their rights and responsibilities, conduct investigations into areas of concern and risk, and punish those who do not abide by employment legislation and regulation.”
Boyce added that the remit, powers, and resources made available by the government to the new watchdog will be key in determining whether or not it can achieve its mission.
The government said it will also explore further measures to target abuses in the garment sector specifically, following reports of serious problems in the industry.
Options being examined include creating a Garment Trade Adjudicator to investigate companies’ supply chains, or extending the licensing scheme that currently covers employers in the agricultural sector.
Under the scheme, businesses who provide workers for agriculture and the fresh produce supply chain must apply for a licence to operate in the sectors, and are subject to inspections to ensure they meet employment standards required by law.
The government also warned that if brands failed to implement the necessary changes to improve their supply chain due diligence, then harsher measures could be introduced, such as bans on goods made in factories where workers have been underpaid.