Labour’s new watchdog for workers will need real teeth, business warns

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The UK’s push to upgrade workers’ rights will fail unless ministers ensure its new enforcement body has the powers and resources to enforce the rules, business groups are warning ministers.

The government must publish details of sweeping reforms to employment law next week if it is to hit its deadline to introduce a draft bill within 100 days of taking office.

But business groups and unions are worried the rules could end up pushing workers into less regulated corners of the labour market unless ministers take early action to strengthen the UK’s patchy, thinly resourced enforcement system.

“If you’re going to pass a law you have to enforce it — or companies who play by the rules lose out,” said Neil Carberry, chief executive of the Recruitment & Employment Confederation, a trade body.

“It really matters to get enforcement right. You can’t have it as an afterthought,” he added.

Key measures in Labour’s package of reforms — billed as “The Plan to Make Work Pay”— include restrictions on the use of zero-hour contracts, protection against unfair dismissal from the first day in a job, a default right to flexible working and a “right to switch off” outside working hours.

The legislation will also pave the way for the government to bring existing enforcement bodies — including the Gangmasters and Labour Abuse Authority (GLLA), the Employment Agency Standards Inspectorate and the HM Revenue & Customs team that polices the minimum wage — into a new single body called the “Fair Work Agency”.

The agency will have “strong powers to inspect workplaces and take action against exploitation” and be able to bring civil proceedings to uphold workers’ rights, Labour has promised.

But it remains unclear what the remit and powers of the new body will be, and whether it will have the resources needed to expand its role.

The British Retail Consortium wrote to the employment minister, Justin Madders, this week, calling for the FWA to have “the appropriate scope, powers, resourcing and form” to achieve its aims.

The retailers’ group is concerned the GLAA — which focuses on tackling exploitation and modern slavery in high risk sectors, such as farming the textiles industry — might have weaker powers as part of the new body than it does currently.

It was “critical” for the FWA to retain and expand its existing powers to investigate and prosecute both modern slavery and offences falling below that threshold, the BRC said.

It should also gain new powers to police the recruitment of migrant farm workers and inspect the farms hosting them, the group added.

Meanwhile, other business groups worry that the culture of the GLAA — whose staff often have a background in policing — would be inappropriate in other, more technical areas of the FWA’s work.

“In some areas, what you need is a police officer kicking down a door . . . There are other areas where what you need is a precise and deep understanding of the working of an industry,” Carberry said.

There was a risk, if the FWA used “a moderate-sized stick on everybody”, that it would alienate compliant businesses while “failing to use a really big stick on the areas that need it,” he said.

The UK has less than half the number of workplace inspectors it would need to meet international standards and delays of up to two years to bring a claim to an employment tribunal mean workers often have no effective route to redress.

The Department for Business and Trade said: “We will ensure that the Fair Work Agency has the funding and powers it needs to take tough action on the minority of businesses that flout the law and effectively enforce employment rights.”