Enforcement

Most tribunal claims must be brought within three months of the alleged offence whether that be dismissal, discrimination or deduction of wages etc.

The Government announced as an amendment to the ERB in November 2024, that it will extend those time limits to six months for all tribunal claims.

We are unsure when those changes will take effect; the Government has given no indication of when this change is likely provided the amendment is accepted and after ERB has received Royal Assent.

The state itself has very limited power to enforce employment rights, it is the individual employee/worker who must enforce their rights under the various pieces of legislation.

The ERB introduces a new state enforcement agency – likely to be called the Fair Work Agency. The intention behind this is to provide a single place where workers and employers go for help.

This agency will cover the following specific areas:
– rules on employment agencies and employment businesses;
– National Minimum Wage rights – including entitlement to the Minimum Wage and record keeping requirements;
– modern slavery offences;
– Statutory Sick Pay;
– holiday pay – including the right to payment for holiday and rolled up holiday pay for part year and irregular hours workers;
– gangmasters licensing; and
– failure to pay sums ordered by a tribunal in a COT3 agreement.

Many of these are already covered by existing enforcement agencies e.g. HMRC enforce the National Minimum Wage. However, this will combine the Employment Agency Standards Inspectorate, HMRC’s National Minimum Wage enforcement team and the Gangmasters and Labour Abuse Authority (addresses modern slavery). The notable inclusion is the enforcement of rights to holiday pay – currently only employees and worker can bring such claims.

The ERB also gives the power to add to the list of rights that can be enforced by the new Fair Work Agency. One of these areas could be discrimination but at this stage it’s difficult to see how state enforcement of those rights would fit with the existing role of the EHRC.

The Government are keen that this new agency has sufficient powers to make a difference. An advisory board, consisting of equal numbers of representatives from trade unions, employers and independent experts, will be established to advise the Government regards the enforcement of legislation.

The Secretary of State will be required to publish a labour market enforcement strategy at the start of each three-year period and lay this before Parliament. This must set out the scale and nature of non-compliance with the relevant labour market legislation over the previous three years. This will be accompanied by a proposal as to how the enforcement functions are to be exercised going forward.

The powers of the Fair Work Agency will be serious and will mean that the need for employers to keep careful records will be heightened. The agency will be able to require individuals to attend meetings and answer questions and provide documentation where the agency reasonably believes that it would assist the enforcement of labour market legislation. Enforcement officers will have the power to enter any business premises to inspect any documents – this includes non-business premises (but only with a warrant) and includes the power to require that any document stored electronically be provided in a form that can be taken away.

The agency may issue Labour Market Enforcement Undertakings. Where it is believed that a person is committing a labour market offence e.g. breaching any requirement under the relevant legislation, the agency may issue a notice identifying the offence and inviting the relevant person to give an undertaking to comply with the relevant legislation going forward. These undertakings can last for no longer than two years but could be discharged earlier.

It is unlikely that the agency will be set up and active before the end of 2026.