Single Enforcement Body: Will the Tories boldly go where Labour and the Lib Dems failed to tread?

In July, the Government launched a formal, 12-week consultation on a proposal to establish a new Single Enforcement Body for employment rights. You might even have submitted a response (the consultation closed yesterday). And you probably concluded that it is just some dastardly Tory plan to slash the resources of the existing enforcement bodies. But how well do you know your (ancient) history?

Between 2000 and 2013, while working as employment policy officer at Citizens Advice, I researched and wrote a deadly boring series of policy reports arguing for a consolidation of the three main labour market enforcement bodies – the HMRC minimum wage enforcement team, the Employment Agency Standards Inspectorate (EASI), and the Gangmaster Licensing Authority (GLA) – into a single Fair Employment Agency fit for the 21st century, with the legal powers and resources to “root out the rogues” without imposing unnecessary regulatory burden on the great majority of compliant employers.

In the reports – and in any number of shorter articles, submissions to parliamentary committees, campaign leaflets, and conference presentations – I noted that, all too often, vulnerable workers are too fearful of further victimisation or dismissal to issue an employment tribunal claim, the principal means of enforcing most statutory workplace rights. And, as a result, rogue employers can profit from exploitation with near impunity. In 2005, for example, I noted that:

These workers tend to have a poor understanding of their statutory rights, and little if any awareness of how to assert or enforce them. Most are low skilled and low paid, and are employed in small, non-unionised workplaces. As a result, they are extremely vulnerable both to deliberate abuse by a ‘rogue’ or criminally exploitative employer, and to inadvertent non-compliance by an overstretched or inadequately informed employer.

Many small employers, especially those in low-profitability sectors of the economy, simply lack the means and resources – specialist, in-house human resources staff, for example – to keep fully abreast of their legal obligations to their workforce. Government-funded research by Kingston University confirms that most small employers are “not confident about their knowledge of individual employment rights”, due both to the common lack of “an in-house personnel function” and to the fact that many such employers deal with employment rights on “a need-to-know basis” only – that is, only when a particular situation arises. In short, the demands of running a small business in an increasingly competitive economic environment all too often lead to inadvertent non-compliance with statutory employment rights.

I suggested replacing this fragmented enforcement architecture with a “more joined-up system of advice, guidance and practical business support for small, low-profitability employers, and a more pro-active approach to compliance and, where necessary, enforcement” through a single enforcement body – or Fair Employment Agency.

From the outset, my proposal was firmly opposed by the Great Protector of workers’ rights, the TUC. Enforcing workers’ rights is a job for trade unions, not government, I was told. And union membership was now growing so rapidly that all workers would be unionised by the 26th century. Well, all workers in whatever remained of the public sector in the 26th century, anyway.

However, as few if any of the tens of thousands of vulnerable, exploited workers seeking employment-related advice from what were then known as Citizens Advice Bureaux would live to cheer the arrival of the TUC’s cavalry, I plodded on. Occasionally, I would win over a key public policy actor – the then Equal Opportunities Commission, the Institute for Public Policy Research, the trade union Unison – only to watch them get nobbled by the more influential (and much better resourced) brothers and sisters at the TUC.

Then, in early 2006, the Labour government became interested, announcing – in a DTI policy document, Protecting vulnerable workers, supporting good employers – that “we need to ensure that vulnerable workers are not mistreated but get the rights they are entitled to.” Policy officials at the DTI (or was it BERR by then?) made encouraging noises. And in 2007 I was invited to join a Vulnerable Worker Enforcement Forum, chaired by the employment relations minister. This included senior officials from the enforcement bodies, as well as officials from each of their sponsoring departments, and my friends and admirers at the TUC were there to ensure nothing significant ensued.

Sure enough, when the Forum concluded in August 2008, having decided to do little more than create a single telephone gateway to the various enforcement bodies – the Pay & Work Rights Helpline, since abandoned and rolled-up into the Acas Helpline – the then minister, Pat McFadden MP, told me that, while he agreed a single enforcement body/Fair Employment Agency was “a great idea”, he couldn’t be arsed with all the inter-departmental wrangling that would be involved in setting one up. (To be fair to Pat, what he actually said was “Gordon Brown won’t let me [because the TUC have told him not to], and I can’t spend another two years arguing with him.”)

Fast forward to 2011, when (I’m told) the Coalition’s first employment relations minister, Liberal Democrat MP Ed Davey, used to wave a crumpled copy of my last report for Citizens Advice on the issue at officials and demand to know “what we are doing about this”. ‘Not a lot’ seems to have been the answer, and in July 2012 a ministerial review of “the existing workplace rights compliance and enforcement arrangements, to establish the scope for streamlining them and making them more effective” quietly concluded that a single agency “would not provide significant benefits to workers.”

Noting that “the Government’s existing workplace rights compliance and enforcement arrangements are not those that someone starting now, with a blank sheet of paper, would devise”, and that “denial of paid holiday (or owed holiday pay) affects many more workers than denial of each of the rights that are covered by [the existing] enforcement bodies”, that 2011 report of mine waved by Ed Davey – Give us a break!, which was endorsed by the Child Poverty Action Group, the Fawcett Society, Gingerbread, Homeworkers Worldwide, the Law Centres Federation, Legal Action Group, Maternity Action, Oxfam, and Working Families – concluded that:

Through the application of a proactive, intelligence-led and proportionate approach to the enforcement of all those statutory workplace rights that are amenable to such an approach, including the right to paid holiday, a single Fair Employment Agency would simplify the enforcement framework and enhance the protection of vulnerable workers.

But it would also provide better value to the taxpayer, both through greater organisational efficiency and by reducing the number of potential employment tribunal claims. And, by targeting the rogues who profit from exploitation, it would help secure the fair competitive environment – or ‘level playing field’ – that is quite rightly sought by good employers, employment agencies and labour providers.

And, despite the negative outcome of the 2012 ministerial review, the idea clearly stuck around in someone’s head, because in October 2014, at the Liberal Democrat conference in Glasgow, then business secretary Vince Cable MP announced that his party’s manifesto for the 2015 general election would promise a new Workers’ Rights Agency, to “revamp efforts to enforce employment law and tackle the exploitation of workers” by combining the remits of “the minimum wage enforcement section of HMRC, the working time directive section at the Health & Safety Executive, the BIS Employment Agency Standards Inspectorate, and the GLA.” According to Cable, this “joined-up enforcement approach” would “ensure the minority of unscrupulous employers who break the law do not get away with undercutting other employers who play by the rules.” So, there would be significant benefits to workers after all.

In the event, Cable’s Workers’ Rights Agency didn’t make it into his party’s mahoosive, 160-page manifesto, though when asked about this his then junior minister, Jo Swinson, tweeted “the idea’s still there.” By which Ms Swinson appears to have meant ‘the idea’s now been stolen by the Tories.’ For, while the Tory election manifesto was as silent on the idea as those of the Liberal Democrats and Ed Miliband’s pathetically timid Labour, within a few weeks of his Nick Clegg-free return to Downing Street, in May 2015, David Cameron announced the creation of “a new enforcement agency that cracks down on the worst cases of exploitation.”

Evidently, not everyone in Cameron’s new government had got the memo, because all that came of this announcement was the creation – under Part 1 of the Immigration Act 2015 of all things – of “a new statutory Director of Labour Market Enforcement, responsible for providing a central hub of intelligence and facilitating the flexible allocation of resources” between “enforcement of the national minimum wage by HMRC, the regulation of employment agencies by [EASI] and the licensing of legitimate labour providers by the GLA.” And, in January 2017, Professor Sir David Metcalf, formerly chair of the Migration Advisory Committee, was named as the first holder of the post, charged with drawing up “an annual strategy targeting sectors and regions which are vulnerable to unscrupulous employment practices”.

Sir David published his first annual strategy in May 2018. This noted that

Employment rights are now predominantly enforced on an individual rather than a collective basis, following the decline in union membership and collective bargaining coverage. Yet the evidence suggests that awareness levels amongst workers and employers of rights, responsibilities and public enforcement are relatively low. The lack of knowledge and confidence to report issues, and consequently the vulnerability of workers, is not surprising given the complexity of different rights and employment statuses, combined with a fragmented enforcement landscape.

Sound familiar? Whatever, by this time, Theresa May had replaced the hapless David Cameron as prime minister, and in September 2016 had recruited the former head of Tony Blair’s policy unit, Matthew Taylor, to lead a review of workers’ rights and “modern working practices”. And, in July 2017, the report of the Taylor Review of Modern Working Practices concluded that “HMRC should take responsibility for enforcing the basic set of core pay rights that apply to all workers – NMW, sick pay and holiday pay – for the lowest paid workers”. And “going forward, the Government should consider whether other pay-based protections, such as protection against unlawful deduction from salary [i.e. ‘wage theft’ by employers], are also state enforced for the lowest paid workers”.

In December 2017, a research report by Middlesex University Business School, Unpaid Britain: wage default in the British labour market, concluded that at least two million workers experience non-payment of wages or holiday pay each year, and that those unpaid wages amount to at least £1.3 billion, and the unpaid holiday pay to at least £1.8 billion.

So far, so good, and in December 2018, in its response to the Taylor Review, the Government set out its “intention to enforce a wider range of basic employment rights on behalf of the most vulnerable workers”:

The government accepts the case for the state taking responsibility for enforcing [sick pay and holiday pay, as well as the NMW] on behalf of the most vulnerable workers. We will consult to gather detailed evidence of the scale and distribution of non-compliance with holiday pay and statutory sick pay obligations, and then evaluate the best way to target enforcement activity, remaining mindful of the need to minimise burdens on compliant businesses and ensure that enforcement activity is cost effective.

And, true to its word (for once), in July 2019 – just days before Theresa May was forced from office by her miserable but perhaps inevitable failure to ‘sort’ Brexit – the Government launched a formal, 12-week consultation on a proposal to establish “a new, single enforcement body” and whether this could deliver:

      • extended state enforcement, delivering our commitments to enforce holiday pay for vulnerable workers and regulate umbrella companies operating in the agency worker market;
      • a strong, recognisable single brand so individuals know where to go for help. In a single organisation we could improve the user journey, making it easier for individuals to raise a complaint and to tackle cases that might currently be handled by different organisations;
      • better support for businesses to comply with the rules, including coordinated guidance and communications campaigns, and a more easily navigable and proportionate approach to enforcement;
      • coordinated enforcement action, with new powers and sanctions to tackle the spectrum of non-compliance, from minor breaches to forced labour and increased focus on ‘high harm’ cases to disrupt serious, repeated offending; and
      • pooled intelligence and more flexible resourcing, enabling greater sharing of intelligence and national tasking and coordination of operational activity targeted at tackling serious breaches.

Launching the consultation, then business secretary Greg Clark (since departed) stated:

We have a labour market that we can be proud of with more people in work than ever before. But it’s right that hard-working people see their rights upgraded and are protected from exploitative practices, whilst ensuring we create a level playing field for the vast majority of businesses who comply with employment laws.

A new Single Labour Market Enforcement body will bring together our different enforcement partners, putting all our expertise in one dedicated place, better protecting workers and enforcing their rights now and into the future.

Sound familiar? And, responding to the initiative, Peter Cheese, chief executive of the CIPD, said:

The creation of a single enforcement body is an important step towards achieving better working lives for the UK’s most vulnerable workers. We welcome the government’s proposals and the recognition that tougher enforcement needs to go hand in hand with better support for businesses, many of which can fall foul of employment legislation unwittingly.

However, not everyone is being so welcoming. While I’ve yet to see their response, I understand that my friends at the TUC are no more enlightened than they were 15 years ago, and are opposing the proposal. And, while agreeing that “currently in the UK, we have multiple enforcement bodies, each with differing names, remits, access points, etc., [which] creates a complex, fragmented and confusing picture for workers seeking support for abuses and for employers trying to understand their responsibilities”, FLEX (Focus on Labour Exploitation) has given the proposal only conditional and somewhat unenthusiastic support.

Sure, a single enforcement body wouldn’t be a panacea. Nothing would. But it’s clear from the (long) history above that the current consultation isn’t some dastardly wheeze conjured up by the latest set of Tory ministers and their advisers to cut resources. If ministers wanted to cut the resources, powers or remit of the existing enforcement bodies, they wouldn’t need to pump new life into a 20-year-old (progressive) idea as cover for doing so. They’d just fucking do it.

No, as FLEX do at least note, “introducing a new body marks an opportunity to change the fundamentals of UK labour inspection”. Because, apart from very welcome increases (against the run of austerity) in the budget of the NMW enforcement team in particular since 2013 – I challenge you to show me any other area of (worthwhile) public expenditure that has increased by 170% since 2010 – the UK’s complex and fragmented enforcement architecture has barely changed in 20 years, despite enormous changes in the labour market, such as the growth of zero-hours contracts and bogus self-employment.

So, I’m not gonna hold my breath. Apart from anything else, it remains to be seen whether Boris Johnson will be as receptive and supportive as Theresa May seemingly was on this issue. And the clusterfuck of Brexit isn’t going to help. But I am encouraged by the fact that, at the same time it launched the consultation on a single enforcement body that closed yesterday, the Government appointed Matthew Taylor as interim Director of Labour Market Enforcement (Sir David Metcalf having retired in June). We may not be there yet, but, as Sam Cooke sang,

It’s been a long, long time coming,
But I know a change gonna come,
Oh, yes it will.

About wonkypolicywonk

Wonkypolicywonk is a policy minion who has in the past been lucky enough to work for one of the very best MPs in the House of Commons, and before that at Maternity Action, Working Families, Citizens Advice, the National Audit Office, the Law Society, and Amnesty International UK. He's now back with the fab feminists at Maternity Action.
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