Last Autumn's consultation on "Tackling Exploitation in the Labour Market" arose out of a need for new strategies to counter a shift from low-level non-compliance with employment legislation towards organised labour market exploitation.
The consultation included three specific initiatives. The first was that there should be a new criminal offence of aggravated labour law breach, which would apply where there was evidence of an intention to deprive workers of their rights or exploit them in connection with the commission of an offence.
The government has decided to shelve the idea of having a new criminal offence, because of the potential difficulties in proving intention. Instead, there will be a new type of enforcement order supported by a criminal offence for non-compliance. Where there is reasonable belief that a labour market offence has been committed, existing labour market enforcement bodies (such as HMRC, in relation to the national minimum wage and, from April, the national living wage) will have the power to require a business to enter into an undertaking to take steps to prevent further offending. The enforcement bodies will be able to apply to a court for an enforcement order where a business has refused to give, or failed to comply with, an undertaking. An order will also be available as a sentencing option for labour market offences. Breach of the order will be a criminal offence, with a maximum custodial penalty of two years.
The new enforcement order will be introduced in the Immigration Bill currently going through Parliament.
Two other proposals will go ahead as planned:
- A new Director of Labour Market Enforcement role will be created to develop a strategic plan for labour market enforcement and set priorities for the existing enforcement bodies – HMRC, the Employment Agency Standards Inspectorate and the Gangmasters Licensing Authority (GLA).
- The GLA is currently only responsible for specified sectors of the economy such as agriculture and food processing. It will now become the Gangmasters and Labour Abuse Authority, with an expanded remit to include the investigation of worker exploitation in any sector, and regardless of whether workers are engaged through an agency, gangmaster or a direct contractual relationship with the employer.