The proposals in the government's consultation paper on "Tackling Exploitation in the Labour Market" are designed to strengthen the way in which state bodies, such as HMRC, enforce aspects of employment regulation. The consultation paper indicates that new strategies are needed to reflect a shift from low-level non-compliance with employment legislation towards organised labour market exploitation.

The consultation includes three specific initiatives:

  • There will be a new criminal offence of aggravated labour law breach, which would apply to employers who commit breaches of labour law "deliberately, persistently and brazenly". Isolated breaches would be dealt with under the current enforcement regime, but the new penalty (potentially including a custodial sentence) would apply where there was evidence of systematic abuse of workers as part of an exploitative business model.
  • 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 (for the National Minimum Wage), 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. In future its remit could be expanded to include the investigation of serious worker exploitation in any sector, and regardless of whether workers are engaged through an agency, gangmaster or a direct contractual relationship with the employer.

Under a separate consultation, there is a proposal to prevent employment agencies and employment businesses from recruiting solely from overseas for work in Great Britain without advertising here and in English.

Another topical area of employment law enforcement is the statutory requirement for employers (in addition to their duties to inform and consult) to give advance notification to the government's Business, Innovation & Skills department where they are proposing to dismiss as redundant 20 or more employees at one establishment within a 90-day period.  BIS gives the information on the form HR1 to various bodies offering job brokering services and training services in the local area.

Failure to submit the form is a criminal offence and makes the employer and/or its directors liable to a fine of up to £5,000. Although a "special circumstances" defence is available if an employer has failed to comply with the obligation to file the HR1, the defence is applicable in a limited range of situations.

According to press reports, BIS is now taking a robust approach to enforcement and several directors of companies that have dismissed staff are currently facing court proceedings relating to alleged failures to comply with the notification procedures.

The timing for submission of the HR1 depends on the number of redundancies – where 20-99 are proposed, at least 30 days must elapse between form submission and the first dismissal. For those involving larger numbers, the period is 45 days.