To meet widespread concern about vulnerable workers and working conditions in industries including agriculture, fashion, food and waste disposal, last month (June 2021) the government set up a new watchdog to take over responsibility for tackling modern slavery, enforcing the minimum wage and protecting agency workers.

The new body is designed to support employers to comply with the law, provide detailed guidance on best practice and take enforcement action for non-compliance.

It is hoped that a ‘one-stop shop’ approach, combining the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s National Minimum Wage Enforcement, will improve enforcement of workers’ rights.

How will the new regulator operate?

One of the aims of the new body will be to support employers to comply with the law. Compliance activities of bodies such as the Advisory, Conciliation and Arbitration Service (‘Acas’) will be built upon to provide detailed technical guidance to employers on their obligations to workers. It is also envisages that the new body will develop links with community and worker groups to support engagement with at-risk groups, such as agriculture.

The government has confirmed that the new body will continue to use the current naming and shaming system under the National Minimum Wage scheme. Businesses who fail to pay workers the minimum wage can expect to be publicly called out for this. A new compliance notice system will be created to address lower harm breaches, whereas rogue employers who flagrantly fail to pay workers minimum wage may be fined up to £20,000 per worker.

The new body will also be given powers to ensure that workers receive holiday and sick pay that they are legally entitled to.

The enforcement activity will extend to regulations protecting the pay of agricultural workers employed by agencies or gangmasters.

The government hopes that by effectively enforcing the rights of vulnerable workers, responsible businesses are not undercut by those who do not pay or treat their workers properly.

Proposals for the future

It is clear that if businesses fail to comply with their legal requirements in relation to protecting vulnerable workers, the following measures could be introduced:

  • Goods made in factories where workers have been underpaid could be banned;
  • A Garment Trade Adjudicator could be created to investigate supply chains; and
  • The licence scheme that currently covers employers in the agricultural sector could be extended to other industries. This is where businesses that source workers for fresh food supply chains must be licensed to operate in the sector and are subject to regular inspections.

Conclusion

While the finer details of how the regulator will operate are not yet clear, it is apparent that businesses will need to take steps to ensure that they protect vulnerable workers, or they may face public enforcement action. Failing to comply may have wide reaching consequences, including the possibility of receiving large fines. If businesses wish to avoid this, they will have to ensure that there are no abuses taking place in their supply chains.

You can view the full government response to the consultation here and the full DBEIS statement here.