Workers’ rights: New agency to issue businesses with large fines
Businesses face paying large fines from a newly formed agency if they are found to have breached Labour’s proposed workers’ rights laws.
As Parliament returns this week, ministers are reportedly weighing up the practicalities of the far-reaching package that includes controversial reforms like a ban on “exploitative” zero hours contracts, granting day-one rights after probation, and a so-called “right to switch off”.
According to The Times they are are currently weighing up how new Fair Work Agency (FWA), which is expected to be merger of already-existing watchdogs, will work in practice.
It will be given expansive powers, including the right to issue fines and bring prosecutions, and Angela Rayner, who is overseeing the reforms as deputy prime minsiter, had previously promised any regulator would have “real teeth”.
However, business leaders have called for small businesses to be precluded from any fines and charges issued by the new agency, accusing the government of “overreach” of the kind that would damage economic growth.
Craig Beaumont, chief of external affairs at the Federation of Small Businesses (FSB), told The Times: “A public agency should not be fining UK small businesses thousands of pounds for their existing employment, simply because they don’t provide formal corporate tick-box bureaucratic policies and paperwork. That overreach would be a devastating inadvertent consequence.”
Ministers are said to be erring towards establishing a warning system that would give firms a grace period to make improvement before being hit by any fines.
The Times also reported that the level of fines and prosecutions that the FWA will be able to issue are also the subject of contention, but they are unlikely to be above the lower thousands, with the new administration fearful of being “punitive” to business.
Currently, six governmental bodies – as well as local councils – can enforce working regulations. Of these, only some can impose fines in a finite number of situations.
The Resolution Foundation, centre-left think tank, has in the past argued the regulatory environment for breaching employment regulation was “fragmented”, and said that the enforcement powers existing watchdogs were “too low to act as a meaningful deterrent”.
A spokesperson for the Department for Business and Trade said: “[We are] bringing together existing bodies into a single agency to better support businesses and individuals.
“We are working in close partnership with business and trade unions to find the balance between improving workers’ rights while supporting the brilliant businesses that pay people’s wages.”