Ministers insist new watchdog will enhance UK workers’ rights

A new workers’ rights watchdog will have powers to name and shame UK employers who underpay staff and to ensure that vulnerable workers do not have to go to court if they are denied holiday or statutory sick pay.

The announcement on Tuesday confirms a previous commitment to merge three existing agencies responsible between them for tackling modern slavery, enforcing the minimum wage and protecting agency workers into a single body to improve the patchy enforcement of UK labour laws.

The new body will pool intelligence, offer a single port of call for whistleblowers and give employers guidance on their obligations.

The government’s long-delayed response to a 2019 consultation follows criticism of its failure to make space for an employment bill boosting workers’ rights in its latest legislative programme. There have also been widespread calls for ministers to place low-paid workers at the heart of the recovery from the coronavirus pandemic.

“We will do whatever we can to protect and enhance workers’ rights,” said Paul Scully, business minister, adding that the new body would help the government crack down on any abuses and take action against companies that turned a blind eye to problems in their supply chain.

But there is still no time allocated for the legislation needed to establish the new body, and no guarantee it will receive any extra funding to allow it to step up enforcement.

The Department for Business, Energy and Industrial Strategy (BEIS) said it would be established through primary legislation “when parliamentary time allows” and that a single body “would mean funding could be used more effectively with a greater impact”.

The Trades Union Congress said the announcement would do little to change working conditions, since there was “no plan to legislate to make it happen — and no new funding either”.

The main addition to the remit of the three existing agencies — the Gangmasters and Labour Abuse Authority, Employment Agency Standards Inspectorate and HM Revenue & Customs’ role in policing the statutory minimum wage — would be the power to ensure workers receive the holiday pay and sick pay they are owed, BEIS said. At present, HMRC cannot act on holiday and sick pay even when its investigations on the minimum wage find clear evidence of employers ignoring their obligations.

The new body would continue naming and shaming employers who underpaid workers and would extend HMRC’s existing scheme to cover rules protecting the pay of workers employed through agencies or agricultural gangmasters, BEIS said.

It will also assume a new role overseeing umbrella companies operating in the agency worker market, following cross-party calls to clamp down on malpractice in the sector. BEIS said the government had pledged to extend state enforcement to cover umbrella companies and that this would be included in the body’s remit.

BEIS said the government was still exploring separate measures to tackle some of the most serious abuses of workers’ rights reported in the textile industry. They came under the spotlight last summer when poorly run factories in Leicester were accused of contributing to a spike in Covid-19 infections.

One option would be to create a garment trade adjudicator to investigate companies’ supply chains; ministers were also considering extending the licensing scheme that currently covers agricultural employers, BEIS said.