LEGAL UPDATE: Fair Work Agency

The Labour’s Plan to Make Work Pay included a pledge to create a single enforcement body for employment rights, which is now taking shape under the Employment Rights Bill and The ‘Fair Work Agency’ looks to be a significant reform. 

The recent Amendment Paper highlights what the Agency will be able to do: 

• Bring Employment Tribunal claims on behalf of a worker if the worker has the right to make a claim but chooses not to.
• Offer claimants legal assistance for employment cases, with the costs incurred being recoverable from the Employer should the claim be successful. 
• Enforce failure to keep adequate records of holiday pay for six years – through prosecution and potentially unlimited fines. 
• Enforce failure to pay some statutory payments including holiday pay and sick pay by issuing a notice of underpayment. The amount payable in the notice must be paid within 28 days, alongside a penalty payment which must be paid direct to the government. This proposal would bring these statutory entitlements in line with the regime which is already in place to cover national minimum wage.  

These proposals are all government amendments, which means they have a good chance of making their way into the final Bill, which could have huge implications for employers. 

This is because these changes could massively alter the dynamics of employment litigation where the rules apply. For example, an employer hoping to rely on worker loyalty, lack of funds, or indifference to reduce risk of claims may find that the Fair Work Agency steps in and brings the claim itself. The stakes will then be higher as the commercial consideration will need to take account of the risk in defending a tribunal claim because of the additional risk of having to pay the FWA’s costs.

Ultimately, right now [April 2025] we still have some way to go before the final form of these proposals are clear and then when they will take effect. And even then, the real impact of the FWA will depend on the level of funding and resources allocated to it to enforce its powers. 

If you have any concerns about how the coming changes will impact your business, please get in touch. While we trust this article is useful, it is not intended to be legal advice, so please contact us if you need any help with these issues.