Single enforcement body for employment rights: Fair Work Agency begins to take shape

As the role of Labour’s new ‘Fair Work Agency’ (as it will be called) begins to take shape, it appears to be much more significant than we initially thought.

What will the role of the Fair Work Agency be?

The Amendment Paper, published last week, outlines the scope of the Fair Work Agency’s (FWA) role.

• 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 cost of this being recoverable from the other side if the claim is 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 are all government amendments, which means they have a good chance of making their way into the final Bill.

The implications for employers are potentially huge

This could fundamentally alter the dynamics of employment litigation in the areas covered by it. For example, an employer hoping to rely on worker loyalty or indifference to keep claims at bay may find that the FWA, seeing a worker’s reticence to claim, simply brings the claim itself.

The commercial considerations involved in defending a tribunal claim where the FWA is involved will need to include the additional risk of having to pay the FWA’s costs.

It is early days, and we are a long way off these proposals taking effect. The impact will be largely dependent on the level of funding and resourcing given to the FWA to realise its powers.

Further reading

• The Fair Work Agency