New protections for millions of vulnerable workers

• workers to be given enhanced rights to tackle unscrupulous employers who do not comply with the law
• new body would enforce holiday pay for vulnerable workers and ensure agency workers are not underpaid
• second phase of the government’s ‘Good work plan’ focuses on protecting vulnerable workers

Millions of low paid workers in the UK could receive more workplace protections in a move announced by the Business Secretary Greg Clark today (Tuesday 16 July 2019).

The government has announced its latest measures to advance the ‘Good work plan’, the largest upgrade to workers’ rights in a generation. These include:

• proposals to create a single labour market enforcement body, which will have the powers to enforce minimum wage and holiday payments
• the Business Secretary also confirmed that Matthew Taylor, the architect of the independent Taylor Review of modern working practices and an expert in modern business practices, has been appointed as the interim Director of Labour Market Enforcement

Business Secretary Greg Clark said:

We have a labour market that we can be proud of with more people in work than ever before. But it’s right that hard-working people see their rights upgraded and are protected from exploitative practices, whilst ensuring we create a level playing field for the vast majority of businesses who comply with employment laws.

A new single labour market enforcement body will bring together our different enforcement partners putting all our expertise in one dedicated place, better protecting workers and enforcing their rights now and into the future. Matthew Taylor’s appointment as Director of Labour Market Enforcement, the architect of our ‘Good work plan’, demonstrates our commitment to the largest upgrade in workers’ rights in a generation and preparing our labour market for the economy of the future.

Peter Cheese, Chief Executive of the CIPD, the professional body for HR and people development, said:

Stronger understanding and enforcement of employment rights is essential for creating fairer, more inclusive workplaces. The creation of a single enforcement body is an important step towards achieving better working lives for the UK’s most vulnerable workers. We welcome the government’s proposals and the recognition that tougher enforcement needs to go hand in hand with better support for businesses, many of which can fall foul of employment legislation unwittingly.

The government today launched a consultation on proposals for a new single labour market enforcement body. A new single body would create a strong, recognisable single brand and would make it easier for individuals to know where to go for help. It will also be better able to support businesses to help them comply with the law.

The proposals include the body having consistent powers to enforce payment of the minimum wage, labour exploitation and modern slavery, along with holiday payments for vulnerable workers and safeguarding agency workers. The consultation considers whether the body should also enforce workplace discrimination, harassment and bullying.

Notes to editors

Measures outlined in the package announced today form part of the government’s modern Industrial Strategy, which sets out how the whole of the UK can build on its strengths, extend them into the future, and capitalise on new opportunities.

The government is inviting views on enhancing workers’ rights across the country and has published its consultation on creating a single enforcement body. The consultation will be open for 12 weeks.

The government has already spent £33 million a year on enforcement covering:

• National minimum wage and national living wage (NMW and NLW)
• Domestic regulations relating to employment agencies
• Licenses to supply temporary labour in high risk sectors in the fresh food supply chain
• Labour exploitation and modern slavery related to worker exploitation

The government will be publishing the 2019 to 2020 strategy of the former Director of Labour Market Enforcement, Sir David Metcalf. Government is grateful to Sir David for producing this strategy prior to his retirement and for all his hard work in this role. We will carefully consider the 12 recommendations set out in this strategy and will respond in due course.

Sir David Metcalf, the first Director of Labour Market Enforcement, retired from his role at the end of June 2019. Matthew Taylor will take up the role of interim DLME on 1 August 2019.

The ‘Good work plan’ was announced in December 2018 and formed the government response to the independent Taylor Review of impact modern working practices (2017). The review found that the strength of the UK’s labour market is built on flexibility but that a clearer focus was needed on quality of work as well as the quantity of jobs. The government has already taken action by:

• introducing new rights to workers to receive a payslip and for payslips to include the number of hours worked; this came into effect on 6 April 2019
• ensuring all workers will be better protected from employers who have demonstrated malice, spite or gross oversight, with the maximum additional penalty that Employment Tribunals can use quadrupling from £5,000 to £20,000, which came into effect on 6 April 2019
• up to 120,000 agency workers to benefit from the scrapping of the Swedish Derogation - a legal loophole enabling some companies to pay agency workers less than permanent staff, and providing a key facts page to new agency workers before they sign up with an agency, which will provide clarity particularly around their pay
• introducing a new entitlement to a day one statement of rights setting out details of a new employee’s leave allowance and pay
• employees will have a stronger voice in the workplace. Employees already have a legal right to make a request to be informed and consulted about issues at work and the threshold for them to request these arrangements will be reduced from 10% to 2%
• extending the holiday pay reference period from 12 to 52 weeks, ensuring those in seasonal or atypical roles get the paid time off there are entitled to
• announcing a new naming scheme for employers who fail to pay employment tribunal awards
• taking further action to ensure unpaid interns are not doing the job of a worker