Posted by Stuart Bell

New UK action on labour exploitation

The UK is set to ramp up efforts to tackle the worst forms of labour exploitation under new regulatory proposals outlined in a Government response to an earlier consultation on Tackling Exploitation in the Labour Market.

What constitutes ‘exploitation’ is not clearly set out, but is likely to include modern slavery offences (including organised criminal activities such as trafficking), failure to pay the minimum wage and various contraventions of employment agency regulations.

Although legislation has yet to be drafted, the UK Government proposes a range of specific measures aimed at tackling serious cases of labour market exploitation.

New strategic director post

A new post of Director of Labour Enforcement will be created to provide co-ordination between existing agencies charged with enforcing various existing labour regulations, these being the Gangmasters Licencing Authority (to be reconstituted – see below), the National Minimum Wage enforcement team at HMRC, and the Employment Agencies Standards Inspectorate. The post would have a wide – if currently undefined – remit covering direct employment and labour agencies, and would be charged with developing an annual ‘labour market enforcement strategy’. The new post is already provided for in the Immigration Bill currently before Parliament.

New enforcement order to remedy labour law breaches

Where the labour market enforcement authorities have a ‘reasonable belief’ that a business has committed a ‘labour market offence’, they will be able to request a business to enter into an undertaking to take steps to prevent further offending. The enforcement bodies will be able to apply to a court for an enforcement order where a business had refused to give or failed to comply with an undertaking. Breach of the order would be a criminal offence.

Intelligence hub

Improved information sharing between existing agencies will be facilitated by creating an ‘Intelligence Hub’ which could include details of complaints, intelligence gathered during investigations or other relevant information. It is also proposed that this could potentially gather data from other agencies such as the National Crime Agency, Modern Slavery Commissioner and others.

Broader powers for a revamped Gangmasters Licensing Authority

The existing Gangmasters Licencing Authority (GLA) will be renamed as the Gangmasters and Labour Abuse Authority with a wider remit covering the whole economy, not just agriculture and food processing as currently.  Additionally, it appears that its functions, which presently consist of operating a licensing regime for labour providers, will also be significantly extended so that it can ‘prevent, detect and investigate worker exploitation across all labour sectors’. The new Authority’s exact powers are yet to be defined though it is noted that these will include ‘police-style powers’. It is noted by the Government that the relationship between the new Authority and the Director of Labour Enforcement will have to be clarified.

A tougher approach?

All in all, these proposals amount to a very substantial escalation in regulatory oversight, investigatory powers and possible sanctions in the labour market arena. Although the situations that might constitute exploitation are still to be defined – which could potentially undermine the applicability and scope of the proposals – when put together with the UK’s ground breaking Modern Slavery Act 2014 and increases in the minimum wage, it is clear that the Government is serious about tackling some of the worst abuses in the labour market. Critics may well point out that many other opportunities remain for unscrupulous employers to take advantage of the UK’s flexible labour market, and there is also a Bill before parliament which  unions claim significantly limits trade unions ability to defend their members interests, but the proposals do amount to tighter regulation and action at least at the very bottom of the labour market.

For most businesses in the UK, the reformed Gangmasters and Labour Abuse Authority will probably be the most significant change. The current GLA has built a respected reputation in terms of regulating outsourced labour providers in the food sector. It seems that a licensing regime may be extended to other sectors ‘where evidence supports its use’ (catering, hospitality, delivery and care might seem obvious sectors). This would have a significant impact on those sectors where licencing is applied. Further, if the new Authority gets wider investigatory powers in general in relation to labour abuses, this could affect an even wider range of businesses.

Legislation to introduce the new proposals could be included as early as this month through the Immigration Bill, which is continuing its legislative passage, so there may be answers to some of the areas of uncertainty very soon.

Finally, the approach of seeking undertakings from employers who are believed to breach standards and then monitoring and enforcing on the undertaking, represents an important move away from ‘compliance assessment’ and may have significant lessons for private voluntary initiatives and the social audit industry. Potentially it emphasises a process of finding agreed solutions where issues are identified, which can encourage systemic change at businesses, rather than focusing on hard findings of non-compliance.