New report aims to tackle the exploitation of low-paid workers and enforce holiday pay

Posted on May 15, 2018

The Government’s Director of Labour Market Enforcement, Sir David Metcalf, has now published his report, “Labour Market Enforcement Strategy”, covering issues such as low paid workers and holiday pay rights. Here’s what this new report could mean for employees.

David Metcalf and his recommendations

Sir David Metcalf has set out in his report 37 recommendations to the government in order to tackle the exploitation of some of the UK’s lowest paid workers. Some of the key recommendations include:

Enforcing holiday pay and enacting new laws ensuring that workers are provided with a statement of rights when joining a company, and the availability of payslips for all employees;
Increased pursuance of prosecutions for employers who fail to meet their obligations;
Higher financial penalties for employers who fail to meet their obligations;
Making companies jointly responsible for breaches of obligations within their supply chains;
Increasing resources available to Employment Agencies Standards Inspectorate in order to better enforce obligations;
Regional piloting of licensing for hand car washes and nail salons, due to those industries being particularly susceptible to exploitation of workers;
Establishing a web-portal and targeted social media campaigns to raise awareness and provide helpful information to employees.

Currently, there is no governmental body that has been charged with tackling companies who fail to provide holiday pay to their workers. The report cites sources stating that in the UK in 2016, workers were paid £3.1bn less than they were entitled to, with over half of this being due to failures to provide acceptable holiday pay.

Sir David’s report also suggests that large brands should be held jointly responsible for non-compliance within their supply chain. The impact of this could be widespread, and will require businesses to carefully evaluate their supply chains, ensuring that measures are being taken to avoid the exploitation of workers.

The report follows the government’s ‘Good Work Plan’ announced in February this year, which was designed to create day-one rights for employees, as well as increase transparency in the employment sector, more efficiently enforce workers rights, and ensure that workers have access to their rights and payslips.

Sir David commented on the report:

“This strategy sets out how we can toughen up enforcement activity to protect vulnerable workers and ensure that good, compliant firms are not undercut by unscrupulous competitors.

“It’s important the government has the necessary powers to crack down on bad bosses who exploit and steal from their workers – that includes bigger penalties to put employers off breaking the law.”

Andrew Griffiths, the current minister for the Department for Business, Energy and Industrial Strategy said:

“We will not accept illegal behaviour from bosses who exploit their workers and cheat the competition which is why we are already cracking down on irresponsible company directors and boosting protections for workers.

“We will enforce holiday pay and give new rights for every worker to get a payslip and a list of their rights when they start a job as part of our modern Industrial Strategy plans to build a Britain fit for the future.

“I’d like to thank Sir David for his important work looking at enforcement and exploitation in the labour market.”

What this means for employees

Whilst the report is only a recommendation to the government, business owners should be aware of potential changes to their obligations and the enforcement of their employees’ rights. Employees should keep a close eye on developments in the area to be better informed of their rights.

The government is expected to respond to the report later this year.

Contact

If you require assistance with any of the issues discussed in this article, whether you are a business owner or an employee, you can contact Susan Mayall on 0161 684 6948.

Sources

Labour Market Enforcement Strategy (2018 to 2019)

Government press release, “Director of Market Enforcement calls for measures to tackle exploitation of low paid workers”

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