Labour Market Enforcement Director seeks views and evidence

11 August 2017

From accidental payroll errors to serious criminality, the development of an ‘Intelligence Hub’ is to provide a single view of risk and priorities across the spectrum of non-compliance.

In his introductory report, David Metcalf, the director of labour market enforcement sets out the current state of play for the three labour market enforcement bodies:

• Gangmasters and Labour Abuse Authority (GLAA)
• Employment Agency Standards Inspectorate (EAS)
• HMRC National Minimum Wage and National Living Wage (HMRC NMW)

The report also explains the role of the director of labour market enforcement and sets out the current evidence on the nature and scale of non-compliance using published data, enforcement data and intelligence.

In a second ‘summary of issues’ document, the issues on which David Metcalf is focussing for his 2018 to 2019 strategy are detailed and where he is seeking stakeholder views and evidence.

On the whole, employers comply with employment regulations and the law, there remain some problem areas where minimum standards in the labour market are not fully applied or enforced. Additionally, in the past 30 years the challenge of enforcing the relevant regulations and laws, has become more complex due to the major labour market changes, notably:

• The fissuring of employment relationships: the relationships between worker and employer have become increasingly complex as employers have contracted out, outsourced, sub-contracted and devolved many functions that were once done in-house
• The decline in union membership: unionisation in the private sector is in single figures outside ex-public industries, and the coverage of collective bargaining is only around one third of late 1970s figure
• Changing composition: the increase in part-time working, self-employment and the gig economy have been particularly significant in the last decade, along with a hollowing out of the labour market with fewer middle skill jobs, and the expansion of low and high skill jobs. The distinction between employees, workers and self-employed people is being increasingly blurred, impacting on clarity around rights and enforcement of these. The recent Matthew Taylor Review considered the issues around employment status in fuller detail

There are two principal routes to enforce employment rights via:

1. Employment tribunals where the enforcement of employment rights can be pursued on an individual basis, for example, in cases of unfair dismissal, discrimination and redundancy
2. Rights being enforced directly via a number of state bodies including the three which fall under the strategic remit of the director of LME

Beyond these, other bodies play an important role too. These include the health and safety executive, the Insolvency Service and local authorities, and the three bodies listed above should be working in partnership with these where appropriate. Recent extension of GLAA powers means the entire spectrum of non-compliance across the labour market in the UK now falls within the director’s remit; from unintentional errors to modern slavery.

The director has identified a number of areas and questions on which he would appreciate stakeholder feedback, evidence and views around:

• Development of the intelligence hub
• Approach to enforcement: issues common to all enforcement bodies
• Issues specific to each enforcement body

• Payroll
• Pensions