Fair Work Agency

A new state enforcement agency, the Fair Work Agency will be established. The Fair Work Agency will bring together existing enforcement bodies and will have to power to pursue employers who do not comply with statutory provisions i.e. those who take the commercial risk not to provide statutory provisions such as national minimum wage, holiday pay, statutory sick pay and maternity and paternity pay. The Bill also gives the Government broad powers to extend the Fair Work Agency’s scope to cover other employment rights.

Significant amendments were made at the Committee Stage of the ERB progress through Parliament which increase the remit of the Fair Work Agency.

The Fair Work Agency

• Holiday Pay: the amended Bill imposes a new obligation on employers to keep records demonstrating compliance with holiday entitlement (including the amount of leave and pay). There’s no set format for these records, but they must be kept for six years and failure to comply will be a criminal offence punishable with (potentially unlimited) fines.
• Statutory Payments: the Agency issue a notice of underpayment to employers, which specifies the amount payable within 28 days. This is combined with a penalty of 200% of the sum due, payable to the Secretary of State. These provisions are based on the existing regime for minimum wage enforcement, and have major implications for employers who get holiday pay wrong across a workforce.
• Bring Employment Tribunal Proceedings On Behalf Of A Worker if the worker has the right to bring a claim but it appears they are not going to, the Fair Work Agency will also have the power to provide legal assistance for employment-related proceedings.
• Recover Enforcement Costs where the Secretary of State has incurred costs from employer who are not complying with the law, the FWA will have the power to recover those costs. The method for calculating and charging these costs will be set out in regulations.

Implementation Of The Fair Work Agency

The Employment Rights Bill Delivery Roadmap confirms that the Fair Work Agency will be introduced in April 2026.

Top Tips

If you have concerns over current or past breaches, I encourage you to address these now. If you need any help with what you need to do, please get in touch and I will be happy to help you.

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