New Measures to Tackle Exploitation in the Labour Market - What you Need to Know
With effect from 25 November 2016, labour market enforcement bodies will have new tools for tackling rogue employers who exploit their workers in the form of new Labour Market Enforcement Undertakings and Orders.
Background
You may recall that back in Autumn of 2015 the government launched a consultation on tackling exploitation in the labour market. In its response to that consultation, the government set out its intention to introduce a new undertaking and order regime, and to create the new role of Director of Labour Market Enforcement.
Although not directly related to immigration rules, the government introduced provisions to give effect to these aims into the Immigration Bill, which at that time was before Parliament, and these provisions were enacted when the Immigration Act 2016 received royal assent in May 2016.
The various measures contained within the Act are being brought into effect in stages, with a significant number being introduced in July of this year. This included the establishment of the new role of Director of Labour Market Enforcement, who is responsible for monitoring offences such as non-payment of national minimum wage, offences committed by employment agencies, and other labour market abuse, and to coordinate the functions of the 3 enforcement authorities who currently work to ensure compliance with labour market legislation, namely HMRC, the Employment Agency Standards Inspectorate, and the Gangmasters and Labour Abuse Authority (formerly the Gangmasters Licencing Authority).
The New Labour Market Enforcement Undertaking and Order Regime
On 25 November 2016, the new Labour Market Enforcement (LME) undertakings and orders provisions will come into force. These provisions, which some critics have dubbed 'ASBOs for employers', will enable any of the 3 enforcement authorities to require an employer who commits certain 'trigger offences' to sign an undertaking requiring it to comply with certain measures in order to prevent further labour market offences.
Where an employer refuses to give an LME undertaking, or where an undertaking is breached, the enforcement authority may apply to the courts for an LME order. Breach of an LME order is a criminal offence punishable by up to two years in prison and/or an unlimited fine.
The legislation currently provides for the following trigger offences which may give rise to an LME undertaking or order:
- offences under the Employment Agencies Act 1973
- offences under the National Minimum Wage Act 1998
- offences under the Gangmasters (Licensing) Act 2004
- offences of attempting or conspiring to commit any of the above offences
The legislation allows the government to add to this list of trigger offences by way of further regulations, and it is anticipated that at some stage regulations will be laid to include offences relating to the employment of illegal workers.
These new powers have been introduced in response to increased non-compliance within the labour market and complement the existing penalties already available to deal with those who breach the rules.
Best Practice
It remains to be seen how widely these new powers will be used, but these measures show the increased hard-line approach the government is taking to tackle labour market offences and they could be of particular importance in the gig economy where workers can often be more vulnerable to exploitation. Employers, employment agencies and those who engage workers through other arrangements should take care to ensure compliance with relevant legislation.