The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
I announced to the House in December 2010 that the Government would undertake a review of workplace rights and enforcement to establish the scope to streamline them and make them more effective. The terms of reference for the review were lodged in the parliamentary Library in January this year. In looking at this complex architecture it is clear that we first need to ask a number of questions as part of the red tape challenge, which launched its spotlight on employment law on 3 October 2011. I draw the House’s attention to the discussion paper, “Flexible, effective, fair: Promoting economic growth through a strong and efficient labour market” published on this date, in which we present some of our initial findings and set out the strategic questions for the red tape challenge spotlight period.
Our initial assessment is that there is significant fragmentation within the enforcement landscape, but this is largely as a consequence of the underpinning regulations. There is no common rationale for determining those rights that are Government enforced and those that are enforced through tribunals. There is no single overarching compliance strategy for Government enforcement of workplace rights, nor is there a mechanism for reviewing whether the risk associated with particular workplace rights still warrants Government enforcement. The different enforcement bodies have a range of powers and penalties at their disposal, including naming, civil penalties, criminal prosecution, licence revocation and prohibition for a defined period of time. These varying powers are also a consequence of differences in the underpinning regulations.
The creation of the pay and work rights helpline has done much to align the work of the different agencies and the impact of the fragmentation of the enforcement activity has not significantly impacted the experience of those workers seeking redress through the helpline. However, those furthest from the labour market often do not trust Government bodies to act on their behalf, perhaps as a consequence of cultural and historical experiences in other countries, or for fear of personal consequences. It is essential that the most vulnerable workers have confidence in their ability to access the protection they need and we are keen to learn lessons from unions and community groups who have a long track record in reaching these individuals.
While all the enforcement bodies have made significant efficiency savings, there is duplication of activity between the different enforcement bodies. Each of the bodies, for example, has separate corporate and management functions, intelligence assessment and risk evaluation functions. When carrying out enforcement inspections, the different enforcement bodies often look at the same evidence (such as contracts/statements of particulars, pay and work time records) and ask the same questions of employers or agencies, but there remain some legal barriers that prevent enforcement bodies from co-operating with each other, and with other regulatory bodies.
In order for us to be able to make progress on reviewing Government enforcement, I believe that we must review the underpinning regulations as part of the red tape challenge, including whether a lighter-touch enforcement regime could be implemented where rights are currently enforced by Government. In parallel to this work the Government will continue to consider potential enforcement models, including whether there could be benefits from establishing a fair employment agency to protect the rights of the most vulnerable. I will report back to the House again on progress in the spring.