COMPLIANCE
The CIPP’s policy and research team outlines recent and continuing developments and the government’s response Labour market strategy
A s the government continues and that support is offered to businesses to help them be compliant in these unnerving times. With recent allegations of exploitation in clothing factories in Leicester the need to protect workers is further demonstrated. The role of the director of Labour Market Enforcement (‘the director’), created through the Immigration Act 2016 (‘the Act’), was designed to tackle labour market exploitation and bring increased attention and strategic co-ordination to the enforcement of labour market legislation by the following three enforcement bodies: ● the Employment Agency Standards Inspectorate ● HM Revenue & Customs’ (HMRC’s) national minimum/living wage team ● the Gangmasters and Labour Abuse Authority (GLAA). Appointed as the first director on 1 responding to the pandemic, it is important that workers are protected January 2017, Sir David Metcalf CBE was required by the Act’s provisions to prepare an annual labour market strategy report. The aim was to assess the extent and nature of non-compliance within the labour market, to set priorities for the future for the three enforcement bodies, and to distribute resources needed to deliver those priorities. Important changes have already been made since the last strategy release, including legislation which extends to all workers the right to receive a payslip and ensures that employers must also state hours worked for those classed as ‘time paid’ workers. In July 2019, shortly before retiring, Sir David Metcalf published the 2019/20 strategy, making 44 recommendations to the government. All the recommendations had the aim of building on developments
already made by the enforcement bodies, in response to the director’s introductory strategies that were published in July 2017 and May 2018. In June 2019, the government opened a public consultation on the proposals for establishing a new single enforcement body for employment rights (https://bit. ly/2Tt4NMt) and will be formally responding to the consultation shortly. In August 2019, Matthew Taylor was appointed as the interim director of Labour Market Enforcement, and the government will shortly begin the recruitment process to appoint a permanent successor. The appointee will have a role to play in the transition to a new body, guaranteeing enforcement outcomes are maintained. The government will need to work directly with the director during the process to develop and implement plans for the new body. The government’s response In October 2020, the government published a response to the director’s 2019/20 strategy. Of the 44 recommendations considered by the government, 35 are accepted, eight partially accepted and just one rejected in full. As well as setting out the steps the government is taking to protect vulnerable workers, supporting businesses to adhere to the law and to improve joint working between the enforcement bodies, the actions detailed in the response represent an important foothold to deliver on the Conservative party’s manifesto’s pledge of establishing a single labour market enforcement body. It is intended this body will bring together all the enforcement bodies listed above into a single organisation to develop best practices. National minimum wage (NMW) and its compliance dominates the strategy set out
by Sir David Metcalf, with a strong emphasis on communication and collaboration between the government departments, which enforce the need for the single enforcement body. It was highlighted that there was a strong need to better understand the scale and nature of non-compliance within the labour market. By doing so, this would enable effective prioritisation of the enforcement resources available and fully evaluate the impact of enforcement activity. This was agreed by the government, with them stating that “it is important that resources and interventions are targeted in the most effective way to reduce employer non-compliance and protect workers and welcomes the recommendations in this area”. National minimum wage Currently, HMRC deploys national resources in order to meet the commitments set out in their service level agreement with the Department for Business, Energy & Industrial Strategy. The NMW compliance strategy – based on promote, prevent, respond – sees HMRC taking a differentiated approach to tackle identified risks, ensuring that efficient use of resources occurs and to maximise the scope of coverage to the enforcement programme. Action has already been undertaken to broaden the coverage by way of extension to include Scotland and Northern Ireland, with new teams being created in areas of concern such as Bradford and Nottingham. Some 166 joint working operations have been conducted by the HMRC serious non-compliance teams in areas which have been identified as being high risk which includes car washes, nail bars, construction, and the textile industries. Recommendations were made for HMRC to review its strategic intelligence function, which is already actioned by way of the production of the NMW Risk Strategic Report assessment that includes complaints along with intelligence analysis reviewed monthly at the Risk Governance Board. The Risk Intelligence Service analytical report includes analysis into the relevant sector or risk area derived from Risk Model information,
...44 recommendations considered by the government, 35 are accepted, eight partially accepted and just one rejected...
| Professional in Payroll, Pensions and Reward | December 2020 - January 2021 | Issue 66 22
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