In July this year, the Government announced a new consultation to explore whether to introduce a single enforcement body for labour rights. As its deadline approaches, we explain our thinking...
Currently in the UK, we have multiple enforcement bodies, each with differing names, remits, access points, etc. This creates a complex, fragmented and confusing picture for workers seeking support for abuses and for employers trying to understand their responsibilities.
Why does labour inspection matter?
Labour inspection, or labour market enforcement, is crucial if we are to protect our workforce from abuse and exploitation, including the most severe forms which fall under the Modern Slavery Act. Those forms – human trafficking, forced labour, slavery and servitude – are most often understood as ‘exceptional’; that is, they are anomalous occurrences that happen because of an offender or offending group of people. When thought about like this, labour inspection seems irrelevant because they appear to be solely a criminal justice issue. Whilst it’s true that in such cases, there will be an offender who should be brought to justice, actually these severe cases are better understood not as anomalies but as the logical product of a system in which abuses can thrive.
As expert Klara Skrivankova has described, when we allow a labour market in which basic rights and laws are continually violated, we end up with “a more general undermining of conditions of decent work”. This creates a market that is permeable to exploiters and human traffickers, as it is clear they can get away with abuse and coercion with a low likelihood of being caught. And we also know that abuses can accumulate over time, so that someone may initially be experiencing lower level forms of labour abuse, such as under-payment of wages, but this can escalate over time to situations of severe exploitation in what has been described as a “tunnel of entrapment”.
And labour abuses are thriving in the UK today. For example, our research with migrant construction workers in London last year found:
- 50% of workers surveyed had no written contract
- 36% of workers surveyed reported not being paid for work completed
- 53% of workers surveyed were made to work under dangerous conditions
- 33% of workers surveyed had experienced verbal or physical abuse while at work
Recently published research from the Latin American Women’s Rights Service (LAWRS) provides insight into feminised labour sectors, specifically cleaning, hospitality and domestic work. Their report analysed 326 cases of women supported by the service and found that:
- Over half of the workers faced breaches to their contracts
- 46% of cases had experienced unlawful deduction of wages
- 20% had experienced illegal underpayment of the National Minimum Wage
- 21% were not provided with written contracts
- 28% were not allowed to take time off for being unwell (paid or unpaid)
- 17% were denied annual leave to which they were legally entitled
These two pieces of research, which show endemic abusive practices in markedly different sectors, demonstrate clearly that the current system is ineffective, at least in part.
Would a single enforcement body help?
FLEX is responding to the consultation, drawing on our extensive work over the years examining the nature of UK labour inspection and what’s needed to improve it. In our view, a single enforcement body presents interesting opportunities to clarify where workers can go for help by creating a single, clear brand. It may also open up discussion space for more appropriate organisational models: FLEX is interested in the potential of a structure comparable to those in Denmark, Austria and Sweden, in which central offices are complemented by localised hubs. This would provide a clearer access point for local workers to get support and mean the inspectors on the ground have close knowledge of specific labour market issues in their area.
Overall though, a single enforcement body will only improve UK labour inspection if it's designed in a way that meets the needs of workers and addresses current failings. That's why we’re proposing six design principles. These are:
1. Protected Reporting
Our research, and that of others, has consistently noted that joint working between labour inspectorates and immigration enforcement in the UK undermines the efficacy of UK labour market enforcement with regard to migrant workers. As the EU Agency for Fundamental Rights has noted, “victims of severe labour exploitation who are in an irregular situation of residence are discouraged by their status from reporting to any public authority”.
We recommend that all workers have safe access to reporting abuse or exploitation, which means:
- Workers will be protected from repercussions from employers if reporting violations.
- Workers will not have their immigration status checked or considered as part of any reporting of complaints or during labour inspections.
2. Evidence-Based Resourcing
Despite the vital role of labour inspection in stopping labour abuse from happening, in the UK today our inspectorates are woefully underfunded:
- The ILO’s recommended ratio of inspectors to workers is one to 10,000. The UK is vastly below that ratio, with approximately 0.4 inspectors per 10,000 workers.
- In 2017/18, the Gangmasters and Labour Abuse Authority had 101 staff to oversee not only the inspection and licensing of three sectors but also to use police-style powers across the entire labour market in England and Wales to root out modern slavery. To put this into perspective, the Office for National Statistics estimates that for May to July 2019, 32.78 million people aged 16 and over were in employment within the UK; even with the proportions of this which pertain to Scotland and Northern Ireland, this remains a large task for an agency with 101 staff.
- The Employment Agencies Standards Inspectorate (EASI) overseas around 18,000 employment agencies and around 1.1 million workers, yet in the same year had a staff of 13 and a budget of £725,000 .
- Finally, as noted in the Director of Labour Market Enforcement’s ‘Strategy 2018/19’, HMRC’s minimum/living wage enforcement capacity is so under-resourced that “the average employer can expect an inspection around once every 500 years”.
Instead, we recommend the Government bases how much money it puts into inspection and related activities on evidence:
- Resourcing is based on evidence drawn from the labour market, enforcement personnel and intelligence-based risk understandings.
- Resourcing is based on regular assessments of labour market size and characteristics, risks present, and staffing and capital costs needed to undertake required activities.
- Resourcing is cognisant of the need for both reactive (i.e. complaints-led) and proactive (i.e. targeted based on risk assessments) enforcement and the appropriate proportion of each.
3. International Best Practice
We recommend a principle of following international best practice in resourcing and practices, such as the World Bank recommended ratio of 60% proactive versus 40% reactive inspection and the ILO recommended ratio of 1 inspector per 10,000 workers. This would ensure the UK isn't lagging behind the rest of the world. Arguably, this will be even more important after Brexit if we wish to attract migrant workers to come and work here.
4. Fair and Efficient Remediation
There are serious and well-documented problems with remediation, preventing workers from gaining full justice. For example, Resolution Foundation’s recent publication, ‘From rights to reality: enforcing labour market laws in the UK’, demonstrates that employment tribunals are not being accessed by workers at higher risk of specific labour market violations. This may be due to complexity: in response to the Director of Labour Market’s 2018/19 strategy consultation, Citizens Advice noted, “among people who didn’t seek redress, our survey found that 32% didn’t do this because they thought it would be too difficult and complex…”. Other barriers are elucidated by the report, ‘Unpaid Britain: Wage Default in the British Labour Market’, which describes workers viewing the idea of making a wage claim at tribunal or County Court “with great caution” due to fear of job loss and the obstacle of fees. Even where workers do take cases to tribunal, it has been reported that claims are taking an average of eight months to be heard, which may also be deterring claims from being made in the first place.
- Workers’ cases are dealt with fairly and efficiently, with remediation outcomes appropriate to meet workers’ needs.
- Access to compensation and other appropriate remediation is timely, straightforward and at no cost to the worker and, whatever the outcome for the worker, she will have experienced a clear and unbiased approach to her case. This could be evaluated by surveys of workers who have made complaints or been identified during the course of targeted enforcement.
5. Gender Sensitivity
Labour abuse and exploitation must have a gender-aware approach, as specific sectors are highly feminised and violations may present differently where gender intersects with workplace problems. It is extremely evident that this has been a missing piece in the enforcement landscape to date: in his oral evidence to the Women and Equalities Committee inquiry on enforcing the Equality Act, then Director of Labour Market Enforcement, Sir David Metcalf was asked “To what extent has the Equality Act been part of your strategy for improving the enforcement of workers’ rights?” to which he responded, “Hardly at all…”.
- Enforcement strategies and responses recognise that women workers face specific and distinct forms of violations and experience distinct risks.
- A single enforcement body, and its specific departments, should have a published gender responsive strategy with sector-specific strategies that are tailored to meet the needs of women workers and with appropriate training for staff. For more information on how labour inspection can take a gender sensitive approach, please see our report, ‘Women in the Workplace: Five Point Plan to Combat Labour Exploitation’.
6. Worker Voice
We believe the people best placed to ensure working standards are decent are workers themselves, or their representatives. As such, we recommend:
- Workers themselves and/or their representative organisations, such as trade unions and migrants groups, are involved in the design of UK labour market enforcement, such as the structure of the body, changes to it and evaluations of it.
- The statutory governance body should have a tripartite structure, including worker representative organisations. Schedule 2 of the Health and Safety at Work Act 1974 provides the requirement for a tripartite board for the governance of the Health and Safety Executive; a comparable approach should be taken to ensure this is in place on a statutory basis for a new body.
We don't need to wait for change
All six of these design principles would ensure a fairer workforce for all and serve to uphold our labour laws more effectively than is currently happening. Whilst introducing a new body marks an opportunity to change the fundamentals of UK labour inspection, all six of these crucial areas could be addressed immediately under the current system. FLEX hopes Government will make much-needed changes to UK labour inspection, regardless of whether it goes ahead with the proposed new body. Workers in every sector and every community need them to do so.