Presentation is loading. Please wait.

Presentation is loading. Please wait.

Www.tuc.org.uk Enforcing employment rights Paul Sellers TUC Policy Officer.

Similar presentations


Presentation on theme: "Www.tuc.org.uk Enforcing employment rights Paul Sellers TUC Policy Officer."— Presentation transcript:

1 Enforcing employment rights Paul Sellers TUC Policy Officer

2 Enforcing employment rights- overview The UK model of employment rights has a number of serious flaws when it comes to enforcement: Lack of help for workers - “advice deserts” Workers’ Low awareness of details of employment rights and how they are enforced Some rights only enforced by Employment Tribunal, others by government agencies But government agencies have differing service standards, opening hours and so on Some rights only enforced “on complaint” (eg working time) others inspected (eg NMW, H&S). Result - Workers with multiple problems often become discouraged by enforcement labyrinth.

3 Minimum Wage Enforcement A better regime – Fair arrears Higher fines New civil penalties Greater powers for inspectors

4 Fair arrears Arrears to be paid back to workers at the current minimum wage rate - not the rate prevailing when they accrued (section 8). Fair arrears also apply to the Agricultural Minimum Wage Provides a modest financial benefit to low paid workers who are likely to have suffered hardship because of underpayment. Strength of this formulation – allows the calculation of fair arrears to apply to underpayment before the 2008 act came into force – this would not be the case with interest payments.

5 New civil penalty regime - 1 All employers caught underpaying workers are now liable to a civil penalty The amount is set at half the total arrears, subject to a minimum limit of £100 and a maximum of £5,000 The penalty is halved if paid within 14 days.

6 New civil penalty regime - 2 The new regime marks the first time that all those caught underpaying will have to pay a penalty as well as paying arrears. Previously, underpayers were first issued with an enforcement notice. Penalties were only for the 1% who failed to comply with enforcement notice. Problem – there was no financial incentive too pay until caught.

7 Higher maximum fines Section 11 makes NMW Act offences triable “either way” – by magistrates or Crown Court – possibility of higher fines Old maximum fines £5,000 continued as maximum summary fine in E & W but increased to £10,000 in Scotland Old maximum too low – compares badly with £75,000 maximum for producing counterfeit shirts NMW Act Offences – refusal to pay the NMW, keeping or producing false records, obstructing an investigation.

8 HMRC’s prosecution strategy HM Revenue and Customs plan to prosecute about 6 NMW offenders per year. Civil penalties will always be the main “stick” to ensure compliance. Merits of this approach – civil penalties most likely to ensure arrears paid quickly, prosecution is resource intensive, courts have so far imposed modest fines – between £800 and £3,000. Drawback of this approach – successful prosecution allows rogue employers to be named and shamed. Civil penalties are confidential Squaring the circle – perhaps amend the Commissioners for Revenue and Customs Act 2006 to allow disclosure of civil penalties.

9 New powers for NMW inspectors The Act gives HMRC the power to use the search and seize powers in the Police and Criminal Evidence Act 1984 when investigating criminal offences under the NMW Act. Section 10 of the Act allows HMTC NMW compliance officers to remove minimum wage records as part of an inspection. Previously they only had the power to inspect records at the employers premises, which made inspections unnecessarily difficult.

10 The NMW and voluntary workers Under the NMWA 1999, a voluntary worker is a worker in the 3 rd sector or public sector with an unpaid job. This distinguishes them from casual volunteers. They can only be paid expenses, otherwise the NMW is triggered. Section 13 of the act exempts volunteer instructors in the army, air and sea cadets from the NMW. this allows them to be paid a stipend without triggering the NMW. Section 14 clarifies what expenses can be paid to a voluntary worker without triggering NMW entitlement. The government said that this is to make it clear that voluntary workers can be paid for childcare expenses. These exemptions are OK in themselves, but beware pressure from 3 rd sector organisations to create further exemptions. Many would like substitute voluntary workers with a stipend for NMW employees.

11 Modest steps in regulating agencies higher fines More powers for inspectors

12 Higher maximum fines Section 15 of the Act makes a number of offence under the EEA 1973 triable either way – by magistrates or Crown Court. This opens up the possibility of higher fines for the most serious offences, as unlimited fines can be imposed at Crown Court. Section 15 also increases the maximum fine in magistrates courts in Scotland to £10,000 – the statutory maximum. In England and Wales the maximum fine in magistrates courts will continue to be £5,000

13 Offences that can be tried “each way” Requesting or receiving a fee for work finding services Breaking the regulations made under the 1973 act (expressed in the Conduct of Employment Agencies and Employment Business Regulations 2003, amended 2007). Failure to comply with a prohibition order

14 Powers to prosecute Scottish partnerships Under Scottish law a partnership is a separate legal entity. This makes it harder to prosecute offences by partnership-owned employment agencies in Scotland. Section 17 of the Act gives the Employment Agency Standards Inspectorate the choice of prosecuting either the partnership or the individual partners.

15 Stronger powers for EASI inspectors -1 The 1973 act and 2003 regulations specify which records can be inspected. Section 16 of the new act simply allows an inspector to demand any records that they might reasonably require in order to ensure compliance EASI Inspectors will now also be able to stipulate that all records must be produced at a certain time and place. Including those that have been deposited in banks. The old rules were too slack, as they only applied to records kept on the premises. This allowed employers to avoid inspection simply by taking the records home and avoiding their business premises for a few days.

16 Stronger powers for EASI inspectors -2 Inspectors will be able to remove records in order to make copies. Formerly they had to copy records on the employer’s premises, which made investigations unnecessarily difficult. The act creates a new offence of obstructing a EASI inspector – maximum summary fine £1,000 (level three)

17 Information sharing – NMW and EASI Section 18 of the act allows HMRC’s NMW compliance officers and DBERR’s Employment Agency Standards Inspectorate to share information for the purpose of their respective enforcement functions. Before this change, information sharing was strictly forbidden by law. Maximum penalty for HMRC officers - 2 years in prison! This is the first step towards a more joined-up enforcement regime. This model must be developed further in future legislation.

18 Conclusions The changes to the minimum wage enforcement regime in the 2008 Act are a major improvement Indeed, trade unions have long been asking for fair arrears and higher penalties and fines. The employment agency enforcement changes are far more modest but still welcome. The next steps should include the implementation of the Temporary Agency Workers Directive, extending the coverage of the GLA and a return to licensing employment agencies. More broadly, there is an urgent need to make the enforcement of all employment rights joined-up and user-friendly.


Download ppt "Www.tuc.org.uk Enforcing employment rights Paul Sellers TUC Policy Officer."

Similar presentations


Ads by Google