The Fair Work Agency (FWA), introduced in the March 2025 amendments to the Employment Rights Bill, has been given sweeping new enforcement powers. One of the most significant changes is its ability to take employers to an Employment Tribunal on behalf of workers who may be unwilling or unable to pursue a claim themselves.
This means the under the new legislation, employers could face tribunal proceedings even if no claim is brought by an employee. Given this increased risk of enforcement action, particularly in areas where breaches may have gone unreported in the past, stronger compliance measures will be essential to avoid financial penalties and reputational damage.
What is the Fair Work Agency (FWA)?
The Fair Work Agency (FWA) is being introduced under the provisions of the Employment Rights Bill. It will consolidate various enforcement functions into a single body under the Department for Business and Trade, with the aim of boosting enforcement of employment rights across the UK.
The FWA has been granted extensive enforcement powers, including:
Inspections & investigations
The agency has the authority to conduct workplace inspections and investigate employer compliance with employment laws, focusing on areas such as minimum wage, statutory sick pay, holiday pay and redundancy protections.
Issuing penalties
Employers found to be in breach of their statutory obligations may face financial penalties, designed both as a deterrent and to compensate affected workers.
Enforcement notices
If businesses fail to comply with employment laws, the FWA can issue legal notices requiring corrective action within a specified timeframe. Continued non-compliance could result in additional sanctions or legal action.
Impact of new FWA powers on employers
One of the most significant changes introduced by the Employment Rights Bill is the FWA’s power to take employers to an Employment Tribunal on behalf of workers, such as in cases where employees might be hesitant to bring claims due to financial concerns, fear of retaliation or lack of legal knowledge.
Previously, employees had to initiate legal action if they believed their rights had been breached. Under the new system, the government can step in where there is evidence of wrongdoing in areas such as statutory sick pay, holiday pay, redundancy protections and other employment rights.
This means that even if a worker does not personally initiate a claim, the FWA can intervene and pursue legal proceedings on their behalf. The agency can also provide legal support to employees seeking redress for unlawful employment practices.
In light of this shift towards stronger enforcement and oversight, employers should take proactive steps to ensure compliance. Review your employment contracts and payroll systems to ensure that wages, holiday pay and statutory sick pay entitlements comply with legal requirements. Any discrepancies should be addressed promptly to avoid potential breaches or complaints.
HR policies should also be regularly updated to reflect the latest legal requirements and ensure that employees are treated fairly.Employers should also ensure that managers and HR teams are properly trained to apply policies consistently across the workforce.
Record keeping is of importance; keep accurate and detailed records of working hours, pay and employee entitlements that are readily available in case of an audit or investigation by the FWA. Employers will also be required to keep records of holiday pay compliance for six years, and failure to do so is considered a criminal offence that could result in unlimited fines.
Need assistance?
To prepare your organisation for these upcoming reforms, speak to our advisers. We can help you understand the new obligations and avoid legal risks.
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
