In Labour policy documents, the Single Enforcement Body (SEB) seems like a mere footnote to their ambitious raft of employment reforms. These reforms, featured in Labour’s latest draft policy platform include; giving workers full employment rights from day one (rather than two years as it is currently), the right to work from home, the right to ‘switch off’, banning zero hours contracts, and ending fire and rehire. The establishment of the SEB, along with their policies to improve the dire state of Employment Tribunals, will be essential in realising the entirety of Labour’s New Deal For Working People. This is for the simple reason that without significant reform, rogue employers will be free to continue to ignore employment law, knowing its enforcement is unlikely – and will be safe in the knowledge that where the law is enforced, it is done so as with an absurd degree of leniency towards employers.

The SEB has had an interesting journey on its way to being part of Labour’s latest policy programme. It began life as part of the Conservatives 2019 “Good work plan”. The proposal would’ve merged three government employment enforcement bodies into one watchdog, with an expanded remit to clamp down on law-breaking employers with tough penalties. Its implementation was to be part of the long awaited Employment Bill, but was scrapped entirely after Grant Shapps announced the bill would “no longer be on the cards” this side of an election. For the Tories it represents another addition to the ever growing list of broken manifesto pledges. 

It’s difficult to understate just how bad employment enforcement is in the UK at present. Government enforcement agencies are fragmented, weak, and underfunded. There are currently seven different enforcement agencies: HMRC’s National Minimum Wage unit (HMRC MW), Gangmasters Labour & Abuse Authority, and Employment Agency Standards Inspectorate (EAS), The Pensions Regulator, Health and Safety Executive, and Equalities and Human Rights Commission, and local authorities. The government proposal of the new SEB would’ve merged only the first three. 

Coordination, to the extent it is possible in such a fragmented system, is supposed to be provided by the Director of Labour Market Enforcement (DLME). However, the DLME has become a role symbolic of the inertia within British employment enforcement. The office has changed hands three times since its establishment in 2016. The DLME hasn’t produced an annual report since 2019, and only produced an “interim report” for their yearly mandated strategy report. The report arrived two months late and has made no new recommendations. The current DLME, Margaret Beels, has blamed this malaise on “bureaucratic holdups” in a recent interview, further admitting that workers “probably haven’t the foggiest who we are”.

It’s easy to see why. The scale of the underfunding and the resulting lack of resources is stark. Beels admits enforcement agencies have only one quarter of the International Labour Organisation’s recommended number of inspectors (1,800). The total budget for employment enforcement has fallen in real terms by twenty-one percent since 2010. 

The government white paper that proposed the SEB makes for grim reading. It states that there is currently no government body that enforces holiday pay for vulnerable workers. Agency workers working for Umbrella companies outside the remit of the EAS also have no government body to enforce their rights, and that the only route for a company to be forced to publish a Modern Slavery statement is for the Home Secretary to seek an injunction via the High Court. According to the Group of Experts On Action Against Trafficking In Human Beings, an estimated forty percent of eligible companies are not complying with the Modern Slavery Act. Despite a non-compliance rate of forty percent, as of 2021, no such injunction has ever been sought on behalf of the Home Secretary. 

Fragmentation and underfunding of UK employment enforcement agencies is far from their only problem. All share a culture of leniency towards law-breaking employers. Employment enforcement agencies follow a ‘compliance first’ approach, which presumes good faith on the part of firms found to have committed violations in the first instance. A 2023 report by the Resolution Foundation found that:

HMRC MW, the agency with some of the toughest civil penalties at its disposal, routinely allows firms to make good any underpayments to workers without issuing a fine (formally known as ‘self-correction’). As a result, in 2021-22, forty-one percent of arrears uncovered attracted no penalty. The Pensions Regulator takes a similar approach: in 2022 the agency issued a fixed penalty notice in just thirty-nine percent of cases where non-compliance was detected.

The report details a culture of leniency at employment enforcement agencies which posit law breaking employers as having committed “technical breaches” when firms fall foul of an area where the law is complex. This level of leniency is distinct to employment enforcement agencies and such leniency is not equally afforded in other areas of enforcement such as taxation.

In cases where fines are handed out, the penalty pales in comparison to enforcement agencies in Europe and Australia. As demonstrated in the Resolution Foundation’s report, which states that: 

If a firm is found to have underpaid a single worker the National Minimum Wage to the tune of £1,000, the UK can – although frequently does not – impose a penalty equivalent to the sum of arrears in the first instance, and twice the arrears in the event of late payment. This compares to multipliers of 1.3 and 2.2 for France and Ireland respectively, 2.6 in the Netherlands, up to 44 for a firm (and 8.9 for an individual) in Australia and an extraordinary 126 in Norway. 

Ultimately, law-breaking employers are being afforded every opportunity to willingly dodge their legal obligations towards their workers, safe in the knowledge that enforcement agencies, which are fragmented, underfunded, and weak, will hand out little to no penalties in response. When workers take rogue employers to Employment Tribunals and win, fifty-one percent of awards go in part, or in full, unpaid. In 2018 the government pledged to name and shame any employer who did this, but have as yet failed to name a single one.

Labour’s policy promises to remedy this comes with a pledge for a “properly funded SEB” with “extensive powers to inspect workplaces and bring prosecutions and civil proceedings on workers’ behalf relating to health and safety, minimum wage, worker exploitation, and discriminatory practices.” As well as promising to employ enough inspectors to carry out unannounced inspections and follow up on anonymous reports. 

There are unanswered questions however, the Resolution Foundation’s Five-Point Plan includes recommendations not included in the government’s white paper or Labour’s policy proposal. One of which concerns the issue that stops vulnerable migrants from reporting violations. They fear, justly, that their details will be passed on to Immigration Enforcement. The Resolution Foundation proposes a ‘firewall’ between the new SEB and Immigration enforcement to ensure safe reporting for vulnerable migrants. As well as proposing the idea of a “Super complaint” system, similar to the Competition and Markets Authority, which would allow the new SEB to investigate issues of systemic change. This would be vital for any future Labour government seeking to get to grips with gig economy multinationals which exist to exploit, and create, gaps in employment legislation. 

The establishment of an SEB would be the first step on a long journey to fixing how the UK enforces employment law. But its establishment alone will not stop injustices such as the P&O Ferries scandal, or the Just Eat ‘robo firings’, from happening again. Professor of Labour Law at Bristol University Alan Bogg has called for the creation of a Labour Enforcement Act. The proposal includes a range of recommended measures such as; empowering courts to waive statutory caps on fines and award punitive damages where an employer has made a calculation of the profits resulting from law-breaking and made a deliberate decision to breach the law, legalising secondary action in instances where an employer has deliberately breached its statutory duties, and clarifying the existing scope for accessory liabilities to executives in companies responsible for orchestrating wrongdoing. 

Regardless of concerns about Labour backsliding on its current commitments, the breadth of support for the Single Enforcement Body makes it extremely likely that it will be established under the next Labour government. Employment enforcement agencies seem to be at their lowest ebb, underfunded, fragmented, with any hope of reform quashed by the Conservative government. For Labour, this is fundamentally a question of whether the state can take on the most predatory elements of global capital. Even the off-the-shelf policy would represent a vast improvement in how employment law is enforced in the UK. Time will tell if Labour’s New Deal For Working People lives up to the legacy of its namesake, but if Labour want to change employment law, they must first properly enforce it.

The Labour Party was approached for comment