GLAA welcomes new director’s warning to jail rogue bosses

• Sir David Metcalf will work with government enforcement agencies to use powers which carry a maximum two-year prison sentence for serious labour market offences
• He will consult worker and business representatives on how best to tackle exploitation linked to large employers’ supply chains
• New enforcement statistics today reveal government identified record back pay for workers, with almost £11m for 98,000 workers in 2016/17

The Director of Labour Market Enforcement today warned rogue employers he would be consulting on how to make full use of powers to jail the worst offenders in the UK.

The stern message issued in the introductory report by Sir David has the full backing of the Gangmasters and Labour Abuse Authority.

GLAA Chief Executive Paul Broadbent said: “I met with Sir David on a number of occasions to discuss how we can go further and work smarter to prevent labour abuse in the UK.

“I welcome his proposals for greater scrutiny of supply chains and for a review of labour market enforcement. They should help us to work more closely with partner agencies and tackle serious breaches and criminality much more quickly and effectively.”

Sir David Metcalf was appointed in January 2017 to oversee a government crackdown on exploitation in the workplace by setting the strategic priorities for the government’s three enforcement agencies: HMRC’s National Minimum Wage (NMW) enforcement team, the GLAA, and the Employment Agency Standards Inspectorate (EAS).

Publishing his introductory report, Sir David said: “Tackling labour market abuses is an important priority for the government and I am encouraged it has committed record funds to cracking down on exploitation.

“Over the coming months I will be working with government enforcement agencies and industry bodies to better identify and punish the most serious and repeat offenders taking advantage of vulnerable workers and honest businesses.”

The director added that he would work with the government’s enforcement bodies to:

• better tackle illegal practices by implementing labour market enforcement undertakings and orders, which came into force in November 2016 and carry a maximum two-year prison sentence for serious or repeat offences
• identify how best to ensure large employers’ supply chains do not breach labour market laws, particularly in the fashion, construction and cleaning sectors
• review the effectiveness of current labour market enforcement efforts

Over the coming months Sir David will consult business and worker representatives, industry bodies and enforcement action groups ahead of publishing his first full labour market enforcement strategy later this year.

The report is published alongside this year’s National Minimum and Living Wage enforcement statistics. The figures show in 2016/17 HMRC’s enforcement teams identified a record £10.9m in back pay for 98,150 of the UK’s lowest paid workers – a 69% increase on those helped last year.

Businesses who failed to pay workers at least the legal minimum wage were also fined £3.9m, with employers in hospitality and retail sectors among the most prolific offenders.

Business Minister Margot James said: “This government is firmly on the side of hard-working people and we are determined to stamp out any workplace exploitation, from minimum wage abuses to modern slavery.

“While the majority of employers create a fair and safe environment for their workers, there are a small minority of rogue employers who break the law and we will use all enforcement measures at our disposal to crack down on labour market abuses.”

Minister for Crime, Safeguarding and Vulnerability Sarah Newton said: “I welcome the director’s introductory report which recognises the importance of a collaborative approach across enforcement agencies.

“I am pleased that we have extended the reach and budget of the GLAA as it will enable them to do even more, using new powers to search premises, seize evidence, and arrest those who mistreat workers.”

“The new powers are working, multiple arrests have already been made, including for modern slavery offences, and I am confident that GLAA officers will continue to disrupt the unscrupulous criminals who exploit the mostvulnerable.”

The report comes after Matthew Taylor published his independent review into modern employment practices to achieve “good quality work for all”. The government will study this review carefully over the summer and respond in detail later in the year.

Notes to editors

1. Labour market enforcement undertakings and orders came into force on 25 November 2016, under the Immigration Act. Under the powers, the GLAA, HMRC’s NMW enforcement team and the EAS can all:
   1. seek an undertaking from a business to take action to stop them committing a labour market offence
   2. If a business refuses to give, or breaches, the undertaking the enforcement body can apply to a court for a labour market enforcement order
   3. If this is also breached it can result in a fine and/or a custodial sentence. This provides a more effective sanction for repeat and serious offenders
2. The government is set to launch a pilot for the undertakings and orders shortly ahead of the scheme being rolled out across the country.
3. The introductory report notes the recent enforcement action the government has taken, including:
   1. The government has invested an extra £2m to extent the remit of the GLAA and  with specialist trained officers now authorised to use police-style powers to seize evidence and make arrests in investigations into the most serious labour market offences under the Police and Criminal Evidence Act 1984
   2. In February 2017 the government launched a £1.7 million National Minimum and Living Wage awareness-raising campaign, encouraging the UK’s lowest paid workers to check they are being paid the correct rates and to report their employer if they are not
   3. HMRC has been given a record £25.3m to enforce National Minimum Wage and National Living Wage, enabling them to target larger employers with complex supply chains
4. Today Sir David will start consulting with stakeholders ahead of publishing his first full strategy later this year. To contribute please email directorsoffice@lme.gsi.gov.uk