Fair Work Agency: Small and Micro Businesses

Baroness O'Grady of Upper Holloway Excerpts

Wednesday 17th December 2025 Lords Chamber

[Lord Leong (Lab)]

The noble Lord is absolutely right. The Fair Work Agency will be set up as an executive agency independent of the Secretary of State. However, it will have to report to the Secretary of State for its actions and enforcement. It will bring the four current enforcement units together into a single unit that all businesses should be able to address, and it will simplify the whole issue.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, many businesses of all sizes will welcome the simplification that the establishment of the Fair Work Agency represents in terms of the enforcement regime, but does the Minister share my concern about the spread of bogus self-employment through a range of sectors, from logistics to construction and retail? Does he share the view of the newly appointed chair of the Fair Work Agency that a priority must be a crackdown on sham self-employment in order that the Employment Rights Act is a success and that workers who suffer those contracts get the minimum wages and rights that they have earned?

[Lord Leong (Lab)]

My noble friend is right draw attention to this matter, on which she has long been a thoughtful voice. In 2024, the Low Pay Commission estimated that some 20% of workers paid at or around the wage floor were underpaid the minimum wage. Analysis conducted by the Resolution Foundation suggests that 900,000 UK workers per year have their holiday pay withheld, worth some £2.1 billion. A similar analysis published by the Trades Union Congress estimated that 2 million workers do not receive their holiday pay and entitlements amounting to more than £3 billion per year, and 1.8 million workers do not even receive a pay slip. My noble friend is absolutely right. We need to crack down on these shambolic practices, and the Fair Work Agency will address them.