New Single Enforcement Body is a huge step forward for umbrella regulation

A welcome win for the collective campaign for umbrella regulation and our recent policy. However, the devil is in the detail; a timetable for legislation and sufficient funding for the Government’s new body are critical for success.

On 8th June, the government announced it is creating a new Single Enforcement Body (SEB) to protect workers’ rights and clamp down on workplace abuse. 
This was one of the measures included in the policy document ‘Umbrella Companies – Call for Regulation’ (known as the UCR policy), drafted by Rebecca Seeley Harris, Chair of the Employment Status Forum and former Senior Policy Adviser to HM Treasury’s the Office of Tax Simplification, and James Poyser, CEO of inniAccounts and Off-payroll.org.uk. The policy was submitted to the Financial Secretary to the Treasury and the Minister for Labour Markets at BEIS on 12th May 2021.

One body to protect workers’ rights

The government’s plans will see the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s National Minimum Wage Enforcement combined to create a single enforcement body.

As well as enforcing all existing powers belonging to the three agencies, the new body will have a new ability to ensure vulnerable workers get the holiday pay and statutory sick pay they are entitled to without having to go through a lengthy employment tribunal process.

At the time of the announcement, there was no specific mention of the umbrella companies non-compliance issues, which is costing HMRC and the contingent workforce billions in pounds each year. The last year has brought to light the precarious nature of the labour supply chain and many temporary umbrella workers have found themselves caught up in non-compliance issues as an unintended consequence of the off-payroll reforms and Covid-19.

SEB will include umbrella companies in remit

Since the initial announcement, the government has clarified the new SEB will include umbrella companies in its remit.

James Poyser and Rebecca Seeley Harris said: “The government has now responded to the consultation. It has provided a full and considered response and it is promising to create a Single Enforcement Body. The response document is a high-level document and does not go into specific detail but the framework is certainly a huge step forward in terms of regulation of the umbrella company industry and the protection of workers. The crunch point will be whether the SEB is given enough funding to properly achieve its aims, this will not be considered until in the next Spending Review. The funding will be critical to the success of the SEB and whether it goes ahead.

“There is much detail to be worked on, and the devil is in that detail, which of course is contained in our Umbrella Company Regulation Policy (UCR Policy). We intend to keep pushing the government for a legislative time table and guide the content. But we are treating this as a win, albeit with the collective effort from many others over the years, including Matthew Taylor.”

Timetable for legislation and sufficient funding essential for success

James Poyser says: “We are greatly encouraged by the announcement to better co-ordinate enforcement efforts between agencies. The fact that workers will be able to contact the SEB directly to blow the whistle on exploitation and ensure that they get the holiday pay they are entitled to is a firm step forward in ensuring workers’ rights are protected and abuses in supply chains are stopped.”

Rebecca Seeley Harris adds: “It’s concerning that the SEB will be only established through primary legislation when parliamentary time allows. This does not bode well for those people currently enslaved in gangmaster and unethical supply chains nor the contingent workforce caught up in the umbrella company scandal. We recognise it is a hugely complex area to legislate and will take time to get right, but as independent experts we are uniquely positioned to put forward a coherent plan that achieves both the regulation of umbrella companies and protection of the workers.

“The FST has referred us to Paul Scully at BEIS to discuss the policy content so we can discuss it in detail and continue our efforts to ensure all members of working society are protected. As such, we will continue to press the government to set a timetable for primary legislation, commit to legislate and ensure our policy recommendations, that stretch beyond curtailing abuses and also reflect modern working practices, are included. We will also continue to press for the regulation of umbrella companies themselves and/or licensing but, at least this step will mean that there is an appropriate regulatory body.”

Read more about James and Rebecca’s policy here.