Employment Rights Act: Fair Work Agency
The Employment Rights Act isn’t just tweaking individual rights. It’s also changing how those rights are enforced.
Enter the Fair Work Agency.
What is changing and when?
From 7 April 2026, the Fair Work Agency (FWA) will be established as a single enforcement body where workers and employees can seek help.
This isn’t an ACAS rebrand. It’s a significant shift in how employment law compliance is monitored and enforced.
What powers will the Fair Work Agency have?
The proposed powers are substantial. The FWA will:
Have ‘extended enforcement powers’ covering areas such as Statutory Sick Pay (SSP) and certain elements of holiday pay
Offer support to employers who are trying to comply with the law
Be able to bring tribunal claims on behalf of workers where the worker themselves chooses not to
Provide legal assistance to workers, with costs recoverable from employers found to be at fault
Pursue up to six years of underpayments relating to labour market breaches, including holiday pay and sick pay
Impose additional financial penalties on employers, payable to the Government
Six years of back pay exposure is not small change. And with added penalties on top, this shifts the risk profile for employers significantly.
What does this mean for your business?
Historically, many employment rights have relied on individuals bringing claims themselves. That can be costly, time-consuming and emotionally draining for employees, so some issues never reach a tribunal.
The Fair Work Agency changes that dynamic.
Now, enforcement does not rely solely on an individual being willing to bring a claim. The Agency can step in.
That means:
Increased scrutiny on payroll accuracy
Greater risk around technical breaches
Less room for “we didn’t realise”
A higher likelihood of historic underpayments being investigated
This is particularly relevant for businesses with complex pay structures, variable hours, overtime, commission or enhanced sick pay schemes.
What should you be doing now?
Although the powers of the FWA is still vague, there’s plenty you should be doing now to avoid any run-ins with them.
You should be:
Reviewing payroll processes: Ensure SSP calculations, holiday pay calculations and eligibility criteria are accurate and consistently applied.
Auditing holiday pay: Particularly if you have workers with variable pay, overtime, commission or irregular hours.
Checking sick pay processes: With SSP changes also landing in 2026, this is a key risk area.
Keeping clean records: If enforcement can look back six years, your documentation needs to be watertight.
Training managers: Many underpayment issues start with well-meaning but misinformed management decisions.
The theme across the Employment Rights Act is clear: prevention, compliance and accountability. The Fair Work Agency reinforces that message.
Final thought
In reality, you should already be doing these things properly.
But the introduction of the FWA, and the stronger emphasis on enforcement, is a clear nudge to pause, review and make sure everything stacks up.
Now’s the time to sense-check your processes, tighten up any grey areas and align your practices before someone else does it for you.
At Streetwise HR, we help businesses audit what they’re doing, strengthen what needs strengthening and put practical, compliant systems in place before issues escalate.
If you want to get ahead of this one, let’s talk.