UK Employment Law Guide
What is the Fair Work Agency and does it affect my settlement agreement?
The Fair Work Agency (FWA) is a new UK government body established by the Employment Rights Act 2025 to enforce workers' rights including minimum wage, holiday pay, and statutory sick pay. It is not yet operational as of May 2026. The FWA will consolidate enforcement functions currently held by several separate bodies into a single point of accountability.
The Fair Work Agency has been established in law under the Employment Rights Act 2025 but has not yet commenced operations. No launch date has been confirmed. Do not rely on FWA enforcement until the commencement order is issued.
What the Fair Work Agency will do
The Fair Work Agency is designed to enforce statutory minimum working standards across all sectors. It will carry out workplace inspections, investigate complaints, issue enforcement notices, and take legal action against employers who breach workers' rights.
- Enforce National Minimum Wage and National Living Wage compliance across all sectors.
- Investigate breaches of holiday pay and statutory sick pay entitlements.
- Conduct workplace inspections and require employers to produce evidence of compliance.
- Issue financial penalties, enforcement notices, and prosecute serious breaches.
Which bodies the Fair Work Agency replaces
The FWA consolidates enforcement responsibilities currently held by separate bodies. This removes the fragmented system where different agencies covered different areas of statutory compliance.
| Body | What it enforced | Status |
|---|---|---|
| Gangmasters and Labour Abuse Authority (GLAA) | Labour trafficking, modern slavery, gangmaster licensing | Functions transfer to FWA |
| Employment Agency Standards Inspectorate (EASI) | Employment agency conduct, unlawful fees, record keeping | Functions transfer to FWA |
| HMRC National Minimum Wage Team | Minimum wage and Living Wage compliance | Functions transfer to FWA |
Does the Fair Work Agency affect my settlement agreement?
The Fair Work Agency enforces statutory minimum standards, not settlement agreement terms. Your settlement is a private contract between you and your employer. The FWA cannot intervene in disputes about settlement payment amounts or negotiated terms.
However, if your settlement includes amounts below statutory minimums (for example, if holiday pay owed is excluded from the settlement), the FWA can take action against your employer for the underlying statutory breach. A settlement agreement cannot remove your statutory rights.
For disputes about whether your settlement offer is fair or whether your employer has met their statutory obligations, an employment solicitor is the right route. The FWA covers enforcement of minimum standards, not assessment of settlement value.
When will the Fair Work Agency launch?
The Employment Rights Act 2025 received Royal Assent but no commencement order for the Fair Work Agency has been issued as of May 2026. The Government must issue a separate commencement order setting the launch date. Until that order is published, the FWA has no operational powers.
Announcements about the FWA launch date are expected as 2026 progresses. Check the UK Government website or legislation.gov.uk for updates. Do not rely on FWA enforcement until operations formally begin.
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Calculate my settlementFrequently asked questions
Is the Fair Work Agency the same as ACAS-based enforcement?
No. ACAS-based enforcement refers to statutory dispute resolution and employment rights guidance used in settlement negotiations. The Fair Work Agency is a separate law enforcement body that will investigate breaches of statutory minimum rights (minimum wage, holiday pay, statutory sick pay) and can impose penalties on employers. The two serve different functions.
Can the Fair Work Agency help me if my employer underpays my settlement?
The Fair Work Agency cannot enforce the terms of your settlement agreement directly. However, if your settlement fails to include statutory entitlements owed to you (such as holiday pay or minimum wage arrears), the FWA can investigate the employer for the underlying statutory breach. Disputes purely about settlement terms require legal action or an employment tribunal claim.
What rights will the Fair Work Agency enforce?
The FWA will enforce National Minimum Wage and National Living Wage, statutory holiday pay, statutory sick pay, notice period wages, and protections against modern slavery and labour trafficking. The full scope of powers will be confirmed when the commencement order is issued.
Does the Fair Work Agency apply to Scotland and Wales?
The Fair Work Agency is established as a UK-wide body under the Employment Rights Act 2025. Employment law is partly devolved in Scotland and Wales, so some variation in how FWA powers apply may exist. If you are employed outside England, confirm the position with a solicitor once the FWA has launched.