UK Employment Law Guide
What is the Fair Work Agency and does it affect my settlement agreement?
The Fair Work Agency (FWA) is a planned UK enforcement body established under the Employment Rights Bill 2024-25 to enforce workers' rights including minimum wage, holiday pay, and statutory sick pay. It is not yet operational as of 2026. The FWA will consolidate enforcement functions currently held by several separate bodies into a single point of accountability.
The Fair Work Agency is provided for under the Employment Rights Bill 2024-25 but has not yet commenced operations. No launch date has been confirmed. Do not rely on FWA enforcement until statutory commencement orders are 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 offer meets standard benchmarks, see our guide on what makes a settlement agreement fair or check how your baseline is calculated under ACAS-based settlement calculations.
When will the Fair Work Agency launch?
The Employment Rights Bill 2024-25 establishes the agency framework, but no statutory commencement order has been issued as of 2026. The Government must publish an official commencement order before the FWA has operational powers.
Announcements about the FWA launch date are expected as 2026 progresses. If you are currently negotiating an exit or facing dismissal, you should read our guide on how to negotiate a settlement agreement rather than waiting for regulatory agency changes.
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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 Bill 2024-25. 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.
Related Guides & Calculators
ACAS-Based Settlement Calculations
Learn how statutory redundancy formulas, the £751 weekly cap, and notice pay interact.
What Is a Fair Settlement Agreement?
Understand multiplier ranges, statutory baselines, and warning signs of a low offer.
How to Negotiate a Settlement Agreement
Negotiation strategy, Without Prejudice rules, and practical steps to submit a counter-offer.
Redundancy Pay Calculator
Free tool applying 2026/2027 statutory weekly caps and age multipliers.
Statutory Framework & Government Sources
- UK Parliament: Employment Rights Bill (Establishing the Fair Work Agency & enforcement powers)
- Department for Business and Trade (DBT) – Labour Market Enforcement Directives
- Employment Rights Act 1996 (Primary UK workplace rights framework)
- Acas Code of Practice on Settlement Agreements