face2faceHR Fareham - May Newsletter

News 

The 'Workers' Rights Police' are here: what the Fair Work Agency means for you 

A significant new chapter in UK employment enforcement opened this month with the launch of the Fair Work Agency (FWA) on 7 April 2026. The FWA brings together several existing labour enforcement bodies, including HMRC's National Minimum Wage unit, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate.  

For small businesses, the critical change is in enforcement style. Unlike the previous system, the Fair Work Agency can open proactive investigations based on its own intelligence and risk assessments - it doesn't need an employee to make a complaint first. The FWA has the power to conduct unannounced inspections, force entry to offices, and even arrest those it suspects of breaching labour law. Penalties are substantial: the agency can issue penalties of up to 200% of any underpayment, and can publicly name employers who breach the rules, which can cause significant reputational damage.  

The two immediate priority areas for the FWA are likely to be minimum wage compliance and holiday pay records. If your payroll and leave administration aren't watertight, now is the time to act - the era of hoping no one complains is over. 

 Minimum wage rise prompts hiring concerns  

The UK's minimum wage rose from 1 April by 4.1 per cent, taking the National Living Wage for those aged 21 and over to £12.71 an hour. Those aged 18 to 20 saw an 8.5 per cent rise to £10.85, while 16- to 17-year-olds and apprentices received a 6 per cent increase to £8 an hour. The increases have rattled some employers: research from professional services firm RSM found 29 per cent of employers plan to reduce the number of entry-level roles, and 23 per cent expect to cut overall staff numbers. However, the independent body that advises government on wages has pushed back on doom-laden predictions. The Low Pay Commission said the minimum wage rise will have a "minimal" impact on inflation and jobs, noting that last spring's increase did not significantly affect employment across the economy.  

For small businesses, the key compliance risk right now is inadvertent underpayment. Common risk areas include unpaid working time, expenses and salary sacrifice arrangements - all of which can push effective pay below the legal minimum even where headline pay rates look correct. With the FWA now in place, the consequences of getting this wrong are considerably higher than they were even a few weeks ago. 

 Legal 

Appearing unremorseful in a disciplinary hearing isn't misconduct — it might just be ADHD 

A deputy store manager at a large supermarket was dismissed for gross misconduct following a disciplinary hearing. The employee had been diagnosed with ADHD and experienced rejection sensitivity - an intense emotional and psychological response triggered by perceived or actual rejection, criticism or disapproval.  He asked for his disciplinary hearing to be adjourned so his disability advocate could attend, but the request was refused. 

The judge found that the employer had not fully understood the side effects of the employee's ADHD and had mistakenly concluded he was showing a lack of remorse. The employer should have sought occupational health advice and provided rest breaks during the hearing.  

This case is part of a sharp upward trend: decisions involving ADHD at employment tribunals have risen 750 per cent since 2020.  Reasonable adjustments for neurodivergent employees apply to hearings as well as day-to-day work - consider written notice of allegations in advance, breaks, and allowing a support person. Be careful not to interpret ADHD-related communication styles as evidence of attitude problems, and ensure sanctions are applied consistently across your workforce. 

A handshake deal on holiday pay, made decades ago, just cost one employer nearly half a million pounds. 

A commercial estate manager worked at a property management company from 1987. Because the company was short-staffed, he was repeatedly denied requests for holiday and agreed to receive payment for his allotted days instead. A formal arrangement was reached in 1998 to roll unused leave over annually, with payments actually made in 2001 and 2004. When a new board took over in 2022, the arrangement was ignored, and he was dismissed for gross misconduct in 2024 - with 827 accrued holiday days unpaid. 

The tribunal found he was entitled to £392,000 in unpaid holiday, alongside more than £100,000 in compensation for unfair dismissal.  The judge found no genuine belief that misconduct had occurred, and the dismissal process was wholly procedurally unfair - no charges communicated, no hearing, no appeal. 

This case has real resonance for small employers with informal arrangements and lean staffing. Failing to actively encourage holiday, keep clear records, and communicate any "use it or lose it" rules can result in very significant liabilities.  Note also that from 6 April 2026, you are legally required to keep holiday records for six years. And always follow a proper dismissal process - written allegations, a hearing, right to be accompanied, and a right of appeal - whatever the reason for dismissal. 

 Other stuff 

Whistleblowing reports on minimum wage five year high, with more than 7,600 whistleblower being filed with HMRC in the 12 months to 5 April 2025 - a 360 per cent increase since 2020-21. With the Fair Work Agency now operational, enforcement is only set to intensify. 

Tribunal cases relating to remote working fell by 13% last year compared to the year before  - the first such decline since the pandemic - suggesting that the battle over hybrid arrangements may be gradually settling, though disputes remain a feature of many workplaces. 

The number of open employment tribunals has increased by 12% and some cases will wait until 2029 to be heard  - a sobering reminder that prevention through good HR practice is far preferable to litigation, both for your pocket and your peace of mind.