The Fair Work Agency: Everything you need to know about the UK’s new era of accountability

The UK government has officially launched the Fair Work Agency (FWA), an organisation designed to protect workers’ rights and ensure accountability from businesses required to follow employment laws. Its formation addresses a system that has been historically fragmented, providing both workers and employers with a single entity to turn to regarding workplace rights.

Context and backdrop

The UK fashion supply chain is currently undergoing a profound transformation. For years, domestic garment manufacturing has struggled in the throes of fragmented labour enforcement and widespread allegations of worker exploitation. In hubs like Leicester, historical debts owed to underpaid workers were estimated to reach 125 million pounds, with workers collectively denied up to 2.1 million pounds a week at the peak of illegal pay practices, a report by Labour Behind the Label stated.

The industry is therefore pushing for revitalisation. Leicester, for example, is currently serving as the pilot for the UK Textiles Renewal Project, driving a regional rebrand to establish the city as a high-tech, high-volume manufacturing cluster. To support this, a major 2026 apprenticeship intake is working to close the local skills gap. In this context, digital product passports (DPPs) and total supply chain transparency are now non-negotiables, moving the local industry into an era of stringent accountability and technological renewal.

What is the Fair Work Agency?

It is in this backdrop that the FWA has been established. The organisation brings together several existing groups, such as HMRC’s National Minimum Wage Unit and the Gangmasters and Labour Abuse Authority, under one roof. Their collective goal is to streamline strategy and improve efficiency, following a mandate to support compliant businesses through guidance and take action against employers who exploit workers.

The agency itself will retain the power to inspect workplaces, issue civil penalties, and recover unpaid wages for issues like the minimum wage and statutory sick pay. Ultimately, the aim is to level the playing field so that ethical, responsible fashion manufacturers can thrive without being undercut by illegal operators.

How is it rolling out?

The rollout of the FWA is taking a phased approach following the passing of the Employment Rights Act 2025. From April 2026, the agency will enter a transitional year after its establishment as it brings together multiple bodies under a single leadership structure. During this period, HMRC will continue to enforce the National Minimum Wage under a contracting arrangement with the FWA.

From 2027, the HMRC National Minimum Wage unit will fully integrate into the FWA. The agency will also expand its remit to enforce holiday pay and statutory sick pay.

In April 2027, the FWA is expected to publish the first Statutory Enforcement Strategy and, after the end of the 2027/28 financial year, the first Statutory Enforcement Annual Report, which will set out how the organisation has delivered against the priorities in the initial strategy.

How are industry organisations responding?

The consolidation of the agency has been largely welcomed by ethical manufacturing advocates who view it as a necessary step to secure public and brand trust.

Jenny Holloway, chief executive officer of Fashion-Enter and chair of the Apparel and Textile Manufacturers Federation (ATMF), highlighted the importance of the agency for the sector’s growth, particularly amid the unification of Leicester factories, which requires a streamlined approach for compliant businesses.

“As we work collaboratively to bid for public procurement contracts, it is essential that enforcement bodies have confidence in the factories they engage with,” Holloway added.

Labour Behind the Label also views the formation of a single entity as a positive step forward towards worker accessibility and centralised support. In doing so, the organisation views the agency as a vital tool in tackling the “culture of fear” prevalent in sectors like fast fashion manufacturing, with the focus on high-risk sectors emerging as a targeted approach to addressing long-standing issues, like the National Minimum Wage gap in manufacturing hubs.

The organisation did note, however, that these positive points will only influence real change if the agency is “properly resourced”, maintains a “firewall” from immigration enforcement, and moves beyond “supporting” employers to “robustly penalising” the brands that drive the low-cost model.

Its concern revolves around the ‘Brand Accountability Gap’, with current enforcement heavily targeting individual factories rather than the fast fashion brands dictating terms. In its current state, brands are able to use their purchasing power to demand low prices and short timeframes, driving exploitation while evading legal accountability.

Additionally, labour enforcement is linked to immigration control, which Labour Behind the Label states acts as a deterrent for migrant workers to report abuses out of fear of deportation. The organisation is calling for a strict separation between employment rights enforcement and immigration enforcement so workers can safely report exploitation.