The UK Fair Work Agency: lessons from Australia for employers

Established on 7 April 2026, the FWA is a single enforcement body whose remit initially includes enforcing the national minimum wage, modern slavery and employment agency rules. Its remit will widen over time to include holiday pay and statutory sick pay, and may be extended to other employment legislation. For more background, see our recent blog: UK Employment Rights Act 2025: enforcement and the Fair Work Agency.

The more immediate question is how the FWA will operate in practice, and how quickly its enforcement activity will develop. That is particularly topical given the UK Government’s description of 2026/27 as a “transitional year”.

Australia’s Fair Work Ombudsman (FWO) offers a useful example of how an enforcement body of this kind can grow in scale and impact over time. It is also a closer parallel for the FWA than EU Member State labour inspectorates, whose mandates are typically broader.

The Australian experience—increasing enforcement activity

A comparison between the FWO’s first year of operation in 2009–10 and the last financial year, 2024–25, shows how sharply enforcement activity can grow over time. In 2024–25 alone, the FWO recovered more than AUD358m in wages (compared to only AUD21.3m in its first year of operation). Worker assistance, penalties and formal enforcement activity have all increased significantly over time.

This is instructive for the UK. A transitional year may limit the FWA’s immediate impact, but not its longer-term significance. If the FWA follows a similar path, the current phase may prove to be the foundation for a much more active enforcement model.

Note: The comparison is not exact as the FWO’s enforcement and recovery mechanisms have evolved over time. In 2009–10, unpaid wages were recovered mainly through complaints, audits and targeted investigations. In 2024–25, recoveries also reflected dispute assistance services, assurance programmes for large employers and self-reported underpayments.

Large employers may face particular scrutiny

The Australian experience also suggests that large employers may become a sustained focus for enforcement activity. In 2024–25, around 60% of the FWO’s wage recovery came from large corporate sector employers, which collectively back-paid almost AUD213m in unpaid wages. Since July 2020, the Australian corporate sector has accounted for AUD1.11 billion in back payments.

What does this mean in practice?

The key question is how the FWA develops as its remit expands and its enforcement approach takes shape. Its effectiveness will depend in part on how quickly it is resourced. The agency has also been given powers that go beyond those of its predecessor bodies, including the ability to bring Employment Tribunal proceedings on behalf of workers. That may make its trajectory even more ambitious than the FWO experience might suggest.

For UK employers, now is the time to review pay-related records and audit trails, and to ensure there are clear processes for responding to FWA enforcement visits or information requests. We discuss these preparatory steps in more detail in our blog: UK Employment Rights Act 2025: enforcement and the Fair Work Agency.

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