TUC calls for ban on Swedish derogation contracts

Jo Faragher

Trade union body the TUC has claimed that UK employers do not treat agency workers equally and has called for a ban on the controversial ‘Swedish derogation’ exemption in the Agency Workers Directive.

The TUC has made a formal complaint to the European Commission, arguing that the UK Government has failed to implement the AWD, which came into effect two years ago, by not granting agency workers equal pay.

Under the directive, temporary workers are entitled to the same pay and conditions as permanent workers after they have been in a role for 12 weeks.

However, an exemption – known as the Swedish Derogation – means that if a worker is employed directly by an agency, the company does not have to pay that worker the same as a full time staff member, providing they get paid for at least four weeks between assignments.

TUC General Secretary Frances O’Grady said: “The recent agency worker regulations have improved working conditions for many agency workers without causing job losses. However, the regulations are being undermined by a growing number of employers who are putting staff on contracts that deny them equal pay.”

The TUC estimates that the number of agency workers on Swedish derogation contracts has grown by 15% since the recession, with as many as one in six agency workers on them.

Sam Hurley, head of External Affairs for industry body APSCo, says that, in its response, the Government will need to consider the balance between the commercial needs of employers and workers’ rights.

“While it is obviously important for the rights of vulnerable workers to be protected, the Swedish Derogation offers the agency worker a permanent contract of employment and pays the worker in between assignments,” she said. “The TUC actually agreed to the ‘pay between assignments’ regulation as part of the deal they made with the Government and the CBI and so I am surprised that they are now complaining about it.”

REC head of policy Kate Shoesmith added: “It is wholly misleading of the TUC to describe pay between assignments (PBA) or Swedish Derogation contracts as a loophole as they are part of the Agency Workers Regulations (AWR) that were assembled following consultation with the unions.”

“Most workers are now much better off as a result of AWR as they receive equal pay after 12 weeks. The UK economy has made a positive start on the long road to recovery and to disrupt this excellent progress by picking at regulations that the unions played a key role in constructing could put workers’ jobs at risk.”