Out-Law News 2 min. read
03 Sep 2013, 10:05 am
The TUC, which represents the majority of UK trade unions, has lodged a formal legal complaint against the Government with the European Commission. It has claimed that the Agency Workers Regulations (AWR), which implemented the Temporary Agency Workers Directive into UK law, allow the abuse of the so-called 'Swedish derogation', which provides an exception from the general rules for workers that are employed permanently by a temporary work agency.
"The recent agency worker regulations have improved working conditions for many agency workers without causing job losses," said Frances O'Grady, TUC general secretary. "Yet again business organisations have been proved completely wrong in claiming that decent rights at work cost jobs."
"However, the regulations are being undermined by a growing number of employers who are putting staff on contracts that deny them equal pay. Most people would be appalled if the person working next to them was paid more for doing the same job, and yet agency workers on these contracts can still be treated unfairly," she said.
The AWR, which came into force on 1 October 2011, gave temporary agency workers the same rights as directly employed staff doing the same work to "basic working and employment conditions", such as pay and holidays. To be eligible for those rights, agency workers must successfully complete a 12-week qualifying period.
The Swedish derogation provides an exemption from this general equal treatment principle in relation to pay where a worker is employed permanently by an agency and continues to be paid a minimum amount for at least four weeks between assignments. In Sweden, where this type of contract originates, workers still receive equal pay once in post and 90% of their normal pay between assignments, according to the TUC. However, the UK legislation only specifies a minimum of no less than 50% of their highest pay in the previous 12 weeks or the National Minimum Wage.
According to a report from the Recruitment and Employment Confederation (REC), the use of Swedish derogation-style agency contracts has grown rapidly since 2011, with around one in six agency workers now on this type of contract. They are regularly used by call centres, food production, logistics firms and in parts of the manufacturing sector, according to the TUC.
The TUC said that the UK Government has failed to provide adequate protection for agency workers, despite provisions in the EU Directive which state that countries must prevent the misuse of Swedish derogation contracts. It said that it had gathered evidence of some workplaces are paying agency staff up to £135 a week less than permanent staff, despite them working in the same place and doing the same job.
"Swedish derogation contracts are just one more example of a new growing type of employment that offers no job security, poor career progression and often low pay," O'Grady said. "People are often unable to plan and budget from one month to the next, energy bills are a struggle and home ownership is a pipe dream."
A spokesperson at the Department for Business, Innovation and Skills told Out-Law.com that the Government would "consider carefully any information the TUC presents to the European Commission". However, employment law expert Simon Horsfield of Pinsent Masons, the law firm behind Out-Law.com, said that the unions' challenge was unlikely to be successful.
"The Directive is very clear that equal treatment as regards pay does not apply where the worker has entered into a permanent contract with an agency which provides for pay between assignments," he said. "This being the case, it seems to me that the AWR are entirely compatible with the Directive."
"Given the Government's current drive to remove 'gold plate' from domestic legislation which goes further than the Directive requires, I would be very surprised if we end up with any significant change in the law," he said.
