From the TUC

The Swedish derogation

13 Sep 2011, by in Working Life

It may sound like a chapter from a dry history book but the “Swedish” derogation caused some interest at Congress today. Reference was made to it in an Emergency Motion from Unite, who are concerned about its impact on agency workers, and indeed other workers, in the UK. So what is it?

Essentially it as an option written into the EU Temporary Agency Work Directive that allows member States to insert a provision into their transposing legislation that says that where an agency worker is directly employed by an agency they are not protected by the equal treatment provisions in the Directive. The UK Regulations, which come into force in October, make use of the “Swedish” derogation.

To illustrate the effect by example, Jo has been signed up to the Slog Agency and they place her with various local companies where she works as a temporary receptionist. From October, when the Agency Work Regulations come into force, the companies where she goes to work would be obliged to give her the same rates of pay as their permanent receptionists after she has been there for 12 weeks. However, using the “Swedish” derogation, Slog takes her onto their books as an employee. In other words she has become an employee of Slog with a contract of employment – she is no longer an agency worker strictly speaking, even though she works for an agency. Slog is now solely responsible for paying her, setting her working hours and so on.

Although this gives Jo the basic employment protection to which employees (as opposed to agency workers) are entitled – for example better maternity rights, the right to claim unfair dismissal (after a year – soon going up to two years if the Government gets its way) and so on, it means that when Slog sends her to an assignment with another company she can legally be paid less than someone directly employed by the that company, thus potentially undercutting agreed rates of pay in that workplace.

The other problem with the “Swedish” derogation is that the UK regulations have stretched the provisions of the Directive to the extent that an agency can employ an agency worker and only give them a minimal amount of paid work for a week, but because they are an employee of the agency they have to be available to take work when it comes in. This means that they could end up earning very little in a bad week.

Unite’s motion asks the TUC to explore the potential for a legal challenge to the UK Regulations, which the TUC will now do. Unite has observed a significant recent increase in the use of the “Swedish” derogation and is concerned that it is being used to avoid the equal treatment provisions that underpin the Directive.

I started with history and I will end with more of it. It took several years to persuade the former Government to stop blocking the Agency Worker Directive in Brussels. What eventually emerged was a unique legal formulation based on a UK Social Partner (TUC, CBI and Government) agreement. The “Swedish” derogation was not wanted by the TUC but was one of the concessions that had to be made in order to get a Directive at all. Although the TUC did get a caveat inserted into the “Swedish” derogation, it was rendered feeble by the transposition. It is on that point that the Congress has now asked the TUC to take action. Of course this would have to be done with a close eye on any risks and unintended consequences but external advice will be sought and the General Council will take a decision based on that advice.

3 Responses to The Swedish derogation

  1. Adam
    Sep 21st 2011, 8:06 pm

    Having worked for an angency on the same job for a number of years i am now being forced to sign the swedish contract with the agency that will result i me earning just short of £4.00 an hour less than there own staff,this sucks in the highest order.

  2. David
    Oct 2nd 2011, 7:58 pm

    I have worked for an agency at a major supermarket distribution centre in essex for the past 2 years as a LGV driver, on the 21.09.11 i was asked into the agency’s office to discuss the new AWR, when i got there i was given a 20 page contract quoting the SWEDISH DEROGATION & told to read it there & sign it, if i didn`t sign it before the end of the month i would no longer be able to work for the client after the end of october, now i have to become a ltd company just to get out of the agency`s contract which means less tax & nat ins for the goverments purse just because these multinational companies want to give their shareholders more profit to put in their offshore bank accounts instead of giving more money to their workers who will spend it in their own country which will create more jobs & more wealth for this country when it badly needs it! TRY SOMETHING DIFFERENT & stick up for the downtrodden workers & complain to your MP about this injustice!

  3. Paul O’Brien
    Oct 15th 2011, 12:34 am

    I think this whole thing is a disgrace and just another slap in the face for the low paid worker.
    for years now the agency worker has been forced to a lower and lower wage, I’m talking about the hundereds of thousands of warehouse/production/forklift/van driver workers.
    I’m one of those workers, I USED to 8 years ago now earn £1000 pm after tax.. right now I earn around £900 pm after tax, Imagine how much more everything costs now and all wages continue to fall on the lower end of the skill set.
    agencies have a HUGE part in this absolute farce, whilst protesting at there slim margines, they have been rinsing every penny out of our pockets for years,
    I personally last year brought in at least 15000 pre tax to my previous agency employer.
    I worked an entire year as a temp earning half what the full time work force did and the agency received the rest. I was dropped flat after a year and had to find another job at another agency.
    Im currently working yet again as a temp hoping that the employer will not take on any of these underhand tactics and screw me over, im earning way under what i was 8 years ago as i stated and i cant survive like this.
    My friend for example, who is another factory worker has had to sign the swedish Derogation agreement so she is a core worker .. she was told if she did not sign the agreement she would only get one days work per week.. so while fulltime employees laugh away, temp/agency workers will continue to get shafter by these hardly regulated underhanded money grabbing agencies.

    This needs way more attention than it is getting, people right now all over the country are being screwed over by companies and agencies not willing to pay them a fair pay..

    lastly the definition of temp is not what everyone in the media seems represent, a temp is just another word for deposable full time employee, its a worker with no rights to anything, not even any notice of termination of employement.. the problem with the ‘low skill’ worker is that he is completly replaceable, meaning employers CAN get rid of everyone after 11 weeks and replace them with a fresh lot, they may never ever need to employ the same people theres that many low skilled/desperate job seekers out there.

    AND lastly lastly unemployment is WAY higher than reported, as I was a number and I never signed on, I would’nt, its a waste of time, but I was unemplyed for a couple of weeks and I know for a fact there must be a million others at any one time in that exact situation.