In a formal complaint to the European Commission, the TUC claims that the way in which the EU rules have been transposed into the UK’s Agency Workers Regulations has enabled agencies to abuse the derogation, leaving tens of thousands of temporary workers worse off.
Under the EU rules, temporary workers are entitled to the same basic pay and conditions as the host company’s equivalent permanent workers after 12 weeks in the temporary position.
The ‘Swedish derogation’ exempts an employment agency from having to give the worker the same basic pay and conditions, as long as the agency directly employs the individual and guarantees to pay them for at least four weeks during the times they cannot find them work.
The TUC has called for a ban on the use of the Swedish derogation, to end what it views as pay abuses. It claims it has evidence from UK workplaces where agency workers are paid up to £135 a week less than the equivalent permanent workers, despite working in the same place and doing the same job. It also says that the number of agency workers with these contracts has grown by 15% since the recession, with as many as one in six agency workers on them.
However, Katja Hall, CBI chief policy director, said:
“While businesses find the Directive a nightmare to administer, the final deal carefully balanced the needs of businesses and employees – and the Swedish derogation is a key part.
“Many firms prefer to pay an agency to provide temps using the Swedish derogation rather than face the bureaucracy involved with complying with the Directive. This is perfectly understandable and entirely within EU law.”
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