The Bright Side of Swedish Derogation
By the time the Agency Workers Regulations 2010 came into force on the 1st October 2011, hirers, agencies and industry bodies had spent considerable time consulting on the prospective legislation. One well-discussed aspect of this new legislation was surrounding what became known as the Swedish Derogation part of the Regulations.
So called because it was secured by the Swedish delegation when the Regulations were being discussed at European level, Swedish Derogation allows a temporary work agency to directly employ a temporary worker, taking them outside of that part of the Regulations that confers pay parity on a qualifying worker.
There has been much made of the use of Swedish Derogation by the press, driven in part by unions who believe that its use goes against the fundamental principle of the Regulations, namely to confer equal pay on temporary workers. However, in our experience, Swedish Derogation can actually be looked at favourably from the point of view of a temporary worker.
Consider this. In order to benefit from the right to pay parity, a temporary worker must first accrue a 12 week qualifying period with the same hirer, performing the same role during that time. The Regulations cite many reasons why the qualifying clock can be “paused” or “reset”, meaning that often, many workers will fail to actually accrue the amount of time necessary to benefit from pay parity.
Conversely, the benefits to a temporary worker who enters into a Swedish Derogation contract apply from day one. They have the certainty of knowing that, at any time during their employment with the agency, if they are available for work but the agency is unable to provide them with a suitable assignment, they will be eligible for pay between assignments from their employer. This pay between assignments will never be less than minimum wage, and must be paid for an aggregate minimum of four weeks before the employing agency can terminate that worker’s contract.
This gives a worker two benefits over pay parity. They have the security of knowing that they will be paid during breaks in assignments, and the knowledge that their employing agency will be working very hard to find them work to avoid the agency having to pay for the worker’s pay between assignments. Compare this to workers not on Swedish Derogation contracts, who have no security during times of lack of work, and no onus on their agency to find them work.
So, far from viewing Swedish Derogation as a nefarious tactic thought up by hirers to avoid paying parity to their temporary workers, it should be viewed for what it is – a genuine attempt by legislators to provide temporary workers with security and comfort during their time as temporary workers.