Companies using loopholes to avoid equal pay for agency workers

Employers are increasingly exploiting loopholes in the the new agency workers regulations, to dodge paying agency and temporary workers equal pay with permanent employees a new report suggests.

Two thirds of employers are exploiting loopholes according to employment lawyers Eversheds.

The Agency & temporary Workers legislation provides for equal treatment for the UKs 1.4 million agency staff and came into force in October 2012, giving agency workers who work for an employer for more than 12 weeks the same rights to pay and most benefits as permanent workers.

However the Eversheds survey of 143 companies found that 17% were using the “Swedish derogation”, an ‘opt-out clause’ used by companies including major retailers, logistics and in manufacturing.

The Swedish Derogation allows the employment agency, not the client company to become the employer – allowing the agency to set the rate of pay and conditions – not the client company. These rates of pay are normally lower than the rate in the company.

The derogation was created in Sweden to protect agency workers between assignments – Swedish employment law provides significantly more protections that UK legislation.

Other dodges being used include creating jobs that make workers ‘self-employed’, companies creating ‘new starter’ rates for permanent staff, thus reducing the rates of pay they have to pay to agency workers. Other companies are using short-term assignments that end before the 12-week qualifying period concludes to avoid the rules and some companies have set up an ‘in-house group’ of temporary workers to whom they do not have to pay equal wages, or have contracted the work out to a managed service company.

Brendan Barber of the TUC said: “The directive was intended to make it harder for employers to get away with treating temps like second-class workers and give this often vulnerable group pay and conditions more in line with their permanent colleagues. That’s why the suggestion that employers are already using loopholes to get around their responsibilities under this relatively new law is so disappointing. Unions will be wise to employer attempts to undermine the directive and if, as the evidence comes in, it appears there has been widespread avoidance of the law, the TUC will have no choice but to put in a formal complaint to the European Commission about the UK transposition of the directive.”

Facebook Twitter Plusone Linkedin Pinterest Email
This entry was posted in Blogs, Employment Rights, European Trade Unions, Labour Party, Media, Politics, Trade Unions, Trades Union Congress, Unite The Union, Workers Uniting. Bookmark the permalink.

2 Responses to Companies using loopholes to avoid equal pay for agency workers

  1. alex letham says:

    i work for a large supermarket chain they use the swedish derogation to pay less and have stopped most of 130 drivers overtime to give it to agency workers because they can pay less to them were now the second class citizens abondoned at xmas thanks to the opt out agencys are using

  2. mick says:

    i am working as a temp and have worked with other agencies using these loopholes and the companies are in cahoots with the agencies. i currently work in a factory as a temp and the factory is run completely with agency temps. there are a few agency workers who have been with the company for over 2 years. they are in employment contracts with the agency which they had to sign or lose there jobs after 12 weeks . i know that if i dont sign a similar contract i will lose my job too and the agency will not get me any more work. i refused to become an contract work for an other agency which dropped me like a stone after my initial 12 weeks. they will tell you anything just to get you in work and on one of their contracts. all i can say is i need the work but will not become a pawn in there game of making loads of money ,so i will carry on going from agency to agency after the 12 weeks . there is nothing i can do, but hopefully the law will change to stop these agencies and companies from exploiting us . a word of warning ( DO NOT APPLY TO WORK FOR” GAP AGENCY” OR ALLIED BAKERIES they are they will use you and abuse your rights.

Leave a Reply

Your email address will not be published. Required fields are marked *


* (type the four character code above into this box)

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>