By Russell Holland

Russell Holland looks at the recent concerns raised by the TUC in relation to the Agency Worker Regulations

On 1st October 2013 the Agency Worker Regulations 2010 will be celebrating their second birthday.  In terms of case law the Regulations have not, as yet, featured significantly in a reported case[1].  However, matters could change with the TUC making a complaint against the Government for failing to properly implement the regulations. The TUC is particularly concerned about the “Swedish Derogation,” complaining that “Swedish derogation contracts are just one more example of a new and growing type of employment that offers no job security, poor career progression and often low pay.”[2] 

The CBI responded to the challenge commenting that “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.” The CBI argues that “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.”[3] The increased media and political attention on this area may lead to more people seeking legal advice, so this article will provide a quick summary of the key points.

When they start an assignment agency workers are entitled to the same treatment in respect of collective facilities (Regulation.12) and access to employment as other workers (Regulation 13).  This includes canteen, child care and transport facilities.

After twelve weeks (see Regulations 7-8 for details on the qualifying period and Regulation 9 for anti-avoidance provisions) agency workers are entitled to equal treatment in respect of certain basic working and employment conditions (see Regulation 5). The basic working conditions consist of pay; duration of working time; night work; rest periods; rest breaks and annual leave (see Regulation 6)

The Swedish Derogation is found in Regulation 10. If a worker has a contract of employment with the agency with specified written conditions (including that they do not have an entitlement to equal pay) and after the end of the first assignment the agency looks for and offers the worker work while paying the minimum amount (for calculation see Regulation 11) then the rights in relation to pay do not apply.  Note the derogation only applies to pay – the other conditions still apply.  There is no case law yet as to what happens if the conditions in Regulation 10 are not met, but the inference is that the worker would be entitled to equal pay if they are not.

Note also that the agency and the hirer can both be liable to the extent that they are responsible for the breach (see Regulation 14). To escape liability agencies would have to show that they took reasonable steps to obtain relevant information, acted reasonably and ensured that the worker was treated in accordance with the rights.

Agency workers have a right not to be dismissed in connection with their rights (see Regulations 17-18) and can request information if they think there is a breach (see Regulation 16).

Agency workers, agencies and hirers should review the Regulations to ensure that they are aware of their implications.  For agencies and hirers, care has to be taken that they are both aware of the basic working conditions and have proper audit procedures in place to ensure that they do not fall foul of the regulations.  Where the Swedish Derogation model is used care must be taken in the drafting of the contract as well as having evidence in respect of efforts made to search for and offer work to ensure full compliance.

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[1] So far they have only achieved a brief mention in a case primarily concerned with the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 Hudson v Department of Work and Pensions [2012] EWCA Civ 1416