The Trades Union Congress (TUC) has lodged a formal complaint with the European Commission (EC) against the UK government, alleging it has failed to implement the Temporary and Agency Workers Directive properly.
Under the UK’s Agency Workers Regulations 2010 (AWR) legislation, agency employees are entitled to the same basic pay as comparable employees after a 12-week qualfying period.
However, the TUC has complained that UKemployers’ implementation of the EU directive has allowed the abuse of Swedish derogation contracts. This type of contract exempts the agency from having to pay a worker the same rate of pay, as long as it directly employs individuals and guarantees to pay them for at least four weeks during periods when they cannot find work.
In Sweden, where the contracts originated, employees still receive equal pay once in a post and 90% of normal pay between assignments.
But in the UK, employees have no equal pay rights and are paid half as much as they received in their last assignment, or minimum wage rates, between assigments.
Such contracts are used regularly in call centres, food production, logistics firms (for example for lorry drivers working out of retail warehouses), and parts of manufacturing, according to the TUC.
The TUC’s complaint is based on three grounds:
- The Swedish derogation provision does not comply with the directive and allows agencies to avoid equal treatment rights.
- The definition of pay used by the AWR is too narrow, excluding bonus payments, share options and contractual maternity or paternity pay.
- The AWR’s condition for equal treatment of staff uses an actual comparable employee which an employer can cite, rather than a hypothetical comparator.
Frances O’Grady (pictured), TUC general secretary, said: ““The agency worker regulations have improved working conditions for many agency workers without causing job losses.
“However, the regulations are being undermined by a growing number of employers which are putting staff on contracts that deny them equal pay. Most people would be appalled if the person working next to them was paid more for doing the same job, and yet agency workers on these contracts can still be treated unfairly.
“When even Conservative MPs complain about the Swedish derogation you know it is time for the government to toughen the law.
“That’s why we are calling on the EC to investigate the problem and take steps to prevent the abuse of agency workers in the UK.”
A spokesperson for the Department for Business, Innovation and Skills, said: “We worked closely with both employers and employee organisations to successfully implement the Agency Workers Regulations.
“We will, of course, consider carefully any information the TUC presents to the European Commission.”