TUC takes government to Europe over agency workers

Monday 2 September 2013

Flexible workers are being treated unfairly as a result of the government’s poor implementation of agency working regulations, according to TUC.

The statement came as TUC announced that it had lodged an official complaint with the European Commission about the UK government’s handling of the so-called "Swedish derogation" clause, which the trade unions’ association says has allowed temporary workers to be paid less than permanent staff for the same job.

At the moment the Swedish derogation is reportedly used by a number of staffing firms and umbrella companies. British regulation currently ensures that agency workers receive the same pay and conditions as permanent employees performing the same function after 12 weeks. But under this clause, the agency does not have to do this as long as they directly employ workers and guarantee payment for at least four weeks during the periods where the agency cannot give them an assignment.

However, according to the TUC the government’s handling of the regulations has allowed this system to be abused. In Sweden, from where the clause originates, workers do receive equal pay and then receive 90 per cent of their usual pay in between assignments. But the complaint alleges that UK workers have no equal pay rights and can be paid around 50 per cent of their standard rate in between roles. Moreover, because agencies can cut their hours, workers can still find themselves being paid even less.

Indeed, the unions claim to have amassed evidence showing that agency workers can receive as much as £135 per week less than permanent workers.

Businesses and recruiters have already criticised the TUC’s complaint, pointing out that unions agreed to the Swedish derogation as part of the agreement which brought the agency worker rules into force.

Katja Hall, chief policy director at the Confederation of British Industry, said that despite the administrative burden it places on companies, the final Temporary Agency Workers Directive balanced the needs of businesses and staff.

"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," she added.

Head of policy at the Recruitment and Employment Confederation (REC) Kate Shoesmith said that TUC’s description of Swedish derogation contracts as a "loophole" is "wholly misleading", since these contracts are an accepted part of the regulations. She added that most workers are actually in a better position as a result of the rules, which allow individuals to sign up to become employees of the agency to receive statutory benefits such as maternity leave and unfair dismissal.

"The UK economy has made a positive start on the long road to recovery and to disrupt this excellent progress by picking at regulations that the unions played a key role in constructing could put workers' jobs at risk," she explained.

Kevin Green, REC chief executive, told The Huffington Post that many REC members were not happy with elements of the EU directive in the first place. He added that this indicated compromises had already been made.

By Victoria McDonnell

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