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Victory for union campaigning as agency workers get stronger rights

Published date
Today sees the abolition of the notorious legal loophole that allowed employers to avoid paying agency workers the going rate for the job.

From today exploitative bosses will no longer be able to pay long-term agency workers less than their colleagues.

Following a long trade union campaign, legislation comes into force today will ban this exploitative type of contract once and for all.

Ten years ago, legislation was introduced to ensure that agency workers received the same pay as those they worked alongside.

But a loophole in that law known as the ‘Swedish Derogation’ meant that a significant number of agency workers were paid much less than directly employed staff for doing the exact same work.

Unions campaigned to abolish this loophole ever since it became clear.

Their dogged opposition to ‘Swedish Derogation’ contracts means that many agency workers will now get paid the going rate for the job.

Why is this important?

Previous TUC research has shown that there are many agency workers trapped in long term agency assignments, many of them working under Swedish Derogation contracts.

More than 420,000 agency workers have been in their jobs for more than a year, and shockingly, over 120,000 have worked for an agency for over five years.

Agency workers employed under the Swedish Derogation suffer a significant pay penalty. The TUC has evidence of workers earning up to £4 less per hour than directly employed staff even though they do the same work.

But now thanks to union campaigning, many agency workers should receive a pay rise.

Quickfire questions

What is a PBA/Swedish Derogation contract?

PBA or ‘Swedish Derogation’ contracts are contracts of employment. Provisions previously meant that you could be paid between assignments, instead of receiving equal pay after 12 weeks of working for the same client in the same role.

Why is the new legislation good for agency workers?

The new legislation will abolish the Swedish Derogation, which gave employers the ability to pay agency workers less than their own workers in certain circumstances. It will be unlawful if you don’t receive equal pay after the 12 weeks qualifying period if you are on a PBA contract.

What happens for agency workers already on PBA/Swedish Derogation contracts?

If you are on a PBA contract, you must receive written confirmation from your recruitment agency confirming your right to equal pay by 30 April 2020.

What is the effect on an agency worker’s pay?

If you don’t receive equal pay after a 12-week qualifying period you may be able to bring a claim to an employment tribunal and claim compensation. In addition, you should not be unfairly dismissed or subject to a detriment when you exercise your right to receive equal pay.

Where can I go for further information?

If you’re in a union please speak to your union rep. The TUC has published this fact sheet to give you an overview of your new and existing rights as an agency worker.

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