Swedish Derogation and Agency Workers Regulations 2010

Swedish Derogation and Agency Workers Regulations 2010

With the amendment of the Agency Workers Regulations (AWR) 2010 and the governments Good Work Plan 2020, the end of 2019 saw the beginnings of some landmark employment law changes, including the end of the Swedish Derogation. 

Initially, the Agency Workers Regulations 2010 (AWR) were amended to revoke regulations 10 (Permanent contracts providing for pay between assignments) and 11 (Calculating the minimum amount of pay), resulting in the Agency Workers (Amendment) Regulations 2019.

Then, following a review conducted by the Taylor Review of Modern Working Practices in July 2017 and it’s subsequent report, the Government’s Good Work Plan 2020 was published at the end of December 2019 detailing plans to abolish the Swedish Derogation on 6th April 2020. 

What was the Swedish Derogation?

The Swedish Derogation was the name for a type of employment contract, the official name is a “pay between assignments” contract. In basic terms this means that a temporary worker agency (TWA) would employ temporary staff directly and would continue to pay those staff even when they are not on a work assignment for an end client. 

Why was the Swedish Derogation abolished?

The Taylor Review recommended that the Swedish Derogation be repealed to encourage more employers to take on permanent employees, with the goal of providing a greater level of certainty and security to workers. 

What did the removal of the Swedish Derogation mean for temporary workers?

The Good Work Plan and the abolition of the Swedish Derogation meant that all agency workers are now entitled to the same basic working and employment conditions as direct recruits of the same business (including pay) once they have worked in the same role with the same hirer for 12 continuous calendar weeks regardless of the type of contract they hold.

Pay parity excludes company sick pay, maternity/paternity pay, adoption pay, pension contributions and redundancy pay and it does not include bonuses that are not directly attributable to the work carried out by a worker or their own long-term service.

Temporary worker agencies were also required to provide workers whose existing contracts contain a Swedish Derogation provision with a written statement telling them that those provisions no longer apply, by no later than 30 April 2020.  

What else changed? 

Holiday pay reference period

Under the new legislation there was an increase to the period over which holiday pay is calculated. 

Previously, holiday pay for a worker who worked irregular hours, was calculated based on the salary earned over the previous 12 weeks (pay reference period). As of 6th April 2020, the pay reference period was extended to the whole previous 52 weeks or over the total number of weeks worked if less than 52. 

Agency workers right to a statement of terms (particulars of employment)

Following the employment law change on 6th April 2020, all workers should receive a written document setting out their basic contractual terms within one day of their employment commencing. 

How have the changes in employment law changed things for workers so far? 

Since the employment law changes came into effect in the middle of the COVID-19 (Coronavirus) pandemic, it is difficult to tell how the changes have directly affected workers. The employment market has fluctuated dramatically throughout the pandemic and is likely to continue to do so for some time. With all of this uncertainty and change, it is difficult to attribute any long-term effects to one reason or another. It will take some time for a data set that can be analysed with any certainty to be available. 

Do workers understand the employment law changes? 

Despite employment law news being well documented across the media, the distinctions between legislations can be difficult to understand. Discussions across worker forums seem to show a varied understanding of the provisions.1

How about you, have you felt the benefit of any of these changes? Do you understand the changes and how they affect you?


1 The UK Professional Drivers Forum, Trucknet UK [Internet] June 2019 | Accessed October 2020 https://www.trucknetuk.com/phpBB/viewtopic.php?f=2&t=161072