The Swedish derogation is an opt-out clause from the Regulations – it is covered by Regulation 10. It means that AWR rights to equal pay and conditions of an agency worker are negated when they are employed on a permanent basis by a temporary work agency (TWA). They must however be paid when they are in between contract assignments.
To qualify for the Swedish Derogation opt out, the agency worker needs to be genuinely employed by the TWA with a permanent contract of employment in place. This contract must be entered into prior to the start of the worker's first assignment.
As mentioned, the TWA will have to pay agency workers when they are in between assignments and have to ensure that they are offered any available work.
When an agency worker is between assignments, they must be paid at least 50% of their contract rate (the highest rate of pay received in the previous 12 weeks of work and at least at minimum wage) for at least 4 weeks before a contract can be terminated, unless the employee resigns.
In practice, the agency worker will enter into a permanent contract of employment with the TWA. The TWA then becomes responsible for paying the agency workers salary.
Note - this reduces a recruitment agency's AWR responsibilities - there has however to be a close professional relationship between recruitment agencies and TWA’s.
The Contract of Employment must detail the following;
- Client details
- Minimum pay rates and how calculated
- Work location and travel
- Expected hours of work (minimum/maximum)
- The type of the work to be undertaken
The Contract of Employment will also confirm that the agency worker becomes an employee of the TWA and it will detail an exemption from section 5 of the Regulations where they relate to equal treatment provisions on pay.
Equal treatment in respect of duration of statutory maternity pay, paternity pay, sick pay, night work, rest periods, rest breaks & paid annual leave are not affected by Swedish Derogation.