Recruitment bodies hit back at Miliband’s comments on the Swedish Derogation
6 January 2014
Bodies representing the recruitment industry have defended the use of the Swedish Derogation model after Labour leader Ed Miliband said he would abolish the ‘loophole’ should Labour be elected at the 2015 General Election.
Mon, 6 Jan 2014Bodies representing the recruitment industry have defended the use of the Swedish Derogation model after Labour leader Ed Miliband said he would abolish the ‘loophole’ should Labour be elected at the 2015 General Election.
In the Independent On Sunday, Miliband writes: “There is a loophole in the laws around agency work, which allows firms to avoid paying agency workers at the same rates as directly employed staff… The next Labour government will work with British business to close this loophole and ensure that agency workers cannot be used to undercut non-agency staff.”
Under the Swedish Derogation, part of the Agency Workers Regulations (AWR) that came into effect in October 2011, employers can avoid paying agency staff the same as their permanent staff by putting the agency staff on a permanent contract of employment, which guarantees them pay between agency assignments (PBA).
In January 2013, recruiter.co.uk reported claims by communications union CWU that more than 1,000 temporary agency workers working for Manpower at BT call centres were up to £584 a month worse off than other Manpower agency workers working in the same BT call centres, who qualify for equal pay under AWR. Among the companies known to have used the model are BT and Morrisons. However, neither BT nor Morrisons had commented as recruiter.co.uk went to press.
In response to Miliband’s comments, Kevin Green, chief executive officer at the Recruitment & Employment Confederation (REC), says it is “wholly misleading” for the Labour leader to describe pay between assignment contacts, also known as the Swedish Derogation, as a loophole.
“Workers on PBA contracts are employed by their agency on a permanent basis, giving them greater security and all the benefits that come with permanent work such as protection from unfair dismissal, maternity leave and statutory redundancy pay. Is the Labour party really saying they want to deny British temps the option of permanent employment?”
And Adrian Marlowe, chairman of the Association of Recruitment Consultancies, tells recruiter.co.uk: “The regulations were carefully formulated after much discussion between the unions and the CBI representing both sides of industry to try and achieve a balance in line with the EU Agency Workers Directive… It was clearly the intention of the European Parliament that this derogation would be used.”
Marlowe says it would be inappropriate for any political party to renegotiate the regulations on a single point without reviewing the effects of the AWR as a whole.
Katja Hall, chief policy director at the CBI, who were involved in negotiations with the TUC on the Agency Workers Directive before AWR coming into force, says: “The flexible labour market in this country has saved jobs and kept our economy going during tough times.
“Undermining this flexibility would put the very system which has kept unemployment down at risk. The agency directive was not welcomed by business, and further gold plating of EU rules can only cost jobs.”
In 2012, a survey by law firm Eversheds found that 17% of employers had opted for the Swedish Derogation.
In the Independent On Sunday, Miliband writes: “There is a loophole in the laws around agency work, which allows firms to avoid paying agency workers at the same rates as directly employed staff… The next Labour government will work with British business to close this loophole and ensure that agency workers cannot be used to undercut non-agency staff.”
Under the Swedish Derogation, part of the Agency Workers Regulations (AWR) that came into effect in October 2011, employers can avoid paying agency staff the same as their permanent staff by putting the agency staff on a permanent contract of employment, which guarantees them pay between agency assignments (PBA).
In January 2013, recruiter.co.uk reported claims by communications union CWU that more than 1,000 temporary agency workers working for Manpower at BT call centres were up to £584 a month worse off than other Manpower agency workers working in the same BT call centres, who qualify for equal pay under AWR. Among the companies known to have used the model are BT and Morrisons. However, neither BT nor Morrisons had commented as recruiter.co.uk went to press.
In response to Miliband’s comments, Kevin Green, chief executive officer at the Recruitment & Employment Confederation (REC), says it is “wholly misleading” for the Labour leader to describe pay between assignment contacts, also known as the Swedish Derogation, as a loophole.
“Workers on PBA contracts are employed by their agency on a permanent basis, giving them greater security and all the benefits that come with permanent work such as protection from unfair dismissal, maternity leave and statutory redundancy pay. Is the Labour party really saying they want to deny British temps the option of permanent employment?”
And Adrian Marlowe, chairman of the Association of Recruitment Consultancies, tells recruiter.co.uk: “The regulations were carefully formulated after much discussion between the unions and the CBI representing both sides of industry to try and achieve a balance in line with the EU Agency Workers Directive… It was clearly the intention of the European Parliament that this derogation would be used.”
Marlowe says it would be inappropriate for any political party to renegotiate the regulations on a single point without reviewing the effects of the AWR as a whole.
Katja Hall, chief policy director at the CBI, who were involved in negotiations with the TUC on the Agency Workers Directive before AWR coming into force, says: “The flexible labour market in this country has saved jobs and kept our economy going during tough times.
“Undermining this flexibility would put the very system which has kept unemployment down at risk. The agency directive was not welcomed by business, and further gold plating of EU rules can only cost jobs.”
In 2012, a survey by law firm Eversheds found that 17% of employers had opted for the Swedish Derogation.
