In his report ‘Good work: the Taylor review of modern working practices’ Matthew Taylor recommends that the government should repeal the legislation that allows agency workers to opt out of equal pay entitlements.
The Agency Workers Regulations (AWR) were introduced in October 2011. Stemming from European legislation, they aim to prevent agency workers being used as cheap labour and include a right to equal pay after 12 weeks. However, regulations 10 and 11 of the Agency Workers Regulations allowed agency workers to waive their right to equal pay in exchange for guaranteed payment between assignments (up to four weeks).
The government confirmed that they accepted this recommendation with the publication of The Good Work Plan in December 2018 and introduced The Agency Workers (Amendment) Regulations 2019, to repeal regulations 10 & 11 from April 2020. The governments’ move to abolish it was outlined in The Good Work Plan and will mean that all agency workers regardless of the type of contract they hold will be entitled to pay party after 12 weeks.
Who is affected by the abolition of Swedish derogation?
The repeal of regulation 10 and 11 impacts workers who hold permanent contracts of employment and receive pay between assignments. It will mean that these workers will now be entitled to pay parity at 12 weeks.
This will mean that recruitment agencies will need to work with their end hirer to collect comparator data and ensure that the worker is paid at least the same as direct employees completing the same work at the end hirer.
Changes for agencies after the Swedish derogation repeal
Agencies will need to continue to supply workers with day-one rights, such as access to facilities ordinarily open to employees, as well as equal pay and benefits after the 12-week qualifying period.
Under the amendment, the worker will need to be provided with a written statement informing them of their new entitlement to equal pay before 30th April 2020.
Furthermore, agency workers may be entitled to continued pay between assignments if this is stated explicitly within their contract and not amended or removed.
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