Is Swedish Derogation a ticking time bomb?

For months now companies and agencies have been working to comply with the new AWR (Agency Worker Regulations), for some the answer has been to introduce Swedish Derogation contracts for staff, which basically means that the temp is an employee of the agency, subcontracted to the employer on a minimum hours contract (mostly ranging from 0 to 4 hours).

The danger for companies and temporary staff is that this Swedish Derogation does not allow for pay parity or equal rights under the AWR and temporary staff can be “paid off” with 4 weeks pay.    The minimum hours contracts remain untested and agencies may find a host of employment tribunal cases hitting their desks shortly after the 26th of December.

Employment tribunals will have to look at whether these “minimum hours” are justified or whether the 4 weeks “notice period” should be paid on an average hours over the previous 12 weeks.

My personal view is that many agencies may find the Swedish Derogation rules will come back to haunt them in the not so distant future and they will have to bear the brunt of additional costs themselves.

The rumour is that trade unions and legal experts are already looking into this – it could be the case that employers who knowingly accept Swedish Derogation temporary staff from agencies may have to contribute too … it is a very grey area.

Sadly some of the largest employers are knowingly accepting temporary staff under the Swedish Derogation rules, it seems the AWR may be seen as toothless monster at the moment, until of course the first tribunals take place.

Further information that is well worth a read can be found in the HR Magazine.

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