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Swedish derogation applies to existing relationships with hirers

25 January 2013 #Employment


Under the Agency Workers Regulations 2010 (in force from 1st October 2011) agency workers who work in the same role for the same hirer for a period of 12 continuous weeks are entitled to the same "basic working and employment conditions” as they would have received if they’d been hired directly by the hirer.

However, the Regulations contain an exception to this in relation to pay (known as the ‘Swedish derogation’) provided that the agency worker has a permanent contract of employment with the agency which meets certain requirements set out in the Regulations.   One requirement is that “the contract of employment was entered into before the beginning of the first assignment under that contract”.

Since it was introduced, there has been uncertainty on how the wording of this requirement affects agency workers who have already commenced an assignment with a hirer.  BIS produced guidance to the Regulations which seemed to suggest that the contract had to be entered into before any assignments with that hirer began, however in the recent case of Bray and others v Monarch Personnel Refuelling (UK) Ltd the Employment Tribunal has held that the Swedish derogation could apply where an existing relationship with the hirer already exists and warned against placing too much emphasis on the guidance which does not have statutory backing.

The claimants in this case were agency workers supplied to BP as tanker drivers, most of whom worked on a fairly long term basis without any gap between assignments.  They were told that their current assignments would end on 30th November 2011 and that if they wished to continue working they would need to sign new contracts containing the Swedish derogation.  All except one of the claimants signed the contracts prior to 1st December 2011 although all continued working past this date.  They then bought claims that the Swedish derogation could not be relied on.  Employment Judge Forrest dismissed their claims. 

In reaching this decision, Judge Forrest said that  entering the contract of employment ‘before the beginning of the first assignment under that contract’ simply meant that before commencing work as an agency worker under the Swedish derogation model the worker should have agreed to a contract which met the requirements laid down in the Regulations.  He also said that the definition of ‘Assignment’ in the Regulations refers to a specific period of time and not the entire continuous period during which agency workers had been hired out.  Therefore in this case, one assignment ended on 30th November 2011 and another began on 1st December 2011.

The seven workers who had signed their contracts in November had entered into the contracts on the date that they signed them which was prior to the first assignment under these contracts commencing on 1st December 2011.    With the regard to the final worker, he had signified his acceptance to the terms by continuing to work past 1st December. 

Whilst this case provides useful guidance, agencies seeking to adopt a similar method should be aware that this is only a first instance decision and may be appealed. 

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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Louise Merrell

Louise Merrell
Associate

E: lmerrell@clarkslegal.com
T: 0118 960 4614
M: 0779 900 7325

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