What’s the ‘Swedish Derogation’ – is it a way round the Agency Worker Regulations 2010?

Under the Agency Workers Regulations 2010 an agency worker is entitled, after 12 weeks’ service on an assignment, to the same basic pay and conditions as the equivalent end-users’ employees.

However, there is a derogation under Regulation 10 (referred to as ‘the Swedish Derogation’) that allows an agency to opt-out of ‘the same basic pay’ rule (they still have to give the same basic conditions), but there’s a catch!

Briefly, the Regulation 10 requirements are that the agency worker must be employed by the agency under a permanent contract of employment (instead of an ‘as-and-when’ contract); the agency worker must be paid half-pay and at least the National Minimum Wage when there is no suitable work; and the agency must give at least four weeks’ notice to terminate the employment contract. Finally, it’s the agency worker’s choice as to whether or not they accept a ‘Regulation 10 contract’.

According to Employment Law specialists Citation if an agency worker has the opportunity to take a long-term position with an end-user, they might be prepared to accept a Regulation 10 contract (with lower earnings than they might otherwise have had) in exchange for longer-term security.