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The Agency Worker Regulations 2010 and the Swedish derogation

28th February, 2013

In one of the first judgements in this area of employment law, an Employment Tribunal has found in favour of an employer defending a claim in relation to the ‘Swedish derogation’ in the Agency Worker Regulations 2010 (“AWR”). The AWR entitle agency workers to receive the same basic pay and conditions as comparable employees after a 12-week qualifying period.

The Swedish derogation (introduced into the AWR at the request of the Swedish government) provides an exemption from this as far as pay is concerned (it does not affect agency workers’ entitlements to other provisions under the regulations such as annual leave after 12 weeks, ‘day-one’ rights and rest breaks). For the Swedish derogation to be relied on, the temporary work agency must provide the agency worker with a contract entitling them to pay between assignments. It must be clear that they are giving up their entitlement to equal pay and also comply with specific provisions relating to how and for how long the agency must pay them.

In Bray and others v Monarch Personnel Refuelling (UK) Ltd ET/1801581/2012, an Employment Tribunal considered whether new contracts of employment issued to agency workers by a temporary work agency complied with the provisions under Regulation 10(1)(a) of the AWR, even though the agency workers already had a long-standing relationship with the hirer.

The eight claimants were tanker drivers employed by Monarch Personnel Refuelling (UK) Ltd (“Monarch”) on zero hour contracts and assigned to BP to make deliveries to petrol stations. These drivers were generally assigned to BP on a fairly long-term basis and most of the claimants worked continuously for BP on a series of assignments; they had not been assigned to any other hirers during their employment with Monarch.

Monarch typically paid tanker drivers working for BP around £1 an hour more than the market rate for the job. However, drivers employed directly by BP doing the same work were paid £0.70 an hour more than the drivers employed by Monarch. After the AWR came into force on 1 October 2011 BP informed all its employment agencies that current assignments would be concluded on 30 November 2011 and followed by fresh assignments starting on 1 December 2011, for which only drivers working under the Swedish derogation would be accepted.

Monarch informed its drivers of this and in a series of one-to-one meetings, explained that they would be issued with new “Guaranteed Hours Contracts” under which they would give up any right to equal pay with BP’s permanent drivers and become entitled to pay between assignments in accordance with Regulation 10 of the AWR. The new contracts were issued on 15 November 2011.

All the claimants reluctantly signed a statement to say they accepted the offer of the new contracts. All except one returned their signed contract by the end of November and the remaining claimant returned his signed contract on 12 December 2011. The claimants reported for work as usual at BP on 1 December 2011 and were assigned tankers to drive their normal routes and do their usual deliveries.

The claimants brought claims that the new contracts did not comply with Regulation 10(1)(a) of the AWR. The Tribunal found that the new employment contracts were compliant with Regulation 10(1)(a) of the AWR as they had been entered into before the beginning of the first assignment under those contracts. The Tribunal stated the scope of the AWR was clear and refused to make a reference to the European Court of Justice with regards to whether the Temporary Workers Directive was properly implemented (which the AWR is intended to give effect to).

For further advice or information in relation to the AWR and how they may affect your business, please contact Helen Watson on 01244 405565 or send an e-mail to [email protected].


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