The Agency Workers Regulations entitle agency workers to get the same basic pay and conditions as comparable employees after a 12 week qualifying period.

The Swedish derogation provides an exemption from this as far as pay is concerned. The TUC have today complained to the European Commission saying agency workers are still to be paid less as a result. For the Swedish derogation to come into play, the temporary work agency (TWA) offers an agency worker a permanent contract of employment and pays the worker between assignments. A 'zero hours' contract does not count as a derogation contract.

Crowley Woodford, an Employment Partner at Ashurst LLP, said: “The point of the AWR is to improve pay and conditions of agency workers. The Swedish derogation is only allowed because of the pay that is received by a worker between assignments. The Government guidance does already provide that employers should explain to the worker that entering into a Swedish derogation contract means giving up the entitlement to equal pay. Further there must be a statement in the employment contract itself that makes this clear.”