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UK – Recruiter wins ‘Swedish derogation’ case

10 January 2013

Recruitment firm Monarch Personnel Refueling has won a multiple claimant claim brought under the Agency Workers Regulations (AWR) which was introduced at the end of 2011 to improve pay and working conditions for temporary workers.

Monarch Personnel Refueling is a specialist staffing firm providing workers to the petroleum industry and is part of Monarch Personnel Services, based in Wigan.

This is one of the first cases brought forward since the legislation was enforced in October 2011 and will affect staffing firms in the UK which want to rely on a derogation within the AWR which allows them to avoid paying temporary workers equal pay after the 12-week qualifying period. This exemption, contained within Regulation 10 of the AWR, is familiarly known as ‘Swedish derogation’.

The Swedish derogation allows staffing firms to derogate from the requirement to pay temporary workers the same pay as a comparable worker of the end user client, or staffing buyer, under certain conditions. These include the following: temporary workers must be employed by the staffing firm on a permanent contract of employment; the contract must contain a minimum amount of information as set out by the AWR and also comply with the statutory requirements of how the contract of employment is brought into effect.

Monarch Personnel Refueling (UK) Limited was challenged by a number of its temporary agency workers on whether the firm had complied with all the requirements of the Swedish derogation. The workers claimed that Monarch had failed to comply with the requirements of Regulation 10.

Paul Chamberlain, head of Employment Law for Brabners Chaffe Street, who was involved in the case, said that recruiters must ensure compliance with the requirements of Regulation 10 of the AWR.

“This case shows that Monarch successfully implemented new contracts incorporating the requirements of Regulation 10. Although this case involved only a small number of temporary workers, there are many recruitment businesses out there that will use hundreds of workers on such contracts, therefore the importance of getting the content of the contract and the right approach is crucial. The impact of getting it wrong would be very costly to a recruitment business as all temporary workers affected could try to claim equal pay,” said Mr Chamberlain. 

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