Can Swedish Derogation contracts be offered by Channel Island recruiters?

Questions were asked in the House of Lords recently in order to clarify whether the Swedish derogation model can be operated by recruitment businesses based in the Channel Islands. Lord Laird raised the matter, making particular reference to companies based offshore who employ teachers working in the United Kingdom on Swedish Derogation contracts.*

However before getting ahead of ourselves, it is worth checking whether the Agency Workers Regulations (AWR) apply to the Channel Islands at all and therefore if there is any need to exclude parity of pay rights by using such a model.

A written reply by Baroness Garden of Frognal stated: “The Agency Workers Regulations extend to Great Britain and do not include the Channel Islands.” But that is not the end of the story…


Her response continued: “The fact that a temporary employment agency is not based in Great Britain does not prevent the Agency Workers Regulations applying to agency workers who are supplied to work for a hirer in Great Britain.”

Lord Laird then asked whether the Government was satisfied that such workers are being offered contracts which exempt them from the right to equal pay – a Swedish Derogation contract.

The Baroness concluded her answer by saying that the AWR and guidance were designed to provide businesses and individuals with the flexibility to choose the type of contract to suit them.


Adrian Marlowe at Lawspeed summed up the outcome by saying:

“Any agency worker whose place of work is within Great Britain has rights under the Agency Worker Regulations. It follows that an agency based anywhere in the world which supplies workers to the UK can offer Swedish Derogation contracts.

“It is worth remembering that such contracts only avoid equal pay rights, not any other rights under the AWR.”

The question from Lord Laird underlines the confusion which still surrounds the Agency Worker Regulations and focusses the spotlight on the Swedish Derogation, which some see as a scheme to avoid worker rights.


Meet the Experts

For advice and support on all AWR matters contact the experts at Lawspeed. The recruitment and employment law specialists will be offering free one-to-one legal clinics to visitors at the Recruitment Agency Expo 2013.

Bring your questions and queries along to the Lawspeed stand – number 108.

The Recruitment Agency Expo takes place at Olympia on Tuesday 26 and Wednesday 27 February 2013, visit Recruitment Agency Expo for more information.

Alternatively contact Lawspeed on [email protected] or call our team of experts on 01273 236 236.

*Source: Lords Hansard Report, 14 January 2013.


Fact file: What is the ‘Swedish Derogation’?

The Swedish Derogation is so named because of the Swedish Government’s insistence on its inclusion in the EU Temporary Agency Workers Directive.

In response to the EU Directive, the Agency Worker Regulations (AWR) became law in the UK in October 2011 and gave agency workers the right to pay and benefits equal to those received by permanent staff employed by the hirer.

However, under the so called ‘Swedish Derogation’, agency workers do not have to be paid the same as comparable employees if they are employed directly by the agency on contracts that comply with the requirements of Regulation 10 of the AWR.


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