Tuesday, 13 August 2013

The "Swedish Derogation" - The quiet revolution at casual UK Plc


Agency working - there is nothing wrong in principle with the idea of seasonal or temporary work being supplied via an Agency.   In practice, what has happened is that most medium and large employers have systematically abused the principle and have created a permanent two-tier workforce.

Look inside virtually any warehouse, and you will likely find Agency workers who have been there for years. Years.  According to the Agency industry, they are currently placing 1.3 million workers every day in the UK.   In my experience, less than 10% of these placements are genuinely seasonal or temporary.

It has suited employers to have a class system within it's shop-floors.  It keeps workers in fear, and crucially, it keeps costs down.

The game-changer came (or was supposed to....) in 2011, with the EU wide implementation of the Agency Worker Regulations.   This was designed to prevent abuse, and stated that after 12 weeks of a placement, the Agency worker must be paid the same as the "perm" doing the same job. This was how it was supposed to work

The game has indeed changed. But not in the decent way intended.

We now over 1.3 million Agency workers in the UK , and uncounted thousands of them are already on "PBA" contracts (Derogation / Payment between assignment".

So What Is "The Swedish Derogation"?

It is a clever loophole the employers have come with to get around the Agency Worker Regulations.

Also called PBA Contracts (Payment Between Assignments), they are a form of employee contract.  In other words, the "Agency worker" instead becomes an "employee of the Agency", and so becomes exempt from the pay parity (after 12 weeks) aspect of the Agency Worker Regulations.

For example, at the Argos warehouse in Barton (Staffordshire), the "Swedish Derogation" workers are "legally" paid £3 per hour less than the "perms" for doing the same job.  This was precisely the sort of pay abuse the Agency Worker Regulations were designed to stop, but in the UK the spirit of the law has been totally flouted.   The workers have been hammered by very clever employers and solicitors.

I said "legally".  It is clear to me that the UK has allowed such loose interpretation of the EU directive as to make it virtually useless. So while these contracts are "legal" under UK law, they are open to European legal challenge. I am pleased to be able to confirm that the TUC are putting a challenge together as I write...

What about the rest of the Agency workers?

There are still a smaller number of workers still on the older Agency contracts that have been used in recent decades.  So are they winning?  Not in my experience.  Take the Waterstones Warehouse in Burton on Trent.  What they've done is expand the two-class system into a three-class system.  They have introduced a new "minimum wage" permanent contract for a small number of workers.  The Agency workers are then paid at the minimum wage - we cannot argue the comparison should be with the higher paid "perms", because the employer is relying upon the new low-rate "perms" as evidence of treating the Agency the same!

In other words, class 1 is the permanent workers.  They are being replaced by class 2 permanent workers on minimum wage rates.  They in turn are being replaced by the lowest class of worker on the shop floor, the third class worker, the Agency worker.

Boots and Amazon also operate similar workarounds to the law to ensure it's warehouse workers are frightened and nailed down to the floor.  At the Amazon warehouse in Rugely,  there are only 50 "perms", compared to many, many hundreds of Agency.  Sometimes as many as 1000.

Are there any advantages to Swedish Derogation Contracts?

From the workers perspective, yes, they are better contracts than the traditional Agency contract.  Because it makes you an "employee"rather than an "Agency worker", you get the same basic employment rights as "perms".   Importantly, this also means groups of Swedish Derogation workers are now able to organise and gain union recognition via the statutory recognition route.    Unlike miserable zero-hour contracts, most of these contracts do at least guarantee a minimum amount of paid hours per week for it's full time workers. Typically, the contracts I have seen range from 7 hours to 15 pw guaranteed.  Not much use when you are working over 40 hrs pw, but better than the zero-hours contracts!

How are these wide-ranging developments impacting upon society?

A big question - and virtually nobody is attempting to answer it as far as I can see.   Clearly there is a quiet revolution taking place to make employment casual in the UK.   So not only do we have 1.3 million people on some form of dodgy Agency contract, we also have around one million zero-hour contract workers.  The emergence of 1 million zero-hour workers has been extremely rapid and without precedent.

Roughly 50% of all new jobs are in one or two of these miserable contracts

So what about "the lucky 50%" who find a "proper job" that actually has a standard employment contract? Well, they now have to wait for two years for employment rights!!!  This means that most workers can be unfairly bullied, abused or sacked for two years before the worker can (legally) do anything about it.

But that's OK isn't it?  Get through the first two years and you will be OK?   Hopefully. But if the worst happens, the government has ensured you will have to pay hefty upfront fees which you may never get back. Workers can also now be charged costs if they lose the case, of upto £20,000.   The maximum compensation you can win has been slashed.

It won't stop there.  Big business will always want more. The people that represent them already claim that it is too hard to sack people

Agency, Zero-hour, Tribunal policy, consultation rights and other changes at work are all very much a part of a joined up and deliberate policy.  Tories and big business know exactly what they are doing.  It may be a quiet revolution, but revolution it is.

So what is to be done?

Firstly, we need to tell people.   Other than the very welcome media focus upon zero-hour contracts this last week or so, there is hardly any public awareness at all about this miserable race to the bottom.

But all this stuff is massively, massively important.  If enough people want it to, then social media can set the agenda.

It's not rocket science, but yes, we do need to tell people.  And fast.

And while Unions don't have the resources to get around all of non-union or casual UK plc....we can and do make a huge difference in targeted campaigns.  So if you know somebody that wants to organise his or her workplace and not put up with this **** anymore, get them to ring a TUC affiliated Union such as Unite and speak to an Officer.

So yes we can fightback, and yes we can start to win.  But telling people what's going on would be a good place to start.....

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