What Was the Swedish Derogation?
The Swedish derogation let agencies disapply AWR equal pay for temps on permanent agency contracts. It was abolished on 6 April 2020.
The Swedish derogation was an exception in the original Agency Workers Regulations 2010 (AWR). It let a temporary work agency switch off the AWR equal-pay right for an agency worker it employed on a permanent contract of employment, in return for paying the worker between assignments. The contracts it relied on were known as "pay between assignments" contracts.
The exception was narrow. Under regulation 10 it disapplied the equal-treatment right in regulation 5 only so far as it related to pay; other equal conditions, such as working time and holidays, still applied after the 12-week qualifying period. The contract had to be signed before the first assignment, set out in writing terms such as the minimum rate of pay, locations, expected and minimum hours and the type of work, and state that the worker gave up the regulation 5 pay rights. Between assignments the agency had to look for suitable work, offer it, and pay a minimum amount set by regulation 11: at least 50% of the worker's basic pay in their highest-paid pay reference period in the last 12 weeks of the assignment, or across the whole assignment if it lasted 12 weeks or less, and never less than the national minimum wage for the hours worked in that period. It could not end the contract until it had done this for at least four weeks in total.
The derogation ended on 6 April 2020. The Agency Workers (Amendment) Regulations 2019 omitted regulations 10 and 11 altogether, for existing contracts as well as new ones. The contracts themselves carried on as employment contracts; what fell away was the pay exemption. Agencies had to give each worker on such a contract a written statement, by 30 April 2020, that the original statement no longer had effect and that the worker was entitled to equal pay once they completed the qualifying period.
Today every agency worker in England, Wales and Scotland who completes the qualifying period is entitled to equal pay, whatever their contract with the agency. The AWR 12-week rule guide explains how that period is counted.