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Law firm successfully defends AWR claims challenging the Swedish derogation

Law firm successfully defends AWR claims challenging the & lsquo;Swedish derogation’ 

North West law firm Brabners Chaffe Street has successfully defended a multiple claimant claim brought under the Agency Workers Regulations (AWR). The case is understood to be one of the first decisions on this point since the legislation was introduced in October 2011. The decision will have implications for recruitment businesses across the UK who want to rely on the exemption in the AWR and avoid providing temporary workers with equal pay after the qualifying period. The exemption itself is contained within Regulation 10 of the AWR and has become commonly referred to in the industry as the & lsquo;Swedish derogation’.

Brabners Chaffe Street was instructed by Wigan-based recruitment company Monarch Personnel Refueling (UK) Limited to defend a claim brought by a number of its temporary workers who challenged whether Monarch had complied with all the requirements of the & lsquo;Swedish derogation’. The temporary workers were supplied by Monarch to its client as drivers who complained that Monarch had failed to comply with the requirements of Regulation 10.

The basis of the & lsquo;Swedish derogation’ is that it allows recruitment businesses to derogate from the requirement to pay temporary workers the same & lsquo;pay’ as a comparable employee/worker of the end user client. The proviso to this is that temporary workers must be employed by the recruitment business 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.

The legal team at Brabners Chaffe Street was led by Employment Partner, Paul Chamberlain, a nationally-recognised expert in the law relating to recruitment agencies who also played an active role in the response to the consultation on the AWR and was part of the Recruitment and Employment Confederation's (REC) Agency Work Commission in 2008.

He says: “This case is one of the first which addresses the effectiveness of the & lsquo;Swedish derogation’ and is particularly important for businesses operating in the recruitment sector who wish to rely on it.  It highlights the need for recruitment businesses to ensure that the contracts of employment comply with the requirements of Regulation 10 of the Agency Workers Regulations and that such contracts are implemented in line with statutory requirements.  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.”


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