Agency triumph for CWU as ‘Swedish Derogation’ loophole is finally closed

BT April 6 2020

Almost  a decade of CWU campaigning against exploitative ‘Pay Between Assignment’ contracts has today (Monday) secured the belated abolition of the notorious legal loophole that allowed employers to avoid paying agency workers the going rate for the job.

Nearly two years after the union finally persuaded BT to phase out PBA contracts – following seven years of campaigning under the ’Closing the Loopholes’ and ‘Close the Gap!’ banners – legislation tabled  under Theresa May’s premiership to outlaw these  contracts once and for all has finally come into force – securing justice at last for tens and possibly hundreds of thousands of agency workers across the UK.

The travesty of unequal pay for identical work by colleagues working side-by-side has been tirelessly highlighted by the CWU since 2011 when PBA contracts were first introduced by a recruitment industry that was quick to cotton on to the so called ‘Swedish Derogation’s’ potential to side-step the equal treatment aims of the EU’s Temporary Agency Workers Directive on account of the way the exemption had been introduced in UK law by the then Coalition Government.

Previously unheard of in the UK, the contracts that began to be issued by even reputable players in Britain’s recruitment industry cynically turned the  exemption, that had ironically been secured by various  Scandinavian countries to protect the exceptionally good  terms traditionally enjoyed by high-end contract workers, on its head.

Just as the CWU had warned would happen from the outset, the UK’s interpretation of the Directive allowed employment agencies (and by definition their client companies) to circumvent the duty of equal treatment on pay simply by offering minimal and time limited ‘in-between assignment’ wage guarantees to workers who were, in reality, employed indefinitely.

At a stroke, the introduction of what quickly became the ‘default’ agency contract issued by Manpower when employing staff to work in BT call centres placed a ticking time bomb under the huge victory that had only just been won for an earlier generation of the CWU’s agency members – thousands of whom went on to equal pay when the Agency Worker Regulations first came into force.

Commenting on today’s momentous change in UK employment law, CWU assistant secretary Sally Bridge – who has spearheaded the union’s agency campaigning  for more than 15 years – said: “The fact that PBA contracts have, at last, been consigned to history represents complete vindication of years of hard work by the CWU on an issue on which we’ve led the trade union movement from the outset.

“There’s a certain irony in the fact that BT’s decision to do the right thing and phase out PBA contracts well in advance of the change in the law means that the membership group for whom we initiated the fight to close this loophole no longer exists.

“That, however, takes nothing away from the fact that today many thousands of agency workers across the UK are finally achieving equal treatment on pay in very large part because of the pressure exercised by the CWU which culminated in their exploitation being highlighted in the Taylor Review of Modern Employment Practices.

“I think that is an achievement of which everyone who participated in the union’s campaigning on this issue over the years can be very proud indeed.”