The end of Swedish derogation contracts?

• The Resolution Foundation has published a report suggesting that Swedish Derogation contracts AKA Pay Between Assignments (‘PBA’) should be abolished.
• The report states companies are using PBA to get around equal pay obligations.
• The Resolution Foundation considers that workers who agree to PBA contracts are underpaid 16p per hour where they have worked 3 or more months, totalling £275 a year.

Aspire Comment

Swedish Derogation is where an agency worker sacrifices their right to equal pay for pay between assignments. When a worker is paid between assignments, they must be paid at least half of their highest rate received on the last assignment.

It has been suggested previously, via the Taylor Review, that PBA contracts should be abolished or properly enforced as some agencies are using it to avoid equal pay obligations. In some cases, the workers are unaware of what they are signing up for. Although many have called for PBA contracts to be abolished, the Government indicated in its recent agency consultation that if there is sufficient proof that abuse of PBA contracts is widespread it would be mindful to ban them altogether, but if the evidence points to more limited use it would rather seek to improve compliance.

To view the Resolution Foundation report click here. To view our previous article on the Taylor Review click here.